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Minutes for HB2254 - Committee on Taxation
Short Title
Amending the definition of land devoted to agricultural use for property tax purposes to include properties used as part of registered agritourism activities.
Minutes Content for Mon, Feb 20, 2023
Chairperson Smith opened the hearing for HB2254.
Adam Siebers, Assistant Revisor, provided an overview on HB2254. The bill would classify land devoted to agricultural land that is utilized as part of a registered agritourism activity at a registered agritourism location by a registered agritourism operator pursuant to Kansas statutue. (Attachment 1) Mr. Siebers stood for questions from the Committee.
David Harper, Kansas Department of Revenue, provided an overview of the fiscal note for HB2254 stating the Department does not have data on the property that would be reclassified under the provisions of the bill; therefore, a precise estimate of the amount of decreased property tax revenues and its effect on local and state revenues cannot be estimated. Mr. Harper stood for question from Committee members.
Proponents:
Representative Neelly, House District 42, testified as a proponent to HB2254 which brings clarity and fairness to agri-business and not just an agritourism issue. The State of Kansas published a 25-page publication on Agri-Tourism which provided informaton on how to get in Agritourism and build a business. There were many new businesses as a result of the publication but many of the new businesses were assessed by their County Tax Appraisers as a commercial entity and no longer agriculture. The state interpreted the tax laws to mean any entity selling to the public is commercial. Representative Neelly noted if the issue is not fixed the majority of small agri-businesses will not be here next year. (Attachment 2) Representative Neelly stood for questions from Committee members.
John Donley, Kansas Farm Bureau, testified as a proponent for HB2254 noting specialty crops and agritourism have become an important aspect of agriculture in the state of Kansas. HB2254 is intended to ensure that agritourism activities and the real estate on which they are conducted are considered agricultural. Mr. Donley stood for questions from Committee members. (Attachment 3)
Bryan Zesiger, Leavenworth County resident and owner of Z&M Twisted Vineyard and Winery, testified as a proponent for HB2254. Mr. Zesiger noted their farm was assessed and taxed commercially on buildings and some of the property on the farm. There were other places in the state that was having issues with counties assessing portions of farms, and ranches as commercial property. He stated this started in 2021 after the release and publication of the Kansas Agritourism handbook which he uses as a guide to bring customers to their vineyard. The Property Valuation Division agreed that his farm winery products when sold to the public are not agriculture but are commercial, and are taxing buildings, property, and gravel parking lots commercially. Mr. Zesiger stated by enacting HB2254 to start with the fiscal year of 2021 will solidify and protect those agricultural entities currently assessed and taxed incorrectly. (Attachment 4) Mr. Zesiger stood for questions from Committee members.
Neutral:
Rachel Willis, Kansas Department of Commerce provided written testimony as neutral to HB2254. (Attachment 5)
Chairperson Smith closed the hearing on HB2254.
