HB 2035--
By Committee on Taxation

AN ACT amending the homestead property tax refund act; amending K.S.A. 79-4505 and 79-4508 and K.S.A. 1996 Supp. 79-4502 and re- pealing the existing sections; also repealing K.S.A. 79-4520. Be it enacted by the Legislature of the State of Kansas: Section 1. K.S.A. 1996 Supp. 79-4502 is hereby amended to read as follows: 79-4502. As used in this act, unless the context clearly indicates otherwise: (a) ``Income'' means the sum of adjusted gross income under the Kansas income tax act, maintenance, support money, cash public assis- tance and relief (not including any refund granted under this act), the gross amount of any pension or annuity (including all monetary retire- ment benefits from whatever source derived, including but not limited to, railroad retirement benefits, all payments received under the federal social security act and veterans disability pensions), all dividends and in- terest from whatever source derived not included in adjusted gross in- come, workers compensation and the gross amount of ``loss of time'' in- surance. It does not include gifts from nongovernmental sources or surplus food or other relief in kind supplied by a governmental agency, nor shall net operating losses and net capital losses be considered in the determination of income. (b) ``Household'' means a claimant, a claimant and spouse who oc- cupy the homestead or a claimant and one or more individuals not related as husband and wife who together own or rent and occupy a homestead. (c) ``Household income'' means all income received by all persons of a household in a calendar year while members of such household. (d) ``Homestead'' means the dwelling, or any part thereof, whether owned or rented, which is occupied as a residence by the household and so much of the land surrounding it, as defined as a home site for ad valorem tax purposes, and may consist of a part of a multi-dwelling or multi-purpose building and a part of the land upon which it is built or a manufactured home or mobile home and the land upon which it is situ- ated. ``Owned'' includes a vendee in possession under a land contract, a life tenant, a beneficiary under a trust and one or more joint tenants or tenants in common. (e) ``Claimant'' means a person who has filed a claim under the pro- visions of this act and was, during the entire calendar year preceding the year in which such claim was filed for refund under this act, except as provided in K.S.A. 79-4503, and amendments thereto, both domiciled in this state and was: (1) A person having a disability; (2) a person who is 55 years of age or older or (3) a person other than a person included under (1) or (2) having one or more dependent children under 18 years of age residing at the person's homestead during the calendar year immediately preceding the year in which a claim is filed under this act. When a homestead is occupied by two or more individuals and more than one of the individuals is able to qualify as a claimant, the individuals may determine between them as to whom the claimant will be. If they are unable to agree, the matter shall be referred to the secretary of rev- enue whose decision shall be final. (f) ``Property taxes accrued'' means property taxes, exclusive of special assessments, delinquent interest and charges for service, levied on a clai- mant's homestead in 1979 or any calendar year thereafter by the state of Kansas and the political and taxing subdivisions of the state. When a homestead is owned by two or more persons or entities as joint tenants or tenants in common and one or more of the persons or entities is not a member of claimant's household, ``property taxes accrued'' is that part of property taxes levied on the homestead that reflects the ownership percentage of the claimant's household. For purposes of this act, property taxes are ``levied'' when the tax roll is delivered to the local treasurer with the treasurer's warrant for collection. When a claimant and household own their homestead part of a calendar year, ``property taxes accrued'' means only taxes levied on the homestead when both owned and occupied as a homestead by the claimant's household at the time of the levy, mul- tiplied by the percentage of 12 months that the property was owned and occupied by the household as its homestead in the year. When a house- hold owns and occupies two or more different homesteads in the same calendar year, property taxes accrued shall be the sum of the taxes allo- cable to those several properties while occupied by the household as its homestead during the year. Whenever a homestead is an integral part of a larger unit such as a multi-purpose or multi-dwelling building, property taxes accrued shall be that percentage of the total property taxes accrued as the value of the homestead is of the total value. For the purpose of this act, the word ``unit'' refers to that parcel of property covered by a single tax statement of which the homestead is a part. (g) ``Disability'' means: (1) Inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months, and an individual shall be determined to be under a disability only if the physical or mental im- pairment or impairments are of such severity that the individual is not only unable to do the individual's previous work but cannot, considering age, education and work experience, engage in any other kind of sub- stantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which the individual lives or whether a specific job vacancy exists for the individual, or whether the individual would be hired if application was made for work. For pur- poses of the preceding sentence (with respect to any individual), ``work which exists in the national economy'' means work which exists in signif- icant numbers either in the region where the individual lives or in several regions of the country; for purposes of this subsection, a ``physical or mental impairment'' is an impairment that results from anatomical, phys- iological or psychological abnormalities which are demonstrable by med- ically acceptable clinical and laboratory diagnostic techniques; or (2) blindness and inability by reason of blindness to engage in sub- stantial gainful activity requiring skills or abilities comparable to those of any gainful activity in which the individual has previously engaged with some regularity and over a substantial period of time. (h) ``Blindness'' means central visual acuity of 20/200 or less in the better eye with the use of a correcting lens. An eye which is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be consid- ered for the purpose of this paragraph as having a central visual acuity of 20/200 or less. (i) ``Rent constituting property taxes accrued'' means 15% of the gross rent actually paid in cash or its equivalent in 1979 or any taxable year thereafter by a claimant and claimant's household solely for the right of occupancy of a Kansas homestead on which ad valorem property taxes were levied in full for that year. When a household occupies two or more different homesteads in the same calendar year, rent constituting prop- erty taxes accrued shall be computed by adding the rent constituting property taxes accrued for each property rented by the household while occupied by the household as its homestead during the year. (j) ``Gross rent'' means the rental paid at arm's length solely for the right of occupancy of a homestead or space rental paid to a landlord for the parking of a mobile home, exclusive of charges for any utilities, serv- ices, furniture and furnishings or personal property appliances furnished by the landlord as a part of the rental agreement, whether or not expressly set out in the rental agreement. Whenever the director of taxation finds that the landlord and tenant have not dealt with each other at arms length and that the gross rent charge was excessive, the director may adjust the gross rent to a reasonable amount for the purposes of the claim. Sec. 2. K.S.A. 79-4505 is hereby amended to read as follows: 79- 4505. Except as provided in K.S.A. 79-4517, and amendments thereto, no claim in respect of property taxes levied in any year shall be paid or allowed unless such claim is actually filed with and in the possession of the department of revenue on or before October April 15 of the year next succeeding the year in which said taxes were levied. Sec. 3. K.S.A. 79-4508 is hereby amended to read as follows: 79- 4508. The amount of any claim pursuant to this act shall be computed by deducting the amount computed under column (2) from the amount of claimant's property tax accrued and/or rent constituting property tax ac- crued. (1) (2) Claimants householdincome Deduction from property tax accruedand/or rent constituting At least But not more than property tax accrued $0 $3,000 0 $3,000.0 3,500 1% of income in excess of $3,000 3,500.01 4,000 $ 5 plus 2% of income in excess of $3,500 4,000.01 4,500 $ 15 plus 3% of income in excess of $4,000 4,500.01 7,000 $ 30 plus 4% of income in excess of $4,500 7,000.01 $130 plus 41/2% of income in excess of $7,000 $0 $3,000 $0 3,001 4,000 12% of income 4,001 25,000 12% of income plus 4% of every $1,000, or frac-tion thereof, of income in excess of $4,001 The director of taxation shall prepare a table under which claims under this act shall be determined. The amount of claim for each bracket shall be computed only to the nearest one dollar ($1) $1. The claimant may elect not to record the amount claimed on the claim. The claim allowable to persons making this election shall be computed by the department which shall notify the claimant by mail of the amount of the allowable claim. Sec. 4. K.S.A. 79-4505, 79-4508 and 79-4520 and K.S.A. 1996 Supp. 79-4502 are hereby repealed. Sec. 5. This act shall take effect and be in force from and after Oc- tober 16, 1997, and its publication in the statute book.