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Minutes for HB2272 - Committee on Taxation
Short Title
Delaying distribution of certain property taxes paid under protest and requiring certain information on protested or exempt property taxes to be provided to local taxing jurisdictions.
Minutes Content for Tue, Feb 23, 2021
Chairperson Adam Smith opened the hearing for HB2272.
Adam Siebers, Assistant Revisor provided an overview for HB2272 that provides for the escrowing of certain taxes paid under protest and providing notice by the county appraiser to other taxing entities. (Attachment 1)
Kathleen Smith, Kansas Department of Revenue stated HB2272 does not have any fiscal impact on the State General Fund. The bill has the potential to delay the distribution of property taxes collected from certain properties.
In response to a question, Ms. Smith stated she would provide information on how the appeals are handled with state assessed properties.
Proponents:
Randy Stookey, Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, and Renew Kansas Biofuels Association testified as a proponent to HB2272 stating it is an important issue for all industries. He noted the biofuels facilities, the grain elevator industry, and the agribusiness retailers all have complex properties and collectively pay millions of dollars in property taxes every year. In recent years, the property taxes have grown through unreasonable increases in assessed property valuation which has resulted in massive increases in property taxes for their members. He noted during an appeal of large valuation increases those tax dollars that are paid under protest would be escrowed and not budgeted by local units of government or school boards until the final time the appeal has been determined. HB2272 is great policy for the State of Kansas, both local units of government and the taxpayer. This bill is reasonable and a practical change to the current property tax system that benefits both taxpayers and taxing authority. (Attachment 2)
Mr. Stookey stood for questions from Committee members and there was Committee discussion regarding the appeal process.
Eric Stafford, Kansas Chamber testified as a proponent to HB2272 noted there is one member under appeal for multiple properties. The Court of Appeals made their decision in 2020 for tax year 2016 and now the appeal is going to the Supreme Court. Local government have publicly claimed if the taxpayer is successful in their appeal of their property valuation increase, it will be disastrous to the county and taxpayer who will have to foot the bill. Mr. Stafford stated there are 56 big box retail properties in Johnson County that are under appeal for tax year 2016 due to a 110% increase in property valuation. He stated there is a need to address the appeal process and it is a real issue that their members are facing. (Attachment 3)
Mr. Stafford stood for questions from Committee members.
Written testimony as a proponent to HB2272 was submitted by the following:
Mark Tomb, Kansas Association of Realtors (Attachment 4)
Shahira Stafford, Kansas Cooperative Council (Attachment 5)
Opponents:
Jay Hall, Kansas Association of Counties testified via Webex as an opponent for HB2272 noting his testimony has concerns regarding the bill. With the possible passage of SB13 and budgeting changes that are coming as a result of the legislation, they are hesitant on HB2272 due to how the bill is going to affect county budgets. He noted if money is taken out due to a property tax valuation appeal, there would have to be an adjustment on the mill levy at the county level in order to account for the money that is in escrow. (Attachment 6)
Mr. Hall stood for questions from Committee members.
Written testimony as an opponent to HB2272 was submitted by the following:
Thomas Franzen, Johnson County Treasurer (Attachment 7)
April Hall, Kansas County Treasurers Association (Attachment 8)
Neutral:
Trey Cocking, League of Kansas Municipalities testified as neutral to HB2272 noting that the city portion of taxes under dispute not be held in escrow since cities are not involved in the appraisal of real property or the amount under protest be exempted from the tax neutral rate. (Attachment 9)
Written testimony as neutral to HB2272 was submitted by Michael Koss, City of Overland Park (Attachment 10)
Chairperson Smith closed the hearing on HB2272.
