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Minutes for HB2023 - Committee on Taxation
Short Title
Changing to an eight-year simple average when determining values of agricultural land for purposes of property taxation.
Minutes Content for Wed, Feb 3, 2021
Chairperson Smith opened the hearing on HB2023.
Adam Siebers provided an overview on HB2023 that amends how land devoted to agriculture is valued for property tax purposes. Starting in tax year 2023, commodity prices, crop yields and crop mix shall only be based on data of such calendar year. (Attachment 1)
HB2023 has not fiscal effect on the operations of the Department of Revenue.
Representative Ron Highland, 51st District testified as a proponent for HB2023 stating many people living in the rural areas have heard complaints from landowners, landlords, and county commissioners concerning property taxes. He stated he worked with Dr. Allen Featherstone, K-State Department of Agricultural Economics to ascertain why there is so many complaints and it was determined to be the 8-year rolling average which actually is a 16-year average plus 2. Dr, Featherstone did an in depth study at possible remedies for the 8-year rolling average which is provided in Representative Highland's testimony. (Attachment 2) (Attachment 3)
Representative Highland stood for questions from Committee members.
John Donley, Kansas Farm Bureau testified as an opponent to HB2023 stating the bill would likely decrease property taxes on many of the Farm Bureau members for the next five to eight years. Mr. Donley included a link to the AgManager study by Dr. Featherstone in his testimony. He noted in the study it shows the 8 to 10- year average of what would happen going from a 8 years moving average to a 8-year straight. Valuations will equal out but the volatility of those yearly valuations will increase under the proposed bill making long-term budgeting and planning at an individual level more difficult. (Attachment 4) (Attachment 5) (Attachment 6)
Mr. Donely stood for questions from Committee members.
Dean Klahr, Director of Stockgrowers Division, Kansas Livestock Association testified as neutral to HB2023 stating the bill will cause increased volatility in agricultural land valuation and long-term average valuations will remain the same. The bill also has short-term benefits to agricultural land valuations in the 8-year simple average. The 8-year current formula is designed to smooth variability between yearly property tax rates on agricultural land for the landowner and local government when planning for budgets. HB2023 is designed for property tax rates on agricultural land to reflect current market conditions based on a simple 8-year average. Mr. Klahr noted valuations are only one part of tax liability and the other part is the mill levy. (Attachment 7)
Mr. Klahr stood for questions from Committee members.
Doug Smith, Pinegar, Smith & Associates testified on behalf of Charles McKinney, Clark County Commissioner as neutral to HB2023 noting something needs to be done regarding the property tax burden. They support tax policy that is fair and equitable within a transparent process that provides both taxpayers and local government with stability and certainty. (Attachment 8)
Written testimony as neutral to HB2023 was submitted by the following:
Jay Hall, Kansas Association of Counties (Attachment 9)
Josh Roe, Kansas Corn Growers (Attachment 10)
Chairperson Smith closed the hearing on HB2023.
