SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 138
As Amended by Senate Committee on
Assessment and Taxation
Brief*
SB 138, as amended, would modify the property tax
exemption for Strother Field airport property, repeal state
building fund mill levies and create transfers to the funds, and
increase the residential property tax exemption from the
statewide school finance mill levy.
Strother Field Airport Property Tax Exemption
The bill would modify the property tax exemption for
Strother Field airport to replace the condition to qualify for the
exemption from being property owned by the airport
commission on and before January 1, 1992, with a condition
requiring the property to be owned by the airport commission
or the political subdivisions comprising the airport commission
and depicted on the airport’s federally approved airport layout
plan, whether such property is used for aviation related
purposes, to promote aviation commerce, or to provide
revenue to operate all Strother Field components and
activities.
The bill would stipulate that any property taxes on such
property for all tax years commencing prior to January 1,
2023, are declared canceled, but would specify that any
amount paid for such property taxes would not be refunded.
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*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org State Building Fund Mill Levies and Transfers
The bill would eliminate, beginning in tax year 2024,
the statewide mill levies of 1.0 mills for state educational
buildings and 0.5 mills for state institutions buildings and
would create, beginning in fiscal year 2025, revenue transfers
from the State General Fund to the Kansas Educational
Building Fund (EBF) and to the State Institutions Building
Fund (SIBF).
The transfer amounts would be set at $41.8 million to
the EBF and $20.9 million to the SIBF in fiscal year 2025 and
would be scheduled to increase by 2.0 percent in each future
year.
School Finance Levy Residential Exemption
The bill would increase, beginning in tax year 2023,
the amount of residential property exempt from the statewide
uniform 20 mill school finance levy from $40,000 to $65,000
of appraised value.
A formula to increase the amount of the exemption
based upon the statewide average increase in residential
valuation over the preceding ten years would be delayed in
implementation from tax year 2023 to 2024.
Background
The Senate Committee on Assessment and Taxation
inserted the contents of SB 94 and SB 97 into SB 138 while
retaining the contents of SB 138. Background information for
each bill may be found below.
2- 138 SB 94 (State Building Fund Mill Levies and Transfers)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Peck.
Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony
was provided by Senator Peck, stating the bill would provide
property tax relief for all Kansas property owners and replace
revenue to building funds with State General Fund (SGF)
transfers. Written-only proponent testimony was provided by
a representative of the Kansas Association of Realtors.
Opponent testimony was provided by a representative
of the State Board of Regents, stating the bill would reduce
the stability and certainty of the revenue for the EBF, and the
transfer amounts would not replace all lost tax revenue.
Written-only opponent testimony was provided by
representatives of the American Council of Engineering
Companies of Kansas, Associated General Contractors of
Kansas, and University Contractors Association of Kansas.
SB 97 (School Finance Levy Residential Exemption)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Peck.
Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony
was provided by Senator Peck, who generally stated the bill
would provide widely applicable property tax relief to Kansas
homeowners. Written-only proponent testimony was provided
by representatives of the Kansas Association of Realtors and
Kansas Policy Institute.
3- 138 Neutral testimony was provided by a representative of
United School Administrators of Kansas. Written-only neutral
testimony was provided by representatives of the Kansas
Association of School Boards and United School
Administrators.
SB 138 (Strother Field Airport Property Tax Exemption)
The bill was introduced by the Senate Committee on
Assessment and Taxation at the request of Senator Alley.
Senate Committee on Assessment and Taxation
In the Senate Committee hearing, proponent testimony
was provided by a representative of Strother Field Airport and
a private citizen. Testimony stated that the bill would clarify
that Arkansas City and Winfield receive the exemption for
Strother Field.
No other testimony was provided.
Fiscal Information
The fiscal information for each bill may be found below.
SB 94 (State Building Fund Mill Levies and Transfers)
According to the fiscal note prepared by the Division of
the Budget on the bill, the Department of Revenue estimates
enactment of the bill would reduce property and motor vehicle
taxes by $77.1 million in FY 2025, $80.9 million in FY 2026,
and $85.0 million in FY 2027.
The estimated increase in transfers out of the SGF
would be $62.7 million in FY 2025, $64.0 million in FY 2026,
and $65.2 million in FY 2027.
4- 138 The estimated net loss of revenue to the EBF would be
$9.6 million in FY 2025, $11.3 million in FY 2026, and $13.2
million in FY 2027. The estimated net loss of revenue to the
SIBF would be $4.8 million in FY 2025, $5.7 million in FY
2026, and $6.6 million in FY 2027.
Any fiscal effect associated with the bill is not reflected
in The FY 2024 Governor’s Budget Report.
SB 97 (School Finance Levy Residential Exemption)
According to the fiscal note prepared by the Division of
the Budget on the bill, the Department of Revenue indicates
enactment of the bill would decrease revenues from the 20
mill school finance levy by $55.6 million in FY 2024, $58.8
million in FY 2025, and $62.3 million in FY 2026. Reduced
receipts attributable to this levy would result in commensurate
increased required State General Fund expenditures for
school finance.
Any fiscal effect associated with the bill is not reflected
in The FY 2024 Governor’s Budget Report.
SB 138 (Strother Field Airport Property Tax Exemption)
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department of
Revenue indicates enactment of the bill would reduce state
property taxes by a negligible amount.
The Kansas Association of Counties indicates
enactment of the bill would reduce local property taxes by an
indeterminate amount. Any fiscal effect associated with the
bill is not reflected in The FY 2024 Governor’s Budget Report.
Taxation; property tax; mill levies; state building funds; transfers; school finance;
homestead; exemption; Strother Field; airport
5- 138