Session of 1999
         
HOUSE BILL No. 2308
         
By Representative McCreary
         
(By request)
          
2-8
          
10             AN  ACT relating to property taxation; exempting property of certain do-
11             mestic and fraternal societies, orders or associations; amending K.S.A.
12             79-201 and repealing the existing section.
13      
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. K.S.A. 79-201 is hereby amended to read as follows: 79-
16       201. The following described property, to the extent herein specified,
17       shall be and is hereby exempt from all property or ad valorem taxes levied
18       under the laws of the state of Kansas:
19             First. All buildings used exclusively as places of public worship and all
20       buildings used exclusively by school districts and school district interlocal
21       cooperatives organized under the laws of this state, with the furniture and
22       books therein contained and used exclusively for the accommodation of
23       religious meetings or for school district or school district interlocal co-
24       operative purposes, whichever is applicable, together with the grounds
25       owned thereby if not leased or otherwise used for the realization of profit,
26       except that: (a) (1) Any school building, or portion thereof, together with
27       the grounds upon which the building is located, shall be considered to be
28       used exclusively by the school district for the purposes of this section
29       when leased by the school district to any political or taxing subdivision of
30       the state, including a school district interlocal cooperative, or to any as-
31       sociation, organization or nonprofit corporation entitled to tax exemption
32       with respect to such property; and (2) any school building, together with
33       the grounds upon which the building is located, shall be considered to be
34       used exclusively by a school district interlocal cooperative for the purposes
35       of this section when being acquired pursuant to a lease-purchase agree-
36       ment; and (b) any building, or portion thereof, used as a place of worship,
37       together with the grounds upon which the building is located, shall be
38       considered to be used exclusively for the religious purposes of this section
39       when used as a not-for-profit day care center for children which is li-
40       censed pursuant to K.S.A. 65-501 et seq., and amendments thereto, or
41       when used to house an area where the congregation of a church society
42       and others may purchase tracts, books and other items relating to the
43       promulgation of the church society's religious doctrines.

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  1             Second. All real property, and all tangible personal property, actually
  2       and regularly used exclusively for literary, educational, scientific, relig-
  3       ious, benevolent or charitable purposes, including property used exclu-
  4       sively for such purposes by more than one agency or organization for one
  5       or more of such exempt purposes. Except with regard to real property
  6       which is owned by a religious organization, is to be used exclusively for
  7       religious purposes and is not used for a nonexempt purpose prior to its
  8       exclusive use for religious purposes which property shall be deemed to
  9       be actually and regularly used exclusively for religious purposes for the
10       purposes of this paragraph, this exemption shall not apply to such prop-
11       erty, not actually used or occupied for the purposes set forth herein, nor
12       to such property held or used as an investment even though the income
13       or rentals received therefrom is used wholly for such literary, educational,
14       scientific, religious, benevolent or charitable purposes. In the event any
15       such property which has been exempted pursuant to the preceding sen-
16       tence is not used for religious purposes prior to its conveyance which
17       results in its use for nonreligious purposes, there shall be a recoupment
18       of property taxes in an amount equal to the tax which would have been
19       levied upon such property except for such exemption for all taxable years
20       for which such exemption was in effect. Such recoupment tax shall be-
21       come due and payable in such year as provided by K.S.A. 79-2004, and
22       amendments thereto. A lien for such taxes shall attach to the real property
23       subject to the same on November 1 in the year such taxes become due
24       and all such taxes remaining due and unpaid after the date prescribed for
25       the payment thereof shall be collected in the manner provided by law for
26       the collection of delinquent taxes. Moneys collected from the recoupment
27       tax hereunder shall be credited by the county treasurer to the several
28       taxing subdivisions within which such real property is located in the pro-
29       portion that the total tangible property tax levies made in the preceding
30       year for each such taxing subdivision bear to the total of all such levies
31       made in that year by all such taxing subdivisions. Such moneys shall be
32       credited to the general fund of the taxing subdivision or if such taxing
33       subdivision is making no property tax levy for the support of a general
34       fund such moneys may be credited to any other tangible property tax
35       fund of general application of such subdivision. This exemption shall not
36       be deemed inapplicable to property which would otherwise be exempt
37       pursuant to this paragraph because an agency or organization: (a) Is re-
38       imbursed for the provision of services accomplishing the purposes enu-
39       merated in this paragraph based upon the ability to pay by the recipient
40       of such services; or (b) is reimbursed for the actual expense of using such
41       property for purposes enumerated in this paragraph; or (c) uses such
42       property for a nonexempt purpose which is minimal in scope and insub-
43       stantial in nature if such use is incidental to the exempt purposes of this

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  1       paragraph; or (d) charges a reasonable fee for admission to cultural or
  2       educational activities or permits the use of its property for such activities
  3       by a related agency or organization, if any such activity is in furtherance
  4       of the purposes of this paragraph.
  5             Third. All moneys and credits belonging exclusively to universities, col-
  6       leges, academies or other public schools of any kind, or to religious, lit-
  7       erary, scientific or benevolent and charitable institutions or associations,
  8       appropriated solely to sustain such institutions or associations, not ex-
  9       ceeding in amount or in income arising therefrom the limit prescribed
10       by the charter of such institution or association.
11             Fourth. The reserve or emergency funds of fraternal benefit societies
12       authorized to do business under the laws of the state of Kansas.
13             Fifth. All buildings of private nonprofit universities or colleges which
14       are owned and operated by such universities and colleges as student union
15       buildings, presidents' homes and student dormitories.
16             Sixth. All real and tangible personal property actually and regularly
17       used exclusively by the alumni association associated by its articles of
18       incorporation with any public or nonprofit Kansas college or university
19       approved by the Kansas board of regents to confer academic degrees or
20       with any community college approved by its board of trustees to grant
21       certificates of completion of courses or curriculum, to provide accom-
22       modations and services to such college or university or to the alumni, staff
23       or faculty thereof.
24             Seventh. All parsonages owned by a church society and actually and
25       regularly occupied and used predominantly as a residence by a minister
26       or other clergyman of such church society who is actually and regularly
27       engaged in conducting the services and religious ministrations of such
28       society, and the land upon which such parsonage is located to the extent
29       necessary for the accommodation of such parsonage.
30             Eighth. All real property, all buildings located on such property and all
31       personal property contained therein, actually and regularly used exclu-
32       sively by any individually chartered organization of honorably discharged
33       military veterans of the United States armed forces or auxiliary of any
34       such organization, which is exempt from federal income taxation pursuant
35       to section 501(c)(19) of the federal internal revenue code of 1986, for
36       clubhouse, place of meeting or memorial hall purposes, and real property
37       to the extent of not more than two acres, and all buildings located on
38       such property, actually and regularly used exclusively by any such veter-
39       ans' organization or its auxiliary as a memorial park.
40             Ninth. All real property and tangible personal property actually and
41       regularly used by a community service organization for the predominant
42       purpose of providing humanitarian services, which is owned and operated
43       by a corporation organized not for profit under the laws of the state of

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  1       Kansas or by a corporation organized not for profit under the laws of
  2       another state and duly admitted to engage in business in this state as a
  3       foreign not-for-profit corporation if: (a) The directors of such corporation
  4       serve without pay for such services; (b) the corporation is operated in a
  5       manner which does not result in the accrual of distributable profits, re-
  6       alization of private gain resulting from the payment of compensation in
  7       excess of a reasonable allowance for salary or other compensation for
  8       services rendered or the realization of any other form of private gain; (c)
  9       no officer, director or member of such corporation has any pecuniary
10       interest in the property for which exemption is claimed; (d) the corpo-
11       ration is organized for the purpose of providing humanitarian services;
12       (e) the actual use of property for which an exemption is claimed must be
13       substantially and predominantly related to the purpose of providing hu-
14       manitarian services, except that, the use of such property for a nonexempt
15       purpose which is minimal in scope and insubstantial in nature shall not
16       result in the loss of exemption if such use is incidental to the purpose of
17       providing humanitarian services by the corporation; (f) the corporation is
18       exempt from federal income taxation pursuant to section 501(c)(3) of the
19       internal revenue code of 1986 and; (g) contributions to the corporation
20       are deductible under the Kansas income tax act. As used in this clause,
21       "humanitarian services" means the conduct of activities which substan-
22       tially and predominantly meet a demonstrated community need and
23       which improve the physical, mental, social, cultural or spiritual welfare of
24       others or the relief, comfort or assistance of persons in distress or any
25       combination thereof including but not limited to health and recreation
26       services, child care, individual and family counseling, employment and
27       training programs for handicapped persons and meals or feeding pro-
28       grams. Notwithstanding any other provision of this clause, motor vehicles
29       shall not be exempt hereunder unless such vehicles are exclusively used
30       for the purposes described therein.
31             Tenth. For all taxable years commencing after December 31, 1986, any
32       Any building, and the land upon which such building is located to the
33       extent necessary for the accommodation of such building, owned by a
34       church or nonprofit religious society or order which is exempt from fed-
35       eral income taxation pursuant to section 501(c)(3) of the federal internal
36       revenue code of 1986, and actually and regularly occupied and used ex-
37       clusively for residential and religious purposes by a community of persons
38       who are bound by vows to a religious life and who conduct or assist in
39       the conduct of religious services and actually and regularly engage in
40       religious, benevolent, charitable or educational ministrations or the per-
41       formance of health care services.
42             Eleventh. All real property, all buildings located on such property and
43       all personal property contained therein, actually and regularly used ex-

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  1       clusively for its respective purposes by any fraternal beneficiary society,
  2       order or association which is exempt from federal income taxation pur-
  3       suant to section 501(c)(8) of the federal internal revenue code, or by any
  4       domestic fraternal society, order or association which is exempt from fed-
  5       eral income taxation pursuant to section 501(c)(10) of the federal internal
  6       revenue code.
  7             The provisions of this section, except as otherwise more specifically
  8       provided, shall apply to all taxable years commencing after December 31,
  9       1995 1998. 
10       Sec.  2. K.S.A. 79-201 is hereby repealed.
11        Sec.  3. This act shall take effect and be in force from and after its
12       publication in the statute book.