As Amended by House Committee
         
As Further Amended by Senate Committee
         
As Amended by Senate Committee
         
Session of 1999
         
SENATE BILL No. 124
         
By Senator Hardenburger
         
1-25
         
12             AN  ACT relating to property taxation; concerning the adult care home
13             exemption exemptions therefrom; amending K.S.A. 1998 Supp. 79-
14             201a and 79-201b and repealing the existing section sections.
15      
16       Be it enacted by the Legislature of the State of Kansas:
17        Section  1. K.S.A. 1998 Supp. 79-201a is hereby amended to
18       read as follows: 79-201a. The following described property, to the
19       extent herein specified, shall be exempt from all property or ad va-
20       lorem taxes levied under the laws of the state of Kansas:
21             First. All property belonging exclusively to the United States, ex-
22       cept property which congress has expressly declared to be subject
23       to state and local taxation.
24             Second. All property used exclusively by the state or any munic-
25       ipality or political subdivision of the state. All property owned, be-
26       ing acquired pursuant to a lease-purchase agreement or operated
27       by the state or any municipality or political subdivision of the state,
28       including property which is vacant or lying dormant, which is used
29       or is to be used for any governmental or proprietary function and
30       for which bonds may be issued or taxes levied to finance the same,
31       shall be considered to be used exclusively by the state, municipality
32       or political subdivision for the purposes of this section. The lease
33       by a municipality or political subdivision of the state of any real
34       property owned or being acquired pursuant to a lease-purchase
35       agreement for the purpose of providing office space necessary for
36       the performance of medical services by a person licensed to practice
37       medicine and surgery or osteopathic medicine by the board of heal-
38       ing arts pursuant to K.S.A. 65-2801 et seq., and amendments
39       thereto, dentistry services by a person licensed by the Kansas dental
40       board pursuant to K.S.A. 65-1401 et seq., and amendments thereto,
41       optometry services by a person licensed by the board of examiners

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  1       in optometry pursuant to K.S.A. 65-1501 et seq., and amendments
  2       thereto, or K.S.A. 74-1501 et seq., and amendments thereto, podiatry
  3       services by a person licensed by the board of healing arts pursuant
  4       to K.S.A. 65-2001 et seq., and amendments thereto, or the practice
  5       of psychology by a person licensed by the behavioral sciences reg-
  6       ulatory board pursuant to K.S.A. 74-5301 et seq., and amendments
  7       thereto, shall be construed to be a governmental function, and such
  8       property actually and regularly used for such purpose shall be
  9       deemed to be used exclusively for the purposes of this paragraph.
10       The lease by a municipality or political subdivision of the state of
11       any real property, or portion thereof, owned or being acquired pur-
12       suant to a lease-purchase agreement to any entity for the exclusive
13       use by it for an exempt purpose, including the purpose of displaying
14       or exhibiting personal property by a museum or historical society,
15       if no portion of the lease payments include compensation for return
16       on the investment in such leased property shall be deemed to be
17       used exclusively for the purposes of this paragraph. All property
18       leased, other than property being acquired pursuant to a lease-pur-
19       chase agreement, to the state or any municipality or political sub-
20       division of the state by any private entity shall not be considered
21       to be used exclusively by the state or any municipality or political
22       subdivision of the state for the purposes of this section except that
23       the provisions of this sentence shall not apply to any such property
24       subject to lease on the effective date of this act until the term of
25       such lease expires but property taxes levied upon any such property
26       prior to tax year 1989, shall not be abated or refunded. Any prop-
27       erty constructed or purchased with the proceeds of industrial rev-
28       enue bonds issued prior to July 1, 1963, as authorized by K.S.A. 12-
29       1740 to 12-1749, or purchased with proceeds of improvement
30       district bonds issued prior to July 1, 1963, as authorized by K.S.A.
31       19-2776, or with proceeds of bonds issued prior to July 1, 1963, as
32       authorized by K.S.A. 19-3815a and 19-3815b, or any property im-
33       proved, purchased, constructed, reconstructed or repaired with the
34       proceeds of revenue bonds issued prior to July 1, 1963, as author-
35       ized by K.S.A. 13-1238 to 13-1245, inclusive, or any property im-
36       proved, reimproved, reconstructed or repaired with the proceeds of
37       revenue bonds issued after July 1, 1963, under the authority of
38       K.S.A. 13-1238 to 13-1245, inclusive, which had previously been
39       improved, reconstructed or repaired with the proceeds of revenue
40       bonds issued under such act on or before July 1, 1963, shall be
41       exempt from taxation for so long as any of the revenue bonds issued
42       to finance such construction, reconstruction, improvement, repair
43       or purchase shall be outstanding and unpaid. Any property con-

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  1       structed or purchased with the proceeds of any revenue bonds au-
  2       thorized by K.S.A. 13-1238 to 13-1245, inclusive, 19-2776, 19-
  3       3815a and 19-3815b, and amendments thereto, issued on or after
  4       July 1, 1963, shall be exempt from taxation only for a period of 10
  5       calendar years after the calendar year in which the bonds were
  6       issued. Any property, all or any portion of which is constructed or
  7       purchased with the proceeds of revenue bonds authorized by K.S.A.
  8       12-1740 to 12-1749, inclusive, and amendments thereto, issued on
  9       or after July 1, 1963 and prior to July 1, 1981, shall be exempt from
10       taxation only for a period of 10 calendar years after the calendar
11       year in which the bonds were issued. Except as hereinafter pro-
12       vided, any property constructed or purchased wholly with the pro-
13       ceeds of revenue bonds issued on or after July 1, 1981, under the
14       authority of K.S.A. 12-1740 to 12-1749, inclusive, and amendments
15       thereto, shall be exempt from taxation only for a period of 10 cal-
16       endar years after the calendar year in which the bonds were issued.
17       Except as hereinafter provided, any property constructed or pur-
18       chased in part with the proceeds of revenue bonds issued on or after
19       July 1, 1981, under the authority of K.S.A. 12-1740 to 12-1749,
20       inclusive, and amendments thereto, shall be exempt from taxation
21       to the extent of the value of that portion of the property financed
22       by the revenue bonds and only for a period of 10 calendar years
23       after the calendar year in which the bonds were issued. The exemp-
24       tion of that portion of the property constructed or purchased with
25       the proceeds of revenue bonds shall terminate upon the failure to
26       pay all taxes levied on that portion of the property which is not
27       exempt and the entire property shall be subject to sale in the manner
28       prescribed by K.S.A. 79-2301 et seq., and amendments thereto. Prop-
29       erty constructed or purchased in whole or in part with the proceeds
30       of revenue bonds issued on or after January 1, 1995, under the
31       authority of K.S.A. 12-1740 to 12-1749, inclusive, and amendments
32       thereto, and used in any retail enterprise identified under the stan-
33       dard industrial classification codes, major groups 52 through 59,
34       inclusive, except facilities used exclusively to house the headquar-
35       ters or back office operations of such retail enterprises identified
36       thereunder, shall not be exempt from taxation. For the purposes of
37       the preceding provision "standard industrial classification code"
38       means a standard industrial classification code published in the
39       Standard Industrial Classification manual, 1987, as prepared by
40       the statistical policy division of the office of management and
41       budget of the office of the president of the United States. "Head-
42       quarters or back office operations" means a facility from which the
43       enterprise is provided direction, management, administrative serv-

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  1       ices, or distribution or warehousing functions in support of trans-
  2       actions made by the enterprise. Property purchased, constructed,
  3       reconstructed, equipped, maintained or repaired with the proceeds
  4       of industrial revenue bonds issued under the authority of K.S.A. 12-
  5       1740 et seq., and amendments thereto, which is located in a rede-
  6       velopment project area established under the authority of K.S.A.
  7       12-1770 et seq. shall not be exempt from taxation. Property pur-
  8       chased, acquired, constructed, reconstructed, improved, equipped,
  9       furnished, repaired, enlarged or remodeled with all or any part of
10       the proceeds of revenue bonds issued under authority of K.S.A. 12-
11       1740 to 12-1749a, inclusive, and amendments thereto for any poul-
12       try confinement facility on agricultural land which is owned, ac-
13       quired, obtained or leased by a corporation, as such terms are
14       defined by K.S.A. 17-5903 and amendments thereto, shall not be
15       exempt from such taxation. Property purchased, acquired, con-
16       structed, reconstructed, improved, equipped, furnished, repaired,
17       enlarged or remodeled with all or any part of the proceeds of rev-
18       enue bonds issued under the authority of K.S.A. 12-1740 to 12-
19       1749a, inclusive, and amendments thereto, for a rabbit confinement
20       facility on agricultural land which is owned, acquired, obtained or
21       leased by a corporation, as such terms are defined by K.S.A. 17-
22       5903 and amendments thereto, shall not be exempt from such
23       taxation.
24             Third. All works, machinery and fixtures used exclusively by any
25       rural water district or township water district for conveying or pro-
26       duction of potable water in such rural water district or township
27       water district, and all works, machinery and fixtures used exclu-
28       sively by any entity which performed the functions of a rural water
29       district on and after January 1, 1990, and the works, machinery and
30       equipment of which were exempted hereunder on March 13, 1995.
31             Fourth. All fire engines and other implements used for the extin-
32       guishment of fires, with the buildings used exclusively for the safe-
33       keeping thereof, and for the meeting of fire companies, whether be-
34       longing to any rural fire district, township fire district, town, city
35       or village, or to any fire company organized therein or therefor.
36             Fifth. All property, real and personal, owned by county fair as-
37       sociations organized and operating under the provisions of K.S.A.
38       2-125 et seq. and amendments thereto.
39             Sixth. Property acquired and held by any municipality under the
40       municipal housing law (K.S.A. 17-2337 et seq.) and amendments
41       thereto, except that such exemption shall not apply to any portion
42       of the project used by a nondwelling facility for profit making
43       enterprise.

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  1             Seventh. All property of a municipality, acquired or held under
  2       and for the purposes of the urban renewal law (K.S.A. 17-4742 et
  3       seq.) and amendments thereto except that such tax exemption shall
  4       terminate when the municipality sells, leases or otherwise disposes
  5       of such property in an urban renewal area to a purchaser or lessee
  6       which is not a public body entitled to tax exemption with respect to
  7       such property.
  8             Eighth. All property acquired and held by the Kansas armory
  9       board for armory purposes under the provisions of K.S.A. 48-317,
10       and amendments thereto.
11             Ninth. All property acquired and used by the Kansas turnpike
12       authority under the authority of K.S.A. 68-2001 et seq., and amend-
13       ments thereto, K.S.A. 68-2030 et seq., and amendments thereto,
14       K.S.A. 68-2051 et seq., and amendments thereto, and K.S.A. 68-2070
15       et seq., and amendments thereto.
16             Tenth. All property acquired and used for state park purposes by
17       the Kansas department of wildlife and parks.
18             Eleventh. The state office building constructed under authority of
19       K.S.A. 75-3607 et seq., and amendments thereto, and the site upon
20       which such building is located.
21             Twelfth. All buildings erected under the authority of K.S.A. 76-
22       6a01 et seq., and amendments thereto, and all other student union
23       buildings and student dormitories erected upon the campus of any
24       institution mentioned in K.S.A. 76-6a01, and amendments thereto,
25       by any other nonprofit corporation.
26             Thirteenth. All buildings, as the same is defined in subsection (c)
27       of K.S.A. 76-6a13, and amendments thereto, which are erected, con-
28       structed or acquired under the authority of K.S.A. 76-6a13 et seq.,
29       and amendments thereto, and building sites acquired therefor.
30             Fourteenth. All that portion of the waterworks plant and system
31       of the city of Kansas City, Missouri, now or hereafter located within
32       the territory of the state of Kansas pursuant to the compact and
33       agreement adopted by chapter 304 of the 1921 Session Laws of the
34       state of Kansas. [See K.S.A. 79-205].
35             Fifteenth. All property, real and personal, owned by a ground-
36       water management district organized and operating pursuant to
37       K.S.A. 82a-1020, and amendments thereto.
38             Sixteenth. All property, real and personal, owned by the joint wa-
39       ter district organized and operating pursuant to K.S.A. 80-1616 et
40       seq., and amendments thereto.
41             Seventeenth. All property, including interests less than fee own-
42       ership, acquired for the state of Kansas by the secretary of trans-
43       portation or a predecessor in interest which is used in the admin-

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  1       istration, construction, maintenance or operation of the state system
  2       of highways, regardless of how or when acquired.
  3             Eighteenth. Any building used primarily as an industrial training
  4       center for academic or vocational education programs designed for
  5       and operated under contract with private industry, and located
  6       upon a site owned, leased or being acquired by or for an area vo-
  7       cational school, an area vocational-technical school, a technical col-
  8       lege, or a community college, as defined by K.S.A. 72-4412, and
  9       amendments thereto, and the site upon which any such building is
10       located.
11             Nineteenth. For all taxable years commencing after December 31, 1997,
12       all buildings of an area vocational school, an area vocational-technical
13       school, a technical college or a community college, as defined by K.S.A.
14       72-4412, and amendments thereto, which are owned and operated by any
15       such school or college as a student union or dormitory, and the site upon
16       which any such building is located.
17             Except as otherwise specifically provided, the provisions of this
18       section shall apply to all taxable years commencing after December
19       31, 1997 1998.
20             Section  1. 2. K.S.A. 1998 Supp. 79-201b is hereby amended to read
21       as follows: 79-201b. The following described property, to the extent
22       herein specified, shall be and is hereby exempt from all property or ad
23       valorem taxes levied under the laws of the state of Kansas:
24             First. All real property, and tangible personal property, actually and
25       regularly used exclusively for hospital purposes by a hospital as the same
26       is defined by K.S.A. 65-425, and amendments thereto, or a psychiatric
27       hospital as the same was defined by K.S.A. 59-2902, and amendments
28       thereto, as in effect on January 1, 1976, which hospital or psychiatric
29       hospital is operated by a corporation organized not for profit under the
30       laws of the state of Kansas or by a corporation organized not for profit
31       under the laws of another state and duly admitted to engage in business
32       in this state as a foreign, not-for-profit corporation, or a public hospital
33       authority; and all intangible property including moneys, notes and other
34       evidences of debt, and the income therefrom, belonging exclusively to
35       such a corporation and used exclusively for hospital, psychiatric hospital
36       or public hospital authority purposes. This exemption shall not be deemed
37       inapplicable to property which would otherwise be exempt pursuant to
38       this paragraph because any such hospital, psychiatric hospital or public
39       hospital authority: (a) Uses such property for a nonexempt purpose which
40       is minimal in scope and insubstantial in nature if such use is incidental to
41       the exempt purpose enumerated in this paragraph; or (b) is reimbursed
42       for the actual expense of using such property for the exempt purposes
43       enumerated in this paragraph or paragraph second of K.S.A. 79-201, and

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  1       amendments thereto; or (c) permits the use of such property for the
  2       exempt purposes enumerated in this paragraph or paragraph second of
  3       K.S.A. 79-201, and amendments thereto, by more than one agency or
  4       organization for one or more of such purposes.
  5             Second. All real property, and tangible personal property, actually and
  6       regularly used exclusively for adult care home purposes by an adult care
  7       home as the same is defined by K.S.A. 39-923, and amendments thereto,
  8       which is operated by a corporation organized not for profit under the laws
  9       of the state of Kansas or by a corporation organized not for profit under
10       the laws of another state and duly admitted to engage in business in this
11       state as a foreign, not-for-profit corporation, charges to residents for serv-
12       ices of which produce an amount which in the aggregate is less than the
13       actual cost of operation of the home or the services of which are provided
14       to residents at the lowest feasible cost, taking into consideration such
15       items as reasonable depreciation, interest on indebtedness, acquisition
16       costs, interest and other expenses of financing acquisition costs, lease
17       expenses and costs of services provided by a parent corporation at its
18       costs, and contributions to which are deductible under the Kansas income
19       tax act; and all intangible property including moneys, notes and other
20       evidences of debt, and the income therefrom, belonging exclusively to
21       such corporation and used exclusively for adult care home purposes. For
22       purposes of this paragraph and for all taxable years commencing
23       after December 31, 1976, an adult care home which uses its prop-
24       erty in a manner which is consistent with the federal internal rev-
25       enue service ruling 72-124 issued pursuant to section 501(c)(3) of
26       the federal internal revenue code, shall be deemed to be operating
27       at the lowest feasible cost. The fact that real property or real or tangible
28       personal property may be leased from a not-for-profit corporation, which
29       is exempt from federal income taxation pursuant to section 501(c)(3) of
30       the internal revenue code of 1986, and amendments thereto, and which
31       is the parent corporation to the not-for-profit operator of an adult care
32       home, shall not be grounds to deny exemption or deny that such property
33       is actually and regularly used exclusively for adult care home purposes by
34       an adult care home, nor shall the terms of any such lease be grounds for
35       any such denial. For all taxable years commencing after December 31,
36       1997 1995, such property shall be deemed to be used exclusively for adult
37       care home purposes when used as a not-for-profit day care center for
38       children which is licensed pursuant to K.S.A. 65-501 et seq., and amend-
39       ments thereto.
40             Third. All real property, and tangible personal property, actually and
41       regularly used exclusively for private children's home purposes by a pri-
42       vate children's home as the same is defined by K.S.A. 75-3329, and
43       amendments thereto, which is operated by a corporation organized not

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  1       for profit under the laws of the state of Kansas or by a corporation or-
  2       ganized not for profit under the laws of another state and duly admitted
  3       to engage in business in this state as a foreign, not-for-profit corporation,
  4       charges to residents for services of which produce an amount which in
  5       the aggregate is less than the actual cost of operation of the home or the
  6       services of which are provided to residents at the lowest feasible cost,
  7       taking into consideration such items as reasonable depreciation and in-
  8       terest on indebtedness, and contributions to which are deductible under
  9       the Kansas income tax act; and all intangible property including moneys,
10       notes and other evidences of debt, and the income therefrom, belonging
11       exclusively to such a corporation and used exclusively for children's home
12       purposes.
13             Fourth. All real property and tangible personal property, actually and
14       regularly used exclusively for housing for elderly and handicapped per-
15       sons having a limited or lower income, or used exclusively for cooperative
16       housing for persons having a limited or low income, assistance for the
17       financing of which was received under 12 U.S.C.A. 1701 et seq., or under
18       42 U.S.C.A. 1437 et seq., which is operated by a corporation organized
19       not for profit under the laws of the state of Kansas or by a corporation
20       organized not for profit under the laws of another state and duly admitted
21       to engage in business in this state as a foreign, not-for-profit corporation;
22       and all intangible property including moneys, notes and other evidences
23       of debt, and the income therefrom, belonging exclusively to such a cor-
24       poration and used exclusively for the purposes of such housing. For the
25       purposes of this subsection, cooperative housing shall mean those not-
26       for-profit cooperative housing projects operating pursuant to sections 236
27       or 221(d)(3), or both, of the national housing act and which have been
28       approved as a cooperative housing project pursuant to applicable federal
29       housing administration and U.S. Department of Housing and Urban De-
30       velopment statutes, and rules and regulations, during such time as the
31       use of such properties are restricted pursuant to such act, statutes or rules
32       and regulations.
33             Fifth. All real property and tangible personal property, actually and
34       regularly used exclusively for housing for elderly persons, which is oper-
35       ated by a corporation organized not for profit under the laws of the state
36       of Kansas or by a corporation organized not for profit under the laws of
37       another state and duly admitted to engage in business in this state as a
38       foreign, not-for-profit corporation, in which charges to residents produce
39       an amount which in the aggregate is less than the actual cost of operation
40       of the housing facility or the services of which are provided to residents
41       at the lowest feasible cost, taking into consideration such items as rea-
42       sonable depreciation and interest on indebtedness and contributions to
43       which are deductible under the Kansas income tax act; and all intangible

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  1       property including moneys, notes and other evidences of debt, and the
  2       income therefrom, belonging exclusively to such corporation and used
  3       exclusively for the purpose of such housing. For purposes of this par-
  4       agraph and for all taxable years commencing after December 31,
  5       1976, an adult care home which uses its property in a manner
  6       which is consistent with the federal internal revenue service ruling
  7       72-124 issued pursuant to section 501(c)(3) of the federal internal
  8       revenue code, shall be deemed to be operating at the lowest fea-
  9       sible cost. For all taxable years commencing after December 31, 1997
10       1995, such property shall be deemed to be used exclusively for housing
11       for elderly persons purposes when used as a not-for-profit day care center
12       for children which is licensed pursuant to K.S.A. 65-501 et seq., and
13       amendments thereto.
14             Sixth. All real property and tangible personal property actually and
15       regularly used exclusively for the purpose of group housing of mentally
16       ill or retarded and other handicapped persons which is operated by a
17       corporation organized not for profit under the laws of the state of Kansas
18       or by a corporation organized not for profit under the laws of another
19       state and duly admitted to engage in business in this state as a foreign,
20       not-for-profit corporation, in which charges to residents produce an
21       amount which in the aggregate is less than the actual cost of operation of
22       the housing facility or the services of which are provided to residents at
23       the lowest feasible cost, taking into consideration such items as reasonable
24       depreciation and interest on indebtedness and contributions to which are
25       deductible under the Kansas income tax act, and which is licensed as a
26       facility for the housing of mentally ill or retarded and other handicapped
27       persons under the provisions of K.S.A. 75-3307b, and amendments
28       thereto, or as a rooming or boarding house used as a facility for the
29       housing of mentally retarded and other handicapped persons which is
30       licensed as a lodging establishment under the provisions of K.S.A. 36-501
31       et seq., and amendments thereto.
32             The provisions of this section, except as otherwise specifically provided,
33       shall apply to all taxable years commencing after December 31, 1995
34       1998. 
35       Sec.  2. 3. K.S.A. 1998 Supp. 79-201a and 79-201b is are hereby
36       repealed.
37        Sec.  3. 4. This act shall take effect and be in force from and after its
38       publication in the statute book.