[As Amended by House on Final Action]

As Amended by House Committee
Session of 1999
Representatives Jennison and Franklin, Adkins, Aurand, Ballou, Boston,
                Dreher, Farmer, Flower, Freeborn, Geringer, Glasscock, Hayzlett,
                Horst, Humerickhouse, Hutchins, Jenkins, Johnson, Krehbiel, Lane,
                Light, Lightner, Lloyd, Loyd, McCreary, Neufeld, O'Neal, Osborne,
                J. Peterson, Schwartz, Shultz, Tanner, Toplikar, Vickrey, Vining and

16             AN  ACT concerning property exempt from taxation; amending K.S.A.
17             79-201 and 79-5a01 and repealing the existing sections.
19       Be it enacted by the Legislature of the State of Kansas:
20             Section  1. K.S.A. 79-201 is hereby amended to read as follows: 79-
21       201. The following described property, to the extent herein specified,
22       shall be and is hereby exempt from all property or ad valorem taxes levied
23       under the laws of the state of Kansas:
24             First. All buildings used exclusively as places of public worship and all
25       buildings used exclusively by school districts and school district interlocal
26       cooperatives organized under the laws of this state, with the furniture and
27       books therein contained and used exclusively for the accommodation of
28       religious meetings or for school district or school district interlocal co-
29       operative purposes, whichever is applicable, together with the grounds
30       owned thereby if not leased or otherwise used for the realization of profit,
31       except that: (a) (1) Any school building, or portion thereof, together with
32       the grounds upon which the building is located, shall be considered to be
33       used exclusively by the school district for the purposes of this section
34       when leased by the school district to any political or taxing subdivision of
35       the state, including a school district interlocal cooperative, or to any as-
36       sociation, organization or nonprofit corporation entitled to tax exemption
37       with respect to such property; and (2) any school building, together with
38       the grounds upon which the building is located, shall be considered to be
39       used exclusively by a school district interlocal cooperative for the purposes
40       of this section when being acquired pursuant to a lease-purchase agree-
41       ment; and (b) any building, or portion thereof, used as a place of worship,
42       together with the grounds upon which the building is located, shall be

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  1       considered to be used exclusively for the religious purposes of this section
  2       when used as a not-for-profit day care center for children which is li-
  3       censed pursuant to K.S.A. 65-501 et seq., and amendments thereto, or
  4       when used to house an area where the congregation of a church society
  5       and others may purchase tracts, books and other items relating to the
  6       promulgation of the church society's religious doctrines.
  7             Second. All real property, and all tangible personal property, actually
  8       and regularly used exclusively for literary, educational, scientific, relig-
  9       ious, benevolent or charitable purposes, including property used exclu-
10       sively for such purposes by more than one agency or organization for one
11       or more of such exempt purposes. Except with regard to real property
12       which is owned by a religious organization, is to be used exclusively for
13       religious purposes and is not used for a nonexempt purpose prior to its
14       exclusive use for religious purposes which property shall be deemed to
15       be actually and regularly used exclusively for religious purposes for the
16       purposes of this paragraph, this exemption shall not apply to such prop-
17       erty, not actually used or occupied for the purposes set forth herein, nor
18       to such property held or used as an investment even though the income
19       or rentals received therefrom is used wholly for such literary, educational,
20       scientific, religious, benevolent or charitable purposes. In the event any
21       such property which has been exempted pursuant to the preceding sen-
22       tence is not used for religious purposes prior to its conveyance which
23       results in its use for nonreligious purposes, there shall be a recoupment
24       of property taxes in an amount equal to the tax which would have been
25       levied upon such property except for such exemption for all taxable years
26       for which such exemption was in effect. Such recoupment tax shall be-
27       come due and payable in such year as provided by K.S.A. 79-2004, and
28       amendments thereto. A lien for such taxes shall attach to the real property
29       subject to the same on November 1 in the year such taxes become due
30       and all such taxes remaining due and unpaid after the date prescribed for
31       the payment thereof shall be collected in the manner provided by law for
32       the collection of delinquent taxes. Moneys collected from the recoupment
33       tax hereunder shall be credited by the county treasurer to the several
34       taxing subdivisions within which such real property is located in the pro-
35       portion that the total tangible property tax levies made in the preceding
36       year for each such taxing subdivision bear to the total of all such levies
37       made in that year by all such taxing subdivisions. Such moneys shall be
38       credited to the general fund of the taxing subdivision or if such taxing
39       subdivision is making no property tax levy for the support of a general
40       fund such moneys may be credited to any other tangible property tax
41       fund of general application of such subdivision. This exemption shall not
42       be deemed inapplicable to property which would otherwise be exempt
43       pursuant to this paragraph because an agency or organization: (a) Is re-

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  1       imbursed for the provision of services accomplishing the purposes enu-
  2       merated in this paragraph based upon the ability to pay by the recipient
  3       of such services; or (b) is reimbursed for the actual expense of using such
  4       property for purposes enumerated in this paragraph; or (c) uses such
  5       property for a nonexempt purpose which is minimal in scope and insub-
  6       stantial in nature if such use is incidental to the exempt purposes of this
  7       paragraph; or (d) charges a reasonable fee for admission to cultural or
  8       educational activities or permits the use of its property for such activities
  9       by a related agency or organization, if any such activity is in furtherance
10       of the purposes of this paragraph.
11             Third. All moneys and credits belonging exclusively to universities, col-
12       leges, academies or other public schools of any kind, or to religious, lit-
13       erary, scientific or benevolent and charitable institutions or associations,
14       appropriated solely to sustain such institutions or associations, not ex-
15       ceeding in amount or in income arising therefrom the limit prescribed
16       by the charter of such institution or association.
17             Fourth. The reserve or emergency funds of fraternal benefit societies
18       authorized to do business under the laws of the state of Kansas.
19             Fifth. All buildings of private nonprofit universities or colleges which
20       are owned and operated by such universities and colleges as student union
21       buildings, presidents' homes and student dormitories.
22             Sixth. All real and tangible personal property actually and regularly
23       used exclusively by the alumni association associated by its articles of
24       incorporation with any public or nonprofit Kansas college or university
25       approved by the Kansas board of regents to confer academic degrees or
26       with any community college approved by its board of trustees to grant
27       certificates of completion of courses or curriculum, to provide accom-
28       modations and services to such college or university or to the alumni, staff
29       or faculty thereof.
30             Seventh. All parsonages owned by a church society and actually and
31       regularly occupied and used predominantly as a residence by a minister
32       or other clergyman of such church society who is actually and regularly
33       engaged in conducting the services and religious ministrations of such
34       society, and the land upon which such parsonage is located to the extent
35       necessary for the accommodation of such parsonage.
36             Eighth. All real property, all buildings located on such property and all
37       personal property contained therein, actually and regularly used exclu-
38       sively by any individually chartered organization of honorably discharged
39       military veterans of the United States armed forces or auxiliary of any
40       such organization, which is exempt from federal income taxation pursuant
41       to section 501(c)(19) of the federal internal revenue code of 1986, for
42       clubhouse, place of meeting or memorial hall purposes, and real property
43       to the extent of not more than two acres, and all buildings located on

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  1       such property, actually and regularly used exclusively by any such veter-
  2       ans' organization or its auxiliary as a memorial park.
  3             Ninth. All real property and tangible personal property actually and
  4       regularly used by a community service organization for the predominant
  5       purpose of providing humanitarian services, which is owned and operated
  6       by a corporation organized not for profit under the laws of the state of
  7       Kansas or by a corporation organized not for profit under the laws of
  8       another state and duly admitted to engage in business in this state as a
  9       foreign not-for-profit corporation if: (a) The directors of such corporation
10       serve without pay for such services; (b) the corporation is operated in a
11       manner which does not result in the accrual of distributable profits, re-
12       alization of private gain resulting from the payment of compensation in
13       excess of a reasonable allowance for salary or other compensation for
14       services rendered or the realization of any other form of private gain; (c)
15       no officer, director or member of such corporation has any pecuniary
16       interest in the property for which exemption is claimed; (d) the corpo-
17       ration is organized for the purpose of providing humanitarian services;
18       (e) the actual use of property for which an exemption is claimed must be
19       substantially and predominantly related to the purpose of providing hu-
20       manitarian services, except that, the use of such property for a nonexempt
21       purpose which is minimal in scope and insubstantial in nature shall not
22       result in the loss of exemption if such use is incidental to the purpose of
23       providing humanitarian services by the corporation; (f) the corporation is
24       exempt from federal income taxation pursuant to section 501(c)(3) of the
25       internal revenue code of 1986 and; (g) contributions to the corporation
26       are deductible under the Kansas income tax act. As used in this clause,
27       "humanitarian services" means the conduct of activities which substan-
28       tially and predominantly meet a demonstrated community need and
29       which improve the physical, mental, social, cultural or spiritual welfare of
30       others or the relief, comfort or assistance of persons in distress or any
31       combination thereof including but not limited to health and recreation
32       services, child care, individual and family counseling, employment and
33       training programs for handicapped persons and meals or feeding pro-
34       grams. Notwithstanding any other provision of this clause, motor vehicles
35       shall not be exempt hereunder unless such vehicles are exclusively used
36       for the purposes described therein.
37             Tenth. For all taxable years commencing after December 31, 1986, any
38       building, and the land upon which such building is located to the extent
39       necessary for the accommodation of such building, owned by a church or
40       nonprofit religious society or order which is exempt from federal income
41       taxation pursuant to section 501(c)(3) of the federal internal revenue code
42       of 1986, and actually and regularly occupied and used exclusively for
43       residential and religious purposes by a community of persons who are

HB 2438--Am. on FA


  1       bound by vows to a religious life and who conduct or assist in the conduct
  2       of religious services and actually and regularly engage in religious, be-
  3       nevolent, charitable or educational ministrations or the performance of
  4       health care services.
  5             Eleventh. For all taxable years commencing after December 31, 1998,
  6       all real property which is subject to valuation under K.S.A. 79-5a01 et
  7       seq., and amendments thereto, and upon which is located facilities which
  8       utilize renewable energy resources or technologies for the purpose and
  9       as the primary means to produce and generate electricity and which is
10       used predominantly for such purpose, to the extent necessary to
11       accommodate such facilities, and all tangible personal property which
12       is subject to valuation under K.S.A. 79-5a01 et seq., and amendments
13       thereto, and which comprises such facilities. For purposes of this section,
14       "renewable energy resources or technologies" shall include wind, solar,
15       thermal, photovoltaic, biomass, hydropower, geothermal and landfill gas
16       resources or technologies. For purposes of valuation of property subject
17       to valuation under K.S.A. 79-5a01 et seq., and amendments thereto, the
18       value of the exempt property set forth in this clause shall be removed from
19       the unit value prior to apportionment under K.S.A. 79-5a25, and amend-
20       ments thereto.
21             The provisions of this section, except as otherwise more specifically
22       provided, shall apply to all taxable years commencing after December 31,
23       1995.
24             Sec.  2. K.S.A. 79-5a01 is hereby amended to read as follows: 79-
25       5a01. (a) As used in this act, the terms "public utility" or "public utilities"
26       shall mean every individual, company, corporation, association of persons,
27       lessees or receivers that now or hereafter are in control, manage or op-
28       erate a business of:
29             (1) A railroad or railroad corporation if such railroad or railroad cor-
30       poration owns or holds, by deed or other instrument, an interest in right-
31       of-way, track, franchise, roadbed or trackage in this state;
32             (2) transmitting to, from, through or in this state telegraphic
33       messages;
34             (3) transmitting to, from, through or in this state telephonic messages;
35             (4) transporting or distributing to, from, through or in this state nat-
36       ural gas, oil or other commodities in pipes or pipelines, or engaging pri-
37       marily in the business of storing natural gas in an underground formation;
38             (5) generating, conducting or distributing to, from, through or in this
39       state electric power, except for private use;
40             (6) transmitting to, from, through or in this state water if for profit
41       or subject to regulation of the state corporation commission;
42             (7) transporting to, from, through or in this state cargo or passengers
43       by means of any vessel or boat used in navigating any of the navigable

HB 2438--Am. on FA


  1       watercourses within or bordering upon this state.
  2             (b) The terms "public utility" or "public utilities" shall not include:
  3       (1) Rural water districts established under the laws of the state of Kansas;
  4       or (2) any individual, company, corporation, association of persons, lessee
  5       or receiver owning or operating an oil or natural gas production gathering
  6       line which is situated within one county in this state and does not cross
  7       any state boundary line; or (3) any individual, company, corporation, as-
  8       sociation of persons, lessee or receiver owning any vessel or boat operated
  9       upon the surface of any manmade waterway located entirely within one
10       county in the state. 
11       Sec.  3. K.S.A. 79-201 and 79-5a01 are hereby repealed.
12        Sec.  4. This act shall take effect and be in force from and after its
13       publication in the statute book.