An  Act relating to property taxation; concerning the correction of clerical errors; concern-
      ing the appeals and valuation process; relating to exemptions; amending K.S.A. 79-201c,
      79-1437f, 79-1460, 79-1476, 79-1701, 79-1701a and 79-1702 and K.S.A. 1998 Supp. 79-
      1448 and repealing the existing sections.


     
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 79-201c is hereby amended to read as follows: 79-
201c. The following described property, to the extent herein specified,
shall be and is hereby exempt from all property or ad valorem taxes levied
under the laws of the state of Kansas:

      First. The wearing apparel of every person.

      Second. All household goods and personal effects not used for the pro-
duction of income. The terms household goods and personal effects when
used in this act, except as otherwise specifically provided, shall include
all items of furniture, cooking utensils, refrigerators, deep freezers, wash-
ing and drying machines, dishwashers, stoves, ranges, ironers, vacuum
cleaners, sewing machines, radios, record players, television sets, shop
and hobby equipment used in or about the home, fishing equipment (not
including boats), bicycles, yard and garden equipment, firearms, golf
clubs, photographic equipment, jewelry, luggage, musical instruments,
and air conditioners if not a part of the central heating and air condition-
ing system, sailboards and pick-up truck shells. For the purposes of this
paragraph, household goods and personal effects shall not be deemed to
be used for the production of income when used in the home for day
care home purposes if such home has been registered or licensed pur-
suant to K.S.A. 65-501 et seq., and amendments thereto.

      Third. All lands used exclusively as graveyards.

      The provisions of this section shall apply to all taxable years commenc-
ing after December 31, 1976 1998.

      Sec.  2. K.S.A. 79-1437f is hereby amended to read as follows: 79-
1437f. The Except as otherwise provided by K.S.A. 79-1460, and amend-
ments thereto, contents of the real estate sales validation questionnaire
shall be made available only to the following people for the purposes listed
hereafter:

      (a) County officials for cooperating with and assisting the director of
property valuation in developing the information as provided for in K.S.A.
79-1487, and amendments thereto;

      (b) any property owner, or the owner's representative, for prosecut-
ing an appeal of the valuation of such owner's property or for determining
whether to make such an appeal, but access shall be limited to the con-
tents of those questionnaires concerning the same constitutionally pre-
scribed subclass of property as that of such owner's property;

      (c) the county appraiser and appraisers employed by the county for
the appraisal of property located within the county;

      (d) appraisers licensed or certified pursuant to K.S.A. 58-4101 et seq.,
and amendments thereto, for appraisal of property and preparation of
appraisal reports;

      (e) financial institutions for conducting appraisals as required by fed-
eral and state regulators;

      (f) the county appraiser or the appraiser's designee, hearing officers
or panels appointed pursuant to K.S.A. 79-1602 or 79-1611, and amend-
ments thereto, and the state board of tax appeals for conducting valuation
appeal proceedings;

      (g) the board of county commissioners for conducting any of the
board's statutorily prescribed duties; and

      (h) the director of property valuation for conducting any of the di-
rector's statutorily prescribed duties.

      Sec.  3. K.S.A. 1998 Supp. 79-1448 is hereby amended to read as
follows: 79-1448. Any taxpayer may complain or appeal to the county
appraiser from the classification or appraisal of the taxpayer's property by
giving notice to the county appraiser within 30 days subsequent to the
date of mailing of the valuation notice required by K.S.A. 79-1460, and
amendments thereto, for real property, and on or before May 15 for
personal property. The county appraiser or the appraiser's designee shall
arrange to hold an informal meeting with the aggrieved taxpayer with
reference to the property in question. At such meeting it shall be the duty
of the county appraiser or the county appraiser's designee to initiate pro-
duction of evidence to substantiate the valuation of such property, in-
cluding the affording to the taxpayer of the opportunity to review the data
sheet of comparable sales utilized in the determination of such valuation.
The county appraiser may extend the time in which the taxpayer may
informally appeal from the classification or appraisal of the taxpayer's
property for just and adequate reasons. Except as provided in K.S.A. 79-
1404, and amendments thereto, no informal meeting regarding real prop-
erty shall be scheduled to take place after May 15, nor shall a final de-
termination be given by the appraiser after May 20. Any taxpayer who is
aggrieved by the final determination of the county appraiser may appeal
to the hearing officer or panel appointed pursuant to K.S.A. 79-1611, and
amendments thereto, and such hearing officer, or panel, for just cause
shown and recorded, is authorized to change the classification or valuation
of specific tracts or individual items of real or personal property in the
same manner provided for in K.S.A. 79-1606, and amendments thereto.
In lieu of appealing to a hearing officer or panel appointed pursuant to
K.S.A. 79-1611, and amendments thereto, any taxpayer aggrieved by the
final determination of the county appraiser, except with regard to land
devoted to agricultural use, wherein the value of the property, is less than
$2,000,000, as reflected on the valuation notice, or the property consti-
tutes single family residential property, may appeal to the small claims
division of the state board of tax appeals within the time period prescribed
by K.S.A. 79-1606, and amendments thereto. Any taxpayer who is ag-
grieved by the final determination of a hearing officer or panel may appeal
to the state board of tax appeals as provided in K.S.A. 79-1609, and
amendments thereto. An informal meeting with the county appraiser or
the appraiser's designee shall be a condition precedent to an appeal to
the county or district hearing panel.

      Sec.  4. K.S.A. 79-1460 is hereby amended to read as follows: 79-
1460. (a) The county appraiser shall notify each taxpayer in the county
annually on or before March 1 for real property and May 1 for personal
property, by mail directed to the taxpayer's last known address, of the
classification and appraised valuation of the taxpayer's property, except
that, the valuation for all real property shall not be increased unless: (a)
(1) The record of the latest physical inspection was reviewed by the county
or district appraiser, and documentation exists to support such increase
in valuation in compliance with the directives and specifications of the
director of property valuation, and such record and documentation is
available to the affected taxpayer; and (b) (2) for the taxable year next
following the taxable year that the valuation for real property has been
reduced due to a final determination made pursuant to the valuation
appeals process, documented substantial and compelling reasons exist
therefor and are provided by the county appraiser. For the purposes of
this section and in the case of real property, the term ``taxpayer'' shall be
deemed to be the person in ownership of the property as indicated on
the records of the office of register of deeds or county clerk. Such notice
shall specify separately both the previous and current appraised and as-
sessed values for each property class identified on the parcel. Such notice
shall also contain the uniform parcel identification number prescribed by
the director of property valuation. Such notice shall also contain a state-
ment of the taxpayer's right to appeal and, the procedure to be followed
in making such appeal and the availability without charge of the guide
devised pursuant to subsection (b). Such notice may, and if the board of
county commissioners so require, shall provide the parcel identification
number, address and the sale date and amount of any or all sales utilized
in the determination of appraised value of residential real property. In
any year in which no change in appraised valuation of any real property
from its appraised valuation in the next preceding year is determined, an
alternative form of notification which has been approved by the director
of property valuation may be utilized by a county. Failure to timely mail
or receive such notice shall in no way invalidate the classification or ap-
praised valuation as changed. The secretary of revenue shall adopt rules
and regulations necessary to implement the provisions of this section.

      (b) For all taxable years commencing after December 31, 1999, there
shall be provided to each taxpayer, upon request, a guide to the property
tax appeals process. The director of the division of property valuation
shall devise and publish such guide, and shall provide sufficient copies
thereof to all county appraisers. Such guide shall include but not be lim-
ited to: (1) A restatement of the law which pertains to the process and
practice of property appraisal methodology, including the contents of
K.S.A. 79-503a and 79-1460, and amendments thereto; (2) the procedures
of the appeals process, including the order and burden of proof of each
party and time frames required by law; and (3) such other information
deemed necessary to educate and enable a taxpayer to properly and com-
petently pursue an appraisal appeal.

      Sec.  5. K.S.A. 79-1476 is hereby amended to read as follows: 79-
1476. The director of property valuation is hereby directed and empow-
ered to administer and supervise a statewide program of reappraisal of
all real property located within the state. Except as otherwise authorized
by K.S.A. 19-428, and amendments thereto, each county shall comprise
a separate appraisal district under such program, and the county appraiser
shall have the duty of reappraising all of the real property in the county
pursuant to guidelines and timetables prescribed by the director of prop-
erty valuation and of updating the same on an annual basis. In the case
of multi-county appraisal districts, the district appraiser shall have the
duty of reappraising all of the real property in each of the counties com-
prising the district pursuant to such guidelines and timetables and of
updating the same on an annual basis. Commencing in 1994 2000, every
parcel of real property shall be actually viewed and inspected by the
county or district appraiser once every four six years. Any county or dis-
trict appraiser shall be deemed to be in compliance with the foregoing
requirement in any year if 25% 17% or more of the parcels in such county
or district are actually viewed and inspected.

      Compilation of data for the initial preparation or updating of invento-
ries for each parcel of real property and entry thereof into the state com-
puter system as provided for in K.S.A. 79-1477, and amendments thereto,
shall be completed not later than January 1, 1989. Whenever the director
determines that reappraisal of all real property within a county is com-
plete, notification thereof shall be given to the governor and to the state
board of tax appeals.

      Valuations shall be established for each parcel of real property at its
fair market value in money in accordance with the provisions of K.S.A.
79-503a, and amendments thereto.

      In addition thereto valuations shall be established for each parcel of
land devoted to agricultural use upon the basis of the agricultural income
or productivity attributable to the inherent capabilities of such land in its
current usage under a degree of management reflecting median produc-
tion levels in the manner hereinafter provided. A classification system for
all land devoted to agricultural use shall be adopted by the director of
property valuation using criteria established by the United States depart-
ment of agriculture soil conservation service. For all taxable years com-
mencing after December 31, 1989, all land devoted to agricultural use
which is subject to the federal conservation reserve program shall be
classified as cultivated dry land for the purpose of valuation for property
tax purposes pursuant to this section. Productivity of land devoted to
agricultural use shall be determined for all land classes within each county
or homogeneous region based on an average of the eight calendar years
immediately preceding the calendar year which immediately precedes the
year of valuation, at a degree of management reflecting median produc-
tion levels. The director of property valuation shall determine median
production levels based on information available from state and federal
crop and livestock reporting services, the soil conservation service, and
any other sources of data that the director considers appropriate.

      The share of net income from land in the various land classes within
each county or homogeneous region which is normally received by the
landlord shall be used as the basis for determining agricultural income
for all land devoted to agricultural use except pasture or rangeland. The
net income normally received by the landlord from such land shall be
determined by deducting expenses normally incurred by the landlord
from the share of the gross income normally received by the landlord.
The net rental income normally received by the landlord from pasture or
rangeland within each county or homogeneous region shall be used as
the basis for determining agricultural income from such land. The net
rental income from pasture and rangeland which is normally received by
the landlord shall be determined by deducting expenses normally in-
curred from the gross income normally received by the landlord. Com-
modity prices, crop yields and pasture and rangeland rental rates and
expenses shall be based on an average of the eight calendar years im-
mediately preceding the calendar year which immediately precedes the
year of valuation. Net income for every land class within each county or
homogeneous region shall be capitalized at a rate determined to be the
sum of the contract rate of interest on new federal land bank loans in
Kansas on July 1 of each year averaged over a five-year period which
includes the five years immediately preceding the calendar year which
immediately precedes the year of valuation, plus a percentage not less
than .75% nor more than 2.75%, as determined by the director of prop-
erty valuation.

      Based on the foregoing procedures the director of property valuation
shall make an annual determination of the value of land within each of
the various classes of land devoted to agricultural use within each county
or homogeneous region and furnish the same to the several county ap-
praisers who shall classify such land according to its current usage and
apply the value applicable to such class of land according to the valuation
schedules prepared and adopted by the director of property valuation
under the provisions of this section.

      It is the intent of the legislature that appraisal judgment and appraisal
standards be followed and incorporated throughout the process of data
collection and analysis and establishment of values pursuant to this sec-
tion.

      For the purpose of the foregoing provisions of this section the phrase
"land devoted to agricultural use" shall mean and include land, regardless
of whether it is located in the unincorporated area of the county or within
the corporate limits of a city, which is devoted to the production of plants,
animals or horticultural products, including but not limited to: Forages;
grains and feed crops; dairy animals and dairy products; poultry and poul-
try products; beef cattle, sheep, swine and horses; bees and apiary prod-
ucts; trees and forest products; fruits, nuts and berries; vegetables; nurs-
ery, floral, ornamental and greenhouse products. Land devoted to
agricultural use shall not include those lands which are used for recrea-
tional purposes, other than that land established as a controlled shooting
area pursuant to K.S.A. 32-943, and amendments thereto, which shall be
deemed to be land devoted to agricultural use, suburban residential acre-
ages, rural home sites or farm home sites and yard plots whose primary
function is for residential or recreational purposes even though such prop-
erties may produce or maintain some of those plants or animals listed in
the foregoing definition.

      The term "expenses" shall mean those expenses typically incurred in
producing the plants, animals and horticultural products described above
including management fees, production costs, maintenance and depre-
ciation of fences, irrigation wells, irrigation laterals and real estate taxes,
but the term shall not include those expenses incurred in providing tem-
porary or permanent buildings used in the production of such plants,
animals and horticultural products.

      The provisions of this act shall not be construed to conflict with any
other provisions of law relating to the appraisal of tangible property for
taxation purposes including the equalization processes of the county and
state board of tax appeals.

      Sec.  6. K.S.A. 79-1701 is hereby amended to read as follows: 79-
1701. The county clerk shall, prior to November 1, correct the following
clerical errors in the assessment and tax rolls for the current year, which
are discovered prior to such date:

      (a) Errors in the description or quantity of real estate listed;

      (b) errors in extensions of values or taxes whereby a taxpayer is
charged with unjust taxes;

      (c) errors which have caused improvements to be assessed upon real
estate when no such improvements were in existence;

      (d) (c) errors whereby improvements located upon one tract or lot of
real estate have been assessed as being upon another tract or lot;

      (e) (d) errors whereby taxes have been charged upon property which
the state board of tax appeals has specifically declared to be exempt from
taxation under the constitution or laws of the state;

      (f) (e) errors whereby the taxpayer has been assessed twice in the
same year for the same property in one or more taxing districts in the
county;

      (g) (f) errors whereby the assessment of either real or personal prop-
erty has been assigned to a taxing district in which the property did not
have its taxable situs; and

      (h) (g) errors whereby the values or taxes are understated or over-
stated as a result of a mathematical mistake miscomputation on the part
of the county.

      Sec.  7. K.S.A. 79-1701a is hereby amended to read as follows: 79-
1701a. Any taxpayer, the county appraiser or the county clerk shall, on
their own motion, request the board of county commissioners to order
the correction of the clerical errors in the appraisal, assessment or tax
rolls as described in K.S.A. 79-1701, and amendments thereto. The board
of county commissioners of the several counties are hereby authorized to
order the correction of clerical errors, specified in K.S.A. 79-1701, and
amendments thereto, in the appraisal, assessment or tax rolls for the cur-
rent year and the immediately preceding two years during the period on
and after November 1 of each year. If a county treasurer has collected
and distributed the property taxes of a taxpayer and it shall thereafter be
determined that the tax computed and paid was based on an erroneous
assessment due to a clerical error which resulted in an overpayment of
taxes by the taxpayer, and such error is corrected under the provisions
hereof then the county commissioners may direct a refund in the amount
of the overpayment plus interest at the rate prescribed by K.S.A. 79-2968,
and amendments thereto, from the date of payment from tax moneys
collected during the current year and approve a claim therefor. If all or
any portion of the taxes on such property remain unpaid, the board of
county commissioners shall cancel that portion of such unpaid taxes which
were assessed on the basis of the error which is being corrected. In lieu
of taking such a refund the taxpayer may, at the taxpayer's option, be
allowed a credit on the current year's taxes in the amount of the over-
payment plus interest at the rate prescribed by K.S.A. 79-2968, and
amendments thereto, from the date of payment for the previous year. In
the event the error results in an understatement of value or taxes as a
result of a mathematical mistake miscomputation on the part of the
county, the board of county commissioners of the several counties are
hereby authorized to correct such error and order an additional assess-
ment or tax bill, or both, to be issued, except that, in no such case shall
the taxpayer be assessed interest or penalties on any tax which may be
assessed. If such error applies to property which has been sold or oth-
erwise transferred subsequent to the time the error was made, no such
additional assessment or tax bill shall be issued.

      Sec.  8. K.S.A. 79-1702 is hereby amended to read as follows: 79-
1702. If any taxpayer or any, municipality or taxing district shall have a
grievance not remediable described under the provisions of K.S.A. 79-
1701 or 79-1701a, and amendments thereto, which is not remediable
thereunder solely because not reported within the time prescribed therein,
or which was remediable thereunder and reported to the proper official
or officials within the time prescribed but which has not been remedied
by such official or officials, such grievance may be presented to the state
board of tax appeals and if it shall be satisfied from competent evidence
produced that there is a real grievance, it may direct that the same be
remedied either by canceling the tax, if uncollected, together with all
penalties charged thereon, or if the tax has been paid, by ordering a
refund of the amount found to have been unlawfully charged and col-
lected and interest at the rate prescribed by K.S.A. 79-2968, and amend-
ments thereto, minus two percentage points.

      In all cases where property has been acquired by the state, a political
subdivision or an institution exempt from general property taxation, the
general property tax for all the years prior to 1975 that are unpaid on the
taking effect of this act shall be canceled and abated upon proper appli-
cation hereunder.

      In all cases where the identical property owned by any taxpayer has
been assessed for the current tax year in more than one county in the
state, the board is hereby given authority to determine which county is
entitled to the assessment of the property and to charge legal taxes
thereon, and if the taxes have been paid in a county not entitled thereto,
the board is hereby empowered to direct the authorities of the county
which has so unlawfully collected the taxes to refund the same to the
taxpayer with all penalties charged thereon.

      No tax grievance shall be considered by the board of tax appeals unless
the same is filed within three four years from the date the tax would have
become a lien on real estate, except that the board shall have the au-
thority, upon a finding of excusable neglect or undue hardship, to waive
the limitations period, and that in no event shall the board order a refund
of taxes, pursuant to the authority granted herein, that extends back more
than three years from the date of the most recent tax year without the
aggrieved person showing proof of a unanimous vote by the board of
county commissioners recommending the same. Such vote shall be taken
at a regularly scheduled meeting of the board of county commissioners
and filed with the state board of tax appeals. In any county, such board,
upon the adoption of a resolution so providing, may elect to recommend
any such tax refund upon a majority vote.

      In all cases where an error results in an understatement of values or
taxes as a result of a mathematical mistake miscomputation on the part
of a county, the board of tax appeals, if it shall be satisfied from competent
evidence produced that there is an understatement as a result of a clerical
error, may order an additional assessment or tax bill, or both, to be issued
so that the proper value of the property in question is reflected, except
that, in no such case shall the taxpayer be assessed interest or penalties
on any tax which may be assessed. No increase shall be ordered to correct
such error that extends back more than two years from the date of the
most recent tax year. If such error applies to property which has been
sold or otherwise transferred subsequent to the time the error was made,
no such additional assessment or tax bill shall be issued.

      Errors committed in the valuation and assessment process that are not
specifically enumerated described in K.S.A. 79-1701, and amendments
thereto, shall be remediable only under the provisions of K.S.A. 79-2005,
and amendments thereto.

 Sec.  9. K.S.A. 79-201c, 79-1437f, 79-1460, 79-1476, 79-1701, 79-
1701a and 79-1702 and K.S.A. 1998 Supp. 79-1448 are hereby repealed.

 Sec.  10. This act shall take effect and be in force from and after its
publication in the statute book.

I hereby certify that the above BILL originated in the
SENATE, and passed that body

____________________________________

SENATE adopted
  Conference Committee Report ______________________________

Passed the HOUSE
     as amended ______________________________

HOUSE adopted
  Conference Committee Report ______________________________

APPROVED ______________________________