Kansas 2024 1st Special Session

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1	1	Special Session of 2024
2	2	SENATE BILL No. 1
3	3	AN ACT concerning taxation; relating to income tax; modifying tax rates for individuals;
4	4	eliminating the income limit to qualify for a subtraction modification for social
5	5	security income; increasing the Kansas standard deduction and the Kansas personal
6	6	exemption; increasing the tax credit amount for household and dependent care
7	7	expenses; relating to privilege tax; decreasing the normal tax rate; relating to property
8	8	tax; excluding internal revenue code section 1031 exchange transactions as indicators
9	9	of fair market value; increasing the extent of exemption for residential property from
10	10	the statewide school levy; providing for certain transfers to the state school district
11	11	finance fund; abolishing the local ad valorem tax reduction fund and the county and
12	12	city revenue sharing fund; amending K.S.A. 65-163j, 65-3306, 65-3327, 75-2556, 79-
13	13	503a, 79-5a27, 79-1107, 79-1108, 79-1479 and 79-32,111c and K.S.A. 2023 Supp.
14	14	74-8768, 79-201x, 79-2988, as amended by section 15 of 2024 Senate Bill No. 410,
15	15	79-32,110, 79-32,117, as amended by section 14 of 2023 Senate Bill No. 27, 79-
16	16	32,119 and 79-32,121 and repealing the existing sections; also repealing K.S.A. 19-
17	17	2694, 79-2960, 79-2961, 79-2962, 79-2965, 79-2966 and 79-2967 and K.S.A. 2023
18	18	Supp. 79-2959, as amended by section 189 of 2023 Senate Bill No. 28, and 79-2964,
19	19	as amended by section 190 of 2023 Senate Bill No. 28.
20	20	Be it enacted by the Legislature of the State of Kansas:
21	21	New Section 1. On July 1, 2024, the director of accounts and
22	22	reports shall transfer all moneys in the local ad valorem tax reduction
23	23	fund to the state general fund. On July 1, 2024, all liabilities of the
24	24	local ad valorem tax reduction fund are hereby transferred to and
25	25	imposed on the state general fund, and the local ad valorem tax
26	26	reduction fund is hereby abolished.
27	27	New Sec. 2. On July 1, 2024, the director of accounts and reports
28	28	shall transfer all moneys in the county and city revenue sharing fund to
29	29	the state general fund. On July 1, 2024, all liabilities of the county and
30	30	city revenue sharing fund are hereby transferred to and imposed on the
31	31	state general fund, and the county and city revenue sharing fund is
32	32	hereby abolished.
33	33	New Sec. 3. On August 15, 2024, and each August 15 thereafter,
34	34	the director of the budget, in consultation with the director of property
35	35	valuation, shall certify to the director of accounts and reports if the
36	36	exemption provided by K.S.A. 79-201x, and amendments thereto, is
37	37	increased from $42,049 for any tax year. The director of the budget
38	38	shall certify to the director of accounts and reports and shall transfer a
39	39	copy of such certification to the director of legislative research the
40	40	amount of revenue that the increase in the exemption provided by
41	41	K.S.A. 79-201x, and amendments thereto, would have generated for the
42	42	tax year if the exemption amount was $42,049. Upon receipt of such
43	43	certification, or as soon thereafter as moneys are available, the director
44	44	of accounts and reports shall transfer such certified amount from the
45	45	state general fund to the state school district finance fund of the
46	46	department of education.
47	47	Sec. 4. K.S.A. 65-163j is hereby amended to read as follows: 65-
48	48	163j. (a) The dedicated source of revenue for repayment of a loan to a
49	49	municipality may include service charges, connection fees, special
50	50	assessments, property taxes, grants or any other source of revenue
51	51	lawfully available to the municipality for such purpose. In order to
52	52	ensure repayment by municipalities of the amounts of loans provided
53	53	under this act, the secretary, after consultation with the governing body
54	54	of any municipality which that receives a loan, may adopt charges to be
55	55	levied against individuals and entities served by the project. Any such
56	56	charges shall remain in effect until the total amount of the loan, and any
57	57	interest thereon, has been repaid. The charges shall, insofar as is
58	58	practicable, be equitably assessed and may be in the form of a
59	59	surcharge to the existing charges of the municipality. The governing
60	60	body of any municipality which that receives a loan under this act shall
61	61	collect any charges established by the secretary and shall pay the
62	62	moneys collected therefrom to the secretary in accordance with
63	63	procedures established by the secretary. SENATE BILL No. 1—page 2
64	64	(b) Upon the failure of a municipality to meet the repayment terms
65	65	and conditions of the agreement, the secretary may order the treasurer
66	66	of the county in which the municipality is located to pay to the
67	67	secretary such portion of the municipality's share of the local ad
68	68	valorem tax reduction fund as may be necessary to meet the terms of
69	69	the agreement, notwithstanding the provisions of K.S.A. 79-2960 and
70	70	79-2961, and amendments thereto. Upon the issuance of such an order,
71	71	the municipality shall not be required to make the tax levy reductions
72	72	otherwise required by K.S.A. 79-2960 and 79-2961, and amendments
73	73	thereto.
74	74	(c) Municipalities which that are provided with loans under this
75	75	act shall maintain project accounts in accordance with generally
76	76	accepted government accounting standards.
77	77	(d)(c) Any loans received by a municipality under the provisions
78	78	of this act shall be construed to be bonds for the purposes of K.S.A. 10-
79	79	1116 and 79-5028, and amendments thereto, and the amount of such
80	80	loans shall not be included within any limitation on the bonded
81	81	indebtedness of the municipality.
82	82	Sec. 5. K.S.A. 65-3306 is hereby amended to read as follows: 65-
83	83	3306. The secretary's annual request for appropriations to the water
84	84	pollution control account shall be based on an estimate of the fiscal
85	85	needs for the ensuing budget year, less any amounts received by the
86	86	secretary from any public or private grants or contributions and moneys
87	87	in such account shall be used solely for the purposes provided for by
88	88	this act. Moneys allocated to a municipality shall be encumbered as an
89	89	expenditure of this account upon the formal letting of a contract for the
90	90	improvement notwithstanding the date on which when actual payment
91	91	is made of the state financial assistance. Any municipality may
92	92	contribute moneys to the state water pollution control account. If there
93	93	are no uncommitted or unencumbered moneys in the water pollution
94	94	control account, any municipality applying for any water pollution
95	95	control project as defined in K.S.A. 65-3302, and amendments thereto,
96	96	shall as a condition of such application certify in writing to the
97	97	secretary that a contribution in the amount of twenty-five percent
98	98	(25%) of the eligible cost of such project will be made to the water
99	99	pollution control account by such municipality prior to formal letting of
100	100	a construction contract. Upon receipt by the secretary, each such
101	101	contribution shall be retained in a subaccount of the water pollution
102	102	control account for use solely in the project for which the municipality
103	103	has made application.
104	104	Notwithstanding the provisions of K.S.A. 79-2960 and 79-2961, any
105	105	municipality applying for such a water pollution control project may
106	106	make such contribution from all or such part of its share of the local ad
107	107	valorem tax reduction fund as may be necessary for such purpose, and
108	108	to the extent such fund is pledged and used for such purpose the
109	109	municipality shall not be required to make the tax levy reductions
110	110	otherwise required by K.S.A. 79-2960 and 79-2961. Taxes levied by
111	111	any municipality by reason of its failure to make such reduction in its
112	112	levies shall not be subject to or be considered in computing the
113	113	aggregate limitation upon the levy of taxes by such municipality under
114	114	the provisions of K.S.A. 79-5003.
115	115	Sec. 6. K.S.A. 65-3327 is hereby amended to read as follows: 65-
116	116	3327. (a) The dedicated source of revenue for repayment of the loans
117	117	may include service charges, connection fees, special assessments,
118	118	property taxes, grants or any other source of revenue lawfully available
119	119	to the municipality for such purpose. In order to ensure repayment by
120	120	municipalities of the amounts of loans provided under K.S.A. 65-3321
121	121	through 65-3329, and amendments thereto, the secretary, after
122	122	consultation with the governing body of any municipality which SENATE BILL No. 1—page 3
123	123	receives a loan, may adopt charges to be levied against users of the
124	124	project. Any such charges shall remain in effect until the total amount
125	125	of the loan, and any interest thereon, has been repaid. The charges shall,
126	126	insofar as is practicable, be equitably assessed and may be in the form
127	127	of a surcharge to the existing charges of the municipality. The
128	128	governing body of any municipality which receives a loan under
129	129	K.S.A. 65-3321 through 65-3329, and amendments thereto, shall
130	130	collect any charges established by the secretary and shall pay the
131	131	moneys collected therefrom to the secretary in accordance with
132	132	procedures established by the secretary.
133	133	(b) Upon the failure of a municipality to meet the repayment terms
134	134	and conditions of the agreement, the secretary may order the treasurer
135	135	of the county in which the municipality is located to pay to the
136	136	secretary such portion of the municipality's share of the local ad
137	137	valorem tax reduction fund as may be necessary to meet the terms of
138	138	the agreement, notwithstanding the provisions of K.S.A. 79-2960 and
139	139	79-2961 and amendments thereto. Upon the issuance of such an order,
140	140	the municipality shall not be required to make the tax levy reductions
141	141	otherwise required by K.S.A. 79-2960 and 79-2961 and amendments
142	142	thereto.
143	143	(c) Municipalities which that are provided with loans under
144	144	K.S.A. 65-3321 through 65-3329, and amendments thereto, shall
145	145	maintain project accounts in accordance with generally accepted
146	146	government accounting standards.
147	147	(d)(c) Municipalities which that receive a grant and an allowance
148	148	under the federal act with respect to project costs for which a loan was
149	149	provided under K.S.A. 65-3321 through 65-3329, and amendments
150	150	thereto, shall promptly repay such loan to the extent of the allowance
151	151	received under the federal act.
152	152	(e)(d) Any loans received by a municipality under the provisions
153	153	of K.S.A. 65-3321 through 65-3329, and amendments thereto, shall be
154	154	construed to be bonds for the purposes of K.S.A. 10-1116 and 79-5028,
155	155	and amendments thereto, and the amount of such loans shall not be
156	156	included within any limitation on the bonded indebtedness of the
157	157	municipality.
158	158	Sec. 7. K.S.A. 2023 Supp. 74-8768 is hereby amended to read as
159	159	follows: 74-8768. (a) There is hereby created the expanded lottery act
160	160	revenues fund in the state treasury. All expenditures and transfers from
161	161	such fund shall be made in accordance with appropriation acts. All
162	162	moneys credited to such fund shall be expended or transferred only for
163	163	the purposes of reduction of state debt, state infrastructure
164	164	improvements, the university engineering initiative act, reduction of
165	165	local ad valorem tax in the same manner as provided for allocation of
166	166	amounts in the local ad valorem tax reduction fund and reduction of the
167	167	unfunded actuarial liability of the system attributable to the state of
168	168	Kansas and participating employers under K.S.A. 74-4931, and
169	169	amendments thereto, by the Kansas public employees retirement
170	170	system.
171	171	(b) On July 1, 2021, July 1, 2022, July 1, 2023, July 1, 2024, July
172	172	1, 2025, July 1, 2026, July 1, 2027, July 1, 2028, July 1, 2029, July 1,
173	173	2030, and July 1, 2031, or as soon thereafter such date as moneys are
174	174	available, the first $10,500,000 credited to the expanded lottery act
175	175	revenues fund shall be transferred by the director of accounts and
176	176	reports from the expanded lottery act revenues fund in one or more
177	177	substantially equal amounts, to each of the following: The Kan-grow
178	178	engineering fund – KU, Kan-grow engineering fund – KSU and Kan-
179	179	grow engineering fund – WSU. Each such special revenue fund shall
180	180	receive $3,500,000 annually in each of such years. Commencing in
181	181	fiscal year 2014, after such transfer has been made, 50% of the SENATE BILL No. 1—page 4
182	182	remaining moneys credited to the fund shall be transferred on a
183	183	quarterly basis by the director of accounts and reports from the fund to
184	184	the Kansas public employees retirement system fund to be applied to
185	185	reduce the unfunded actuarial liability of the system attributable to the
186	186	state of Kansas and participating employers under K.S.A. 74-4931 et
187	187	seq., and amendments thereto, until the system as a whole attains an
188	188	80% funding ratio as certified by the board of trustees of the Kansas
189	189	public employees retirement system.
190	190	Sec. 8. K.S.A. 75-2556 is hereby amended to read as follows: 75-
191	191	2556. (a) The state librarian shall determine the amount of the grant-in-
192	192	aid each eligible local public library is to receive based on the latest
193	193	population census figures as certified by the division of the budget.
194	194	(b) Except as provided by subsection (d), no local public library
195	195	shall be eligible for any state grants-in-aid if the total amount of the
196	196	following paragraphs is less than the total amount produced from such
197	197	sources for the same library for the previous year, based on the
198	198	information contained in the official annual budgets of municipalities
199	199	that are filed with the division of accounts and reports in accordance
200	200	with K.S.A. 79-2930, and amendments thereto:
201	201	(1) The amount produced by the local ad valorem tax levies for
202	202	the current year expenses for such library;
203	203	(2) the amount of moneys received from the local ad valorem tax
204	204	reduction fund for current year expenses for such library;
205	205	(3) the amount of moneys received from taxes levied upon motor
206	206	vehicles under the provisions of K.S.A. 79-5101 et seq., and
207	207	amendments thereto, for current year expenses for such library; and
208	208	(4)(3) the amount of moneys received in the current year from
209	209	collections of unpaid local ad valorem tax levies for prior year expenses
210	210	for such library.
211	211	(c) Local public library districts in which the assessed valuation
212	212	decreases shall remain eligible for state grants-in-aid so long as the ad
213	213	valorem tax mill rate for the support of such library has not been
214	214	reduced below the mill rate imposed for such purpose for the previous
215	215	year.
216	216	(d) If a local public library fails to qualify for eligibility for any
217	217	state grants-in-aid under subsection (b), the state librarian shall have the
218	218	power to continue the eligibility of a local public library for any state
219	219	grants-in-aid if the state librarian, after evaluation of all the
220	220	circumstances, determines that the legislative intent for maintenance of
221	221	local tax levy support for the on-going operations of the library is being
222	222	met by the library district.
223	223	(e) The distribution so determined shall be apportioned and paid
224	224	on February 15 of each year.
225	225	Sec. 9. K.S.A. 2023 Supp. 79-201x is hereby amended to read as
226	226	follows: 79-201x. (a) For taxable year 2022 2024, and all taxable years
227	227	thereafter, the following described property, to the extent herein
228	228	specified, shall be and is hereby exempt from the property tax levied
229	229	pursuant to the provisions of K.S.A. 72-5142, and amendments thereto:
230	230	Property used for residential purposes to the extent of $40,000 $75,000
231	231	of its appraised valuation.
232	232	(b) For taxable year 2023, and all taxable years thereafter, the
233	233	dollar amount of the extent of appraised valuation that is exempt
234	234	pursuant to subsection (a) shall be adjusted to reflect the average
235	235	percentage change in statewide residential valuation of all residential
236	236	real property for the preceding 10 years. Such average percentage
237	237	change shall not be less than zero. The director of property valuation
238	238	shall calculate the average percentage change for purposes of this
239	239	annual adjustment and calculate the dollar amount of the extent of
240	240	appraised valuation that is exempt pursuant to this section each year. SENATE BILL No. 1—page 5
241	241	Sec. 10. K.S.A. 79-503a is hereby amended to read as follows: 79-
242	242	503a. "Fair market value" means the amount in terms of money that a
243	243	well informed buyer is justified in paying and a well informed seller is
244	244	justified in accepting for property in an open and competitive market,
245	245	assuming that the parties are acting without undue compulsion. In the
246	246	determination of fair market value of any real property which is subject
247	247	to any special assessment, such value shall not be determined by adding
248	248	the present value of the special assessment to the sales price. For the
249	249	purposes of this definition it will be assumed that consummation of a
250	250	sale occurs as of January 1.
251	251	Sales in and of themselves shall not be the sole criteria of fair
252	252	market value but shall be used in connection with cost, income and
253	253	other factors including but not by way of exclusion:
254	254	(a) The proper classification of lands and improvements;
255	255	(b) the size thereof;
256	256	(c) the effect of location on value;
257	257	(d) depreciation, including physical deterioration or functional,
258	258	economic or social obsolescence;
259	259	(e) cost of reproduction of improvements;
260	260	(f) productivity taking into account all restrictions imposed by the
261	261	state or federal government and local governing bodies, including, but
262	262	not limited to, restrictions on property rented or leased to low income
263	263	individuals and families as authorized by section 42 of the federal
264	264	internal revenue code of 1986, as amended;
265	265	(g) earning capacity as indicated by lease price, by capitalization
266	266	of net income or by absorption or sell-out period;
267	267	(h) rental or reasonable rental values or rental values restricted by
268	268	the state or federal government or local governing bodies, including,
269	269	but not limited to, restrictions on property rented or leased to low
270	270	income individuals and families, as authorized by section 42 of the
271	271	federal internal revenue code of 1986, as amended;
272	272	(i) sale value on open market with due allowance to abnormal
273	273	inflationary factors influencing such values;
274	274	(j) restrictions or requirements imposed upon the use of real estate
275	275	by the state or federal government or local governing bodies, including
276	276	zoning and planning boards or commissions, and including, but not
277	277	limited to, restrictions or requirements imposed upon the use of real
278	278	estate rented or leased to low income individuals and families, as
279	279	authorized by section 42 of the federal internal revenue code of 1986,
280	280	as amended; and
281	281	(k) comparison with values of other property of known or
282	282	recognized value. The assessment-sales ratio study shall not be used as
283	283	an appraisal for appraisal purposes.
284	284	The appraisal process utilized in the valuation of all real and
285	285	tangible personal property for ad valorem tax purposes shall conform to
286	286	generally accepted appraisal procedures and standards which are
287	287	consistent with the definition of fair market value unless otherwise
288	288	specified by law.
289	289	The sale price or value at which a property sells or transfers
290	290	ownership in a federal internal revenue code section 1031 exchange
291	291	shall not be considered an indicator of fair market value nor as a
292	292	factor in arriving at fair market value. Federal internal revenue code
293	293	section 1031 exchange transactions shall not be used as comparable
294	294	sales for valuation purposes nor as valid sales for purposes of sales
295	295	ratio studies conducted pursuant to K.S.A. 79-1485 et seq., and
296	296	amendments thereto.
297	297	Sec. 11. K.S.A. 79-5a27 is hereby amended to read as follows: 79-
298	298	5a27. On or before June 1 each year, the director of property valuation
299	299	shall certify to the county clerk of each county the amount of assessed SENATE BILL No. 1—page 6
300	300	valuation apportioned to each taxing unit therein for properties valued
301	301	and assessed under K.S.A. 79-5a01 et seq., and amendments thereto.
302	302	The county clerk shall include such assessed valuations in the
303	303	applicable taxing districts with all other assessed valuations in those
304	304	taxing districts and on or before June 15 notify the appropriate officials
305	305	of each taxing district within the county of the assessed valuation
306	306	estimates to be utilized in the preparation of budgets for ad valorem tax
307	307	purposes, except that for tax year 2024, the deadline shall be extended
308	308	to July 1, 2024. If in any year the county clerk has not received the
309	309	applicable valuations from the director of property valuation, the
310	310	county clerk shall use the applicable assessed valuations of the
311	311	preceding year as an estimate for such notification. If the public utility
312	312	has filed an application for exemption of all or a portion of its property,
313	313	the director shall notify the county clerk that the exemption application
314	314	has been filed and the county clerk shall not be required to include such
315	315	assessed valuation in the applicable taxing districts until such time as
316	316	the application is denied by the state board of tax appeals or, if judicial
317	317	review of the board's order is sought, until such time as judicial review
318	318	is finalized.
319	319	Sec. 12. K.S.A. 79-1107 is hereby amended to read as follows: 79-
320	320	1107. (a) Every national banking association and state bank located or
321	321	doing business within the state shall pay to the state for the privilege of
322	322	doing business within the state a tax according to or measured by its net
323	323	income for the next preceding taxable year to be computed as provided
324	324	in this act. Such tax shall consist of a normal tax and a surtax and shall
325	325	be computed as follows:
326	326	(a)(1) For tax year 2024, and all tax years thereafter, the normal
327	327	tax shall be an amount equal to 2
328	328	1
329	329	/4% 1.94% of such net income; and
330	330	(b)(2) the surtax shall be an amount equal to 2
331	331	1
332	332	/8% 2.125% of
333	333	such net income in excess of $25,000.
334	334	(b) The tax levied shall be in lieu of ad valorem taxes which might
335	335	otherwise be imposed by the state or political subdivisions thereof upon
336	336	shares of capital stock or the intangible assets of national banking
337	337	associations and state banks.
338	338	Sec. 13. K.S.A. 79-1108 is hereby amended to read as follows: 79-
339	339	1108. (a) Every trust company and savings and loan association located
340	340	or doing business within the state shall pay to the state for the privilege
341	341	of doing business within the state a tax according to or measured by its
342	342	net income for the next preceding taxable year to be computed as
343	343	provided in this act. Such tax shall consist of a normal tax and a surtax
344	344	and shall be computed as follows:
345	345	(a)(1) For tax year 2024, and all tax years thereafter, the normal
346	346	tax on every trust company and savings and loan association shall be an
347	347	amount equal to 2
348	348	1
349	349	/4% 1.93% of such net income; and
350	350	(b)(2) the surtax on every trust company and savings and loan
351	351	association shall be an amount equal to 2
352	352	1
353	353	/4% 2.25% of such net
354	354	income in excess of $25,000.
355	355	(b) The tax levied shall be in lieu of ad valorem taxes which might
356	356	otherwise be imposed by the state or political subdivision thereof upon
357	357	shares of capital stock or other intangible assets of trust companies and
358	358	savings and loan associations.
359	359	Sec. 14. K.S.A. 79-1479 is hereby amended to read as follows: 79-
360	360	1479. (a) On or before January 15, 1992, and quarterly thereafter, the
361	361	county or district appraiser shall submit to the director of property
362	362	valuation a progress report indicating actions taken during the
363	363	preceding quarter calendar year to implement the appraisal of property
364	364	in the county or district. Whenever the director of property valuation
365	365	shall determine that any county has failed, neglected or refused to
366	366	properly provide for the appraisal of property or the updating of the SENATE BILL No. 1—page 7
367	367	appraisals on an annual basis in substantial compliance with the
368	368	provisions of law and the guidelines and timetables prescribed by the
369	369	director, the director shall file with the state board of tax appeals a
370	370	complaint stating the facts upon which the director has made the
371	371	determination of noncompliance as provided by K.S.A. 79-1413a, and
372	372	amendments thereto. If, as a result of such proceeding, the state board
373	373	of tax appeals finds that the county is not in substantial compliance
374	374	with the provisions of law and the guidelines and timetables of the
375	375	director of property valuation providing for the appraisal of all property
376	376	in the county or the updating of the appraisals on an annual basis, it
377	377	shall order the immediate assumption of the duties of the office of
378	378	county appraiser by the director of the division of property valuation
379	379	until such time as the director of property valuation determines that the
380	380	county is in substantial compliance with the provisions of law. In
381	381	addition, the board shall order the state treasurer to withhold all or a
382	382	portion of the county's entitlement to moneys from either or both of the
383	383	local ad valorem tax reduction fund and the city and county revenue
384	384	sharing fund for the year following the year in which the order is
385	385	issued. Upon service of any such order on the board of county
386	386	commissioners, the appraiser shall immediately deliver to the director
387	387	of property valuation, or the director's designee, all books, records and
388	388	papers pertaining to the appraiser's office.
389	389	Any county for which the director of the division of property
390	390	valuation is ordered by the state board of tax appeals to assume the
391	391	responsibility and duties of the office of county appraiser shall
392	392	reimburse the state for the actual costs incurred by the director of the
393	393	division of property valuation in the assumption and carrying out of
394	394	such responsibility and duties, including any contracting costs in the
395	395	event it is necessary for the director of property valuation to contract
396	396	with private appraisal firms to carry out such responsibilities and
397	397	duties.
398	398	(b) On or before June 1 of each year, the director of property
399	399	valuation shall review the appraisal of property in each county or
400	400	district to determine if property within the county or district is being
401	401	appraised or valued in accordance with the requirements of law. If the
402	402	director determines the property in any county or district is not being
403	403	appraised in accordance with the requirements of law, the director of
404	404	property valuation shall notify the county or district appraiser and the
405	405	board of county commissioners of any county or counties affected that
406	406	the county has 30 days within which to submit to the director a plan for
407	407	bringing the appraisal of property within the county into compliance.
408	408	If a plan is submitted and approved by the director the county or
409	409	district shall proceed to implement the plan as submitted. The director
410	410	shall continue to monitor the program to insure that the plan is
411	411	implemented as submitted. If no plan is submitted or if the director
412	412	does not approve the plan, the director shall petition the state board of
413	413	tax appeals for a review of the plan or, if no plan is submitted, for
414	414	authority for the division of property valuation to assume control of the
415	415	appraisal program of the county and to proceed to bring the same into
416	416	compliance with the requirements of law.
417	417	If the state board of tax appeals approves the plan, the county or
418	418	district appraiser shall proceed to implement the plan as submitted. If
419	419	no plan has been submitted or the plan submitted is not approved, the
420	420	board shall fix a time within which the county may submit a plan or an
421	421	amended plan for approval. If no plan is submitted and approved within
422	422	the time prescribed by the board, the board shall order the division of
423	423	property valuation to assume control of the appraisal program of the
424	424	county and shall certify its order to the state treasurer who shall
425	425	withhold distributions of the county's share of moneys from the county SENATE BILL No. 1—page 8
426	426	and city revenue sharing fund and the local ad valorem tax reduction
427	427	fund and credit the same to the general fund of the state for the year
428	428	following the year in which the board's order is made. The director of
429	429	property valuation shall certify the amount of the cost incurred by the
430	430	division in bringing the program in compliance to the state board of tax
431	431	appeals. The board shall order the county commissioners to reimburse
432	432	the state for such costs.
433	433	(c) The state board of tax appeals shall within 60 days after the
434	434	publication of the Kansas assessment/sales ratio study review such
435	435	publication to determine county compliance with K.S.A. 79-1439, and
436	436	amendments thereto. If in the determination of the board one or more
437	437	counties are not in substantial compliance and the director of property
438	438	valuation has not acted under subsection (b), the board shall order the
439	439	director of property valuation to take such corrective action as is
440	440	necessary or to show cause for noncompliance.
441	441	Sec. 15. On and after July 1, 2024, K.S.A. 2023 Supp. 79-2988, as
442	442	amended by section 15 of 2024 Senate Bill No. 410, is hereby amended
443	443	to read as follows: 79-2988. (a) On or before June 15 each year, the
444	444	county clerk shall calculate the revenue neutral rate for each taxing
445	445	subdivision and include such revenue neutral rate on the notice of the
446	446	estimated assessed valuation provided to each taxing subdivision for
447	447	budget purposes, except that for tax year 2024, the deadline shall be
448	448	extended to July 1, 2024. The director of accounts and reports shall
449	449	modify the prescribed budget information form to show the revenue
450	450	neutral rate.
451	451	(b) Except as otherwise provided in this section, no tax rate in
452	452	excess of the revenue neutral rate shall be levied by the governing body
453	453	of any taxing subdivision unless a resolution or ordinance has been
454	454	approved by the governing body according to the following procedure:
455	455	(1) At least 10 days in advance of the public hearing, the
456	456	governing body shall publish notice of its proposed intent to exceed the
457	457	revenue neutral rate by publishing notice:
458	458	(A) On the website of the governing body, if the governing body
459	459	maintains a website; and
460	460	(B) in a weekly or daily newspaper of the county having a general
461	461	circulation therein. The notice shall include, but not be limited to, its
462	462	proposed tax rate, its revenue neutral rate and the date, time and
463	463	location of the public hearing.
464	464	(2) On or before July 20, the governing body shall notify the
465	465	county clerk of its proposed intent to exceed the revenue neutral rate
466	466	and provide the date, time and location of the public hearing and its
467	467	proposed tax rate. For all tax years commencing after December 31,
468	468	2021, the county clerk shall notify each taxpayer with property in the
469	469	taxing subdivision, by mail directed to the taxpayer's last known
470	470	address, of the proposed intent to exceed the revenue neutral rate at
471	471	least 10 days in advance of the public hearing. Alternatively, the county
472	472	clerk may transmit the notice to the taxpayer by electronic means at
473	473	least 10 days in advance of the public hearing, if such taxpayer and
474	474	county clerk have consented in writing to service by electronic means.
475	475	The county clerk is not required to send a notice to a property owner of
476	476	property that is exempt from ad valorem taxation. The county clerk
477	477	shall consolidate the required information for all taxing subdivisions
478	478	relevant to the taxpayer's property on one notice. The notice shall be in
479	479	a format prescribed by the director of accounts and reports. The notice
480	480	shall include, but not be limited to:
481	481	(A) The following heading:
482	482	"NOTICE OF PROPOSED PROPERTY TAX INCREASE AND
483	483	PUBLIC HEARINGS
484	484	[Current year] [County name] County Revenue Neutral Rate Notice SENATE BILL No. 1—page 9
485	485	This is NOT a bill. Do not remit payment.";
486	486	(B) the following statement:
487	487	"This notice contains estimates of the tax on your property and
488	488	proposed property tax increases. THE ACTUAL TAX ON YOUR
489	489	PROPERTY MAY INCREASE OR DECREASE FROM THESE
490	490	ESTIMATES. Governing bodies of taxing subdivisions must vote in
491	491	order to exceed the Revenue Neutral Rate to increase the total property
492	492	taxes collected. Governing bodies will vote at public hearings at the
493	493	dates, times and locations listed. Taxpayers may attend and comment at
494	494	the hearings. Property tax statements will be issued after mill rates are
495	495	finalized and taxes are calculated.";
496	496	(C) the appraised value and assessed value of the taxpayer's
497	497	property for the current year and the previous year;
498	498	(D) the amount of property tax of each taxing subdivision on the
499	499	taxpayer's property from the previous year's tax statement in a column
500	500	titled: "[Previous year] Tax";
501	501	(E) the estimated amount of property tax for the current year of
502	502	each taxing subdivision on the taxpayer's property based on the revenue
503	503	neutral rate of each taxing subdivision in a column titled: "[Current
504	504	year] Tax at Revenue Neutral Rate";
505	505	(F) the estimated amount of property tax for the current year of
506	506	each taxing subdivision on the taxpayer's property based on either: (i)
507	507	The revenue neutral rate for a taxing subdivision that does not intend to
508	508	exceed its revenue neutral rate; or (ii) the proposed tax rate provided by
509	509	the taxing subdivision, if the taxing subdivision notified the county
510	510	clerk of its proposed intent to exceed its revenue neutral rate in a
511	511	column titled: "[Current year] Maximum Tax";
512	512	(G) the difference between the amount of the current year's
513	513	maximum tax and the previous year's tax, reflected in dollars and a
514	514	percentage, for each taxing subdivision in a column titled: "[Current
515	515	year] Maximum Tax Exceeding [Previous year] Tax";
516	516	(H) the date, time and location of the public hearing of each taxing
517	517	subdivision that notified the county clerk of its proposed intent to
518	518	exceed its revenue neutral rate in a column titled: "Date, Time and
519	519	Location of Public Hearing"; and
520	520	(I) for each taxing subdivision public hearing listed pursuant to
521	521	subparagraph (H), the difference between the current year's maximum
522	522	tax and the estimated amount of property tax based on the revenue
523	523	neutral rate of such taxing subdivision in a column titled: "[Current
524	524	year] Maximum Tax Exceeding Tax at Revenue Neutral Rate".
525	525	Although the state of Kansas is not a taxing subdivision for
526	526	purposes of this section, the notice shall include the previous year's tax
527	527	amount and the estimate of the tax for the current year on the taxpayer's
528	528	property based on the statutory mill levies.
529	529	(3) The public hearing to consider exceeding the revenue neutral
530	530	rate shall be held not sooner than August 20 and not later than
531	531	September 20. The governing body shall provide interested taxpayers
532	532	desiring to be heard an opportunity to present oral testimony within
533	533	reasonable time limits and without unreasonable restriction on the
534	534	number of individuals allowed to make public comment. The public
535	535	hearing may be conducted in conjunction with the proposed budget
536	536	hearing pursuant to K.S.A. 79-2929, and amendments thereto, if the
537	537	governing body otherwise complies with all requirements of this
538	538	section. Nothing in this section shall be construed to prohibit additional
539	539	public hearings that provide additional opportunities to present
540	540	testimony or public comment prior to the public hearing required by
541	541	this section.
542	542	(4) A majority vote of the governing body, by the adoption of a
543	543	resolution or ordinance to approve exceeding the revenue neutral rate, SENATE BILL No. 1—page 10
544	544	shall be required prior to adoption of a proposed budget that will result
545	545	in a tax rate in excess of the revenue neutral rate. Such vote of the
546	546	governing body shall be conducted at the public hearing and on the
547	547	same day as the commencement of the public hearing after the
548	548	governing body has heard from interested taxpayers and shall be a roll
549	549	call vote. If the governing body approves exceeding the revenue neutral
550	550	rate, the governing body shall not adopt a budget that results in a tax
551	551	rate in excess of its proposed tax rate as stated in the notice provided
552	552	pursuant to this section. A copy of the resolution or ordinance to
553	553	approve exceeding the revenue neutral rate and a certified copy of any
554	554	roll call vote reporting, at a minimum, the name and vote of each
555	555	member of the governing body related to exceeding the revenue neutral
556	556	rate, whether approved or not, shall be included with the adopted
557	557	budget, budget certificate and other budget forms filed with the county
558	558	clerk and the director of accounts and reports and shall be published on
559	559	the website of the department of administration.
560	560	(c) (1) Any governing body subject to the provisions of this
561	561	section that does not comply with subsection (b) shall refund to
562	562	taxpayers any property taxes over-collected based on the amount of the
563	563	levy that was in excess of the revenue neutral rate.
564	564	(2) Any taxpayer of the taxing subdivision that is the subject of
565	565	the complaint or such taxpayer's duly authorized representative may
566	566	file a complaint with the state board of tax appeals by filing a written
567	567	complaint, on a form prescribed by the board, that contains the facts
568	568	that the complaining party believes show that a governing body of a
569	569	taxing subdivision did not comply with the provisions of subsection (b)
570	570	and that a reduction or refund of taxes is appropriate. The complaining
571	571	party shall provide a copy of such complaint to the governing body of
572	572	the taxing subdivision making the levy that is the subject of the
573	573	complaint. Notwithstanding K.S.A. 74-2438a, and amendments thereto,
574	574	no filing fee shall be charged by the executive director of the state
575	575	board of tax appeals for a complaint filed pursuant to this paragraph.
576	576	The governing body of the taxing subdivision making the levy that is
577	577	the subject of the complaint shall be a party to the proceeding. Notice
578	578	of any summary proceeding or hearing shall be served upon such
579	579	governing body, the county clerk, the director of accounts and reports
580	580	and the complaining party. It shall be the duty of the governing body to
581	581	initiate the production of evidence to demonstrate, by a preponderance
582	582	of the evidence, the validity of such levy. If upon a summary
583	583	proceeding or hearing, it shall be made to appear to the satisfaction of
584	584	the board that the governing body of the taxing subdivision did not
585	585	comply with subsection (b), the state board of tax appeals shall order
586	586	such governing body to refund to taxpayers the amount of property
587	587	taxes over collected or reduce the taxes levied, if uncollected. The
588	588	provisions of this paragraph shall not be construed as prohibiting any
589	589	other remedies available under the law.
590	590	(d) On and after January 1, 2022, in the event that the 20 mills tax
591	591	levied by a school district pursuant to K.S.A. 72-5142, and
592	592	amendments thereto, increases the property tax revenue generated for
593	593	the purpose of calculating the revenue neutral rate from the previous
594	594	tax year and such amount of increase in revenue generated from the 20
595	595	mills such tax levied is the only reason that the school district would
596	596	exceed the total property tax revenue from the prior year, the school
597	597	district shall be deemed to not have exceeded the revenue neutral rate
598	598	in levying a tax rate in excess of the revenue neutral rate to take into
599	599	account the increase in revenue from only the 20 mills such tax levied.
600	600	(e) (1) Notwithstanding any other provision of law to the contrary,
601	601	if the governing body of a taxing subdivision must conduct a public
602	602	hearing to approve exceeding the revenue neutral rate under this SENATE BILL No. 1—page 11
603	603	section, the governing body of the taxing subdivision shall certify, on or
604	604	before October 1, to the proper county clerk the amount of ad valorem
605	605	tax to be levied.
606	606	(2) If a governing body of a taxing subdivision did not comply
607	607	with the provisions of subsection (b) and certifies to the county clerk an
608	608	amount of ad valorem tax to be levied that would result in a tax rate in
609	609	excess of its revenue neutral rate, the county clerk shall reduce the ad
610	610	valorem tax to be levied to the amount resulting from such taxing
611	611	subdivision's revenue neutral rate.
612	612	(f) As used in this section:
613	613	(1) "Taxing subdivision" means any political subdivision of the
614	614	state that levies an ad valorem tax on property.
615	615	(2) "Revenue neutral rate" means the tax rate for the current tax
616	616	year that would generate the same property tax revenue as levied the
617	617	previous tax year using the current tax year's total assessed valuation.
618	618	To calculate the revenue neutral rate, the county clerk shall divide the
619	619	property tax revenue for such taxing subdivision levied for the previous
620	620	tax year by the total of all taxable assessed valuation in such taxing
621	621	subdivision for the current tax year, and then multiply the quotient by
622	622	1,000 to express the rate in mills. The revenue neutral rate shall be
623	623	expressed to the third decimal place.
624	624	(g) In the event that a county clerk incurred costs of printing and
625	625	postage that were not reimbursed pursuant to K.S.A. 2023 Supp. 79-
626	626	2989, and amendments thereto, such county clerk may seek
627	627	reimbursement from all taxing subdivisions required to send the notice.
628	628	Such costs shall be shared proportionately by all taxing subdivisions
629	629	that were included on the same notice based on the total property tax
630	630	levied by each taxing subdivision. Payment of such costs shall be due
631	631	to the county clerk by December 31.
632	632	(h) The department of administration or the director of accounts
633	633	and reports shall make copies of adopted budgets, budget certificates,
634	634	other budget documents and revenue neutral rate documents available
635	635	to the public on the department of administration's website on a
636	636	permanently accessible web page that may be accessed via a
637	637	conspicuous link to that web page placed on the front page of the
638	638	department's website. The department of administration or the director
639	639	of accounts and reports shall also make the following information for
640	640	each tax year available on such website:
641	641	(1) A list of taxing subdivisions by county;
642	642	(2) whether each taxing subdivision conducted a hearing to
643	643	consider exceeding its revenue neutral rate;
644	644	(3) the revenue neutral rate of each taxing subdivision;
645	645	(4) the tax rate resulting from the adopted budget of each taxing
646	646	subdivision; and
647	647	(5) the percent change between the revenue neutral rate and the
648	648	tax rate for each taxing subdivision.
649	649	(i) Notwithstanding any provisions to the contrary, in the event
650	650	any governing body does not comply with the provisions of subsection
651	651	(b) because such governing body did not intend to exceed its revenue
652	652	neutral rate but the final taxable assessed valuation of such taxing
653	653	subdivision used to calculate the actual tax levy is less than the
654	654	estimated assessed valuation used to calculate the revenue neutral rate,
655	655	such governing body shall be permitted to levy a tax rate that generates
656	656	the same amount of property tax revenue as levied the previous year or
657	657	less.
658	658	Sec. 16. K.S.A. 2023 Supp. 79-32,110 is hereby amended to read
659	659	as follows: 79-32,110. (a) Resident individuals. Except as otherwise
660	660	provided by K.S.A. 79-3220(a), and amendments thereto, a tax is
661	661	hereby imposed upon the Kansas taxable income of every resident SENATE BILL No. 1—page 12
662	662	individual, which tax shall be computed in accordance with the
663	663	following tax schedules:
664	664	(1) Married individuals filing joint returns.
665	665	(A) For tax year 2012:
666	666	If the taxable income is: The tax is:
667	667	Not over $30,000 3.5% of Kansas taxable income
668	668	Over $30,000 but not over $60,000 $1,050 plus 6.25% of excess
669	669	over $30,000
670	670	Over $60,000 $2,925 plus 6.45% of excess
671	671	over $60,000
672	672	(B) For tax year 2013:
673	673	If the taxable income is: The tax is:
674	674	Not over $30,000 3.0% of Kansas taxable income
675	675	Over $30,000 $900 plus 4.9% of excess over
676	676	$30,000
677	677	(C) For tax year 2014:
678	678	If the taxable income is: The tax is:
679	679	Not over $30,000 2.7% of Kansas taxable income
680	680	Over $30,000 $810 plus 4.8% of excess over
681	681	$30,000
682	682	(D) For tax years 2015 and 2016:
683	683	If the taxable income is: The tax is:
684	684	Not over $30,000 2.7% of Kansas taxable income
685	685	Over $30,000 $810 plus 4.6% of excess over
686	686	$30,000
687	687	(E) For tax year 2017:
688	688	If the taxable income is: The tax is:
689	689	Not over $30,000 2.9% of Kansas taxable income
690	690	Over $30,000 but not over $60,000 $870 plus 4.9% of excess over
691	691	$30,000
692	692	Over $60,000 $2,340 plus 5.2% of excess over
693	693	$60,000
694	694	(F) For tax year years 2018, and all tax years thereafter through
695	695	2023:
696	696	If the taxable income is: The tax is:
697	697	Not over $30,000...................................3.1% of Kansas taxable income
698	698	Over $30,000 but not over $60,000.......$930 plus 5.25% of excess
699	699	over $30,000
700	700	Over $60,000.........................................$2,505 plus 5.7% of excess
701	701	over $60,000
702	702	(B) For tax year 2024, and all tax years thereafter:
703	703	If the taxable income is: The tax is:
704	704	Not over $46,000…...............................5.2% of Kansas taxable income
705	705	Over $46,000.........................................$2,392 plus 5.58% of excess
706	706	over $46,000
707	707	(2) All other individuals.
708	708	(A) For tax year 2012:
709	709	If the taxable income is: The tax is:
710	710	Not over $15,000 3.5% of Kansas taxable income
711	711	Over $15,000 but not over $30,000 $525 plus 6.25% of excess
712	712	over $15,000
713	713	Over $30,000 $1,462.50 plus 6.45% of excess
714	714	over $30,000
715	715	(B) For tax year 2013:
716	716	If the taxable income is: The tax is:
717	717	Not over $15,000 3.0% of Kansas taxable income
718	718	Over $15,000 $450 plus 4.9% of excess over
719	719	$15,000
720	720	(C) For tax year 2014: SENATE BILL No. 1—page 13
721	721	If the taxable income is The tax is:
722	722	Not over $15,000 2.7% of Kansas taxable income
723	723	Over $15,000 $405 plus 4.8% of excess over
724	724	$15,000
725	725	(D) For tax years 2015 and 2016:
726	726	If the taxable income is: The tax is:
727	727	Not over $15,000 2.7% of Kansas taxable income
728	728	Over $15,000 $405 plus 4.6% of excess over
729	729	$15,000
730	730	(E) For tax year 2017:
731	731	If the taxable income is: The tax is:
732	732	Not over $15,000 2.9% of Kansas taxable income
733	733	Over $15,000 but not over $30,000 $435 plus 4.9% of excess over
734	734	$15,000
735	735	Over $30,000 $1,170 plus 5.2% of excess over
736	736	$30,000
737	737	(F) For tax year years 2018, and all tax years thereafter through
738	738	2023:
739	739	If the taxable income is: The tax is:
740	740	Not over $15,000...................................3.1% of Kansas taxable income
741	741	Over $15,000 but not over $30,000.......$465 plus 5.25% of excess
742	742	over $15,000
743	743	Over $30,000.........................................$1,252.50 plus 5.7% of excess
744	744	over $30,000
745	745	(B) For tax year 2024, and all tax years thereafter:
746	746	If the taxable income is: The tax is:
747	747	Not over $23,000…...............................5.2% of Kansas taxable income
748	748	Over $23,000.........................................$1,196 plus 5.58% of excess
749	749	over $23,000
750	750	(b) Nonresident individuals. A tax is hereby imposed upon the
751	751	Kansas taxable income of every nonresident individual, which tax shall
752	752	be an amount equal to the tax computed under subsection (a) as if the
753	753	nonresident were a resident multiplied by the ratio of modified Kansas
754	754	source income to Kansas adjusted gross income.
755	755	(c) Corporations. A tax is hereby imposed upon the Kansas
756	756	taxable income of every corporation doing business within this state or
757	757	deriving income from sources within this state. Such tax shall consist of
758	758	a normal tax and a surtax and shall be computed as follows unless
759	759	otherwise modified pursuant to K.S.A. 2023 Supp. 74-50,321, and
760	760	amendments thereto:
761	761	(1) The normal tax shall be in an amount equal to 4% of the
762	762	Kansas taxable income of such corporation; and
763	763	(2) the surtax shall be in an amount equal to 3% of the Kansas
764	764	taxable income of such corporation in excess of $50,000.
765	765	(d) Fiduciaries. A tax is hereby imposed upon the Kansas taxable
766	766	income of estates and trusts at the rates provided in subsection (a)(2)
767	767	hereof.
768	768	(e) Notwithstanding the provisions of subsections (a) and (b): (1)
769	769	For tax years 2016 and 2017, married individuals filing joint returns
770	770	with taxable income of $12,500 or less, and all other individuals with
771	771	taxable income of $5,000 or less, shall have a tax liability of zero; and
772	772	(2), for tax year years 2018, and all tax years thereafter through 2023,
773	773	married individuals filing joint returns with taxable income of $5,000
774	774	or less, and all other individuals with taxable income of $2,500 or less,
775	775	shall have a tax liability of zero.
776	776	(f) No taxpayer shall be assessed penalties and interest arising
777	777	from the underpayment of taxes due to changes to the rates in
778	778	subsection (a) that became law on July 1, 2017, so long as such
779	779	underpayment is rectified on or before April 17, 2018. SENATE BILL No. 1—page 14
780	780	Sec. 17. K.S.A. 79-32,111c is hereby amended to read as follows:
781	781	79-32,111c. (a) There shall be allowed as a credit against the tax
782	782	liability of a resident individual imposed under the Kansas income tax
783	783	act an amount equal to 12.5% for tax year 2018; an amount equal to
784	784	18.75% for tax year 2019; and an amount equal to 25% for tax year
785	785	years 2020 through 2023 and an amount equal to 50% for tax year
786	786	2024, and all tax years thereafter, of the amount of the credit allowed
787	787	against such taxpayer's federal income tax liability pursuant to 26
788	788	U.S.C. § 21 for the taxable year in which such credit was claimed
789	789	against the taxpayer's federal income tax liability.
790	790	(b) The credit allowed by subsection (a) shall not exceed the
791	791	amount of the tax imposed by K.S.A. 79-32,110, and amendments
792	792	thereto, reduced by the sum of any other credits allowable pursuant to
793	793	law.
794	794	(c) No credit provided under this section shall be allowed to any
795	795	individual who fails to provide a valid social security number issued by
796	796	the social security administration, to such individual, the individual's
797	797	spouse and every dependent of the individual.
798	798	Sec. 18. On and after July 1, 2024, K.S.A. 2023 Supp. 79-32,117,
799	799	as amended by section 14 of 2023 Senate Bill No. 27, is hereby
800	800	amended to read as follows: 79-32,117. (a) The Kansas adjusted gross
801	801	income of an individual means such individual's federal adjusted gross
802	802	income for the taxable year, with the modifications specified in this
803	803	section.
804	804	(b) There shall be added to federal adjusted gross income:
805	805	(i) Interest income less any related expenses directly incurred in
806	806	the purchase of state or political subdivision obligations, to the extent
807	807	that the same is not included in federal adjusted gross income, on
808	808	obligations of any state or political subdivision thereof, but to the
809	809	extent that interest income on obligations of this state or a political
810	810	subdivision thereof issued prior to January 1, 1988, is specifically
811	811	exempt from income tax under the laws of this state authorizing the
812	812	issuance of such obligations, it shall be excluded from computation of
813	813	Kansas adjusted gross income whether or not included in federal
814	814	adjusted gross income. Interest income on obligations of this state or a
815	815	political subdivision thereof issued after December 31, 1987, shall be
816	816	excluded from computation of Kansas adjusted gross income whether
817	817	or not included in federal adjusted gross income.
818	818	(ii) Taxes on or measured by income or fees or payments in lieu of
819	819	income taxes imposed by this state or any other taxing jurisdiction to
820	820	the extent deductible in determining federal adjusted gross income and
821	821	not credited against federal income tax. This paragraph shall not apply
822	822	to taxes imposed under the provisions of K.S.A. 79-1107 or 79-1108,
823	823	and amendments thereto, for privilege tax year 1995, and all such years
824	824	thereafter.
825	825	(iii) The federal net operating loss deduction, except that the
826	826	federal net operating loss deduction shall not be added to an
827	827	individual's federal adjusted gross income for tax years beginning after
828	828	December 31, 2016.
829	829	(iv) Federal income tax refunds received by the taxpayer if the
830	830	deduction of the taxes being refunded resulted in a tax benefit for
831	831	Kansas income tax purposes during a prior taxable year. Such refunds
832	832	shall be included in income in the year actually received regardless of
833	833	the method of accounting used by the taxpayer. For purposes hereof, a
834	834	tax benefit shall be deemed to have resulted if the amount of the tax
835	835	had been deducted in determining income subject to a Kansas income
836	836	tax for a prior year regardless of the rate of taxation applied in such
837	837	prior year to the Kansas taxable income, but only that portion of the
838	838	refund shall be included as bears the same proportion to the total refund SENATE BILL No. 1—page 15
839	839	received as the federal taxes deducted in the year to which such refund
840	840	is attributable bears to the total federal income taxes paid for such year.
841	841	For purposes of the foregoing sentence, federal taxes shall be
842	842	considered to have been deducted only to the extent such deduction
843	843	does not reduce Kansas taxable income below zero.
844	844	(v) The amount of any depreciation deduction or business expense
845	845	deduction claimed on the taxpayer's federal income tax return for any
846	846	capital expenditure in making any building or facility accessible to the
847	847	handicapped, for which expenditure the taxpayer claimed the credit
848	848	allowed by K.S.A. 79-32,177, and amendments thereto.
849	849	(vi) Any amount of designated employee contributions picked up
850	850	by an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-
851	851	4965, and amendments thereto.
852	852	(vii) The amount of any charitable contribution made to the extent
853	853	the same is claimed as the basis for the credit allowed pursuant to
854	854	K.S.A. 79-32,196, and amendments thereto.
855	855	(viii) The amount of any costs incurred for improvements to a
856	856	swine facility, claimed for deduction in determining federal adjusted
857	857	gross income, to the extent the same is claimed as the basis for any
858	858	credit allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
859	859	(ix) The amount of any ad valorem taxes and assessments paid and
860	860	the amount of any costs incurred for habitat management or
861	861	construction and maintenance of improvements on real property,
862	862	claimed for deduction in determining federal adjusted gross income, to
863	863	the extent the same is claimed as the basis for any credit allowed
864	864	pursuant to K.S.A. 79-32,203, and amendments thereto.
865	865	(x) Amounts received as nonqualified withdrawals, as defined by
866	866	K.S.A. 75-643, and amendments thereto, if, at the time of contribution
867	867	to a family postsecondary education savings account, such amounts
868	868	were subtracted from the federal adjusted gross income pursuant to
869	869	subsection (c)(xv) or if such amounts are not already included in the
870	870	federal adjusted gross income.
871	871	(xi) The amount of any contribution made to the same extent the
872	872	same is claimed as the basis for the credit allowed pursuant to K.S.A.
873	873	74-50,154, and amendments thereto.
874	874	(xii) For taxable years commencing after December 31, 2004,
875	875	amounts received as withdrawals not in accordance with the provisions
876	876	of K.S.A. 74-50,204, and amendments thereto, if, at the time of
877	877	contribution to an individual development account, such amounts were
878	878	subtracted from the federal adjusted gross income pursuant to
879	879	subsection (c)(xiii), or if such amounts are not already included in the
880	880	federal adjusted gross income.
881	881	(xiii) The amount of any expenditures claimed for deduction in
882	882	determining federal adjusted gross income, to the extent the same is
883	883	claimed as the basis for any credit allowed pursuant to K.S.A. 79-
884	884	32,217 through 79-32,220 or 79-32,222, and amendments thereto.
885	885	(xiv) The amount of any amortization deduction claimed in
886	886	determining federal adjusted gross income to the extent the same is
887	887	claimed for deduction pursuant to K.S.A. 79-32,221, and amendments
888	888	thereto.
889	889	(xv) The amount of any expenditures claimed for deduction in
890	890	determining federal adjusted gross income, to the extent the same is
891	891	claimed as the basis for any credit allowed pursuant to K.S.A. 79-
892	892	32,223 through 79-32,226, 79-32,228 through 79-32,231, 79-32,233
893	893	through 79-32,236, 79-32,238 through 79-32,241, 79-32,245 through
894	894	79-32,248 or 79-32,251 through 79-32,254, and amendments thereto.
895	895	(xvi) The amount of any amortization deduction claimed in
896	896	determining federal adjusted gross income to the extent the same is
897	897	claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79- SENATE BILL No. 1—page 16
898	898	32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
899	899	(xvii) The amount of any amortization deduction claimed in
900	900	determining federal adjusted gross income to the extent the same is
901	901	claimed for deduction pursuant to K.S.A. 79-32,256, and amendments
902	902	thereto.
903	903	(xviii) For taxable years commencing after December 31, 2006,
904	904	the amount of any ad valorem or property taxes and assessments paid to
905	905	a state other than Kansas or local government located in a state other
906	906	than Kansas by a taxpayer who resides in a state other than Kansas,
907	907	when the law of such state does not allow a resident of Kansas who
908	908	earns income in such other state to claim a deduction for ad valorem or
909	909	property taxes or assessments paid to a political subdivision of the state
910	910	of Kansas in determining taxable income for income tax purposes in
911	911	such other state, to the extent that such taxes and assessments are
912	912	claimed as an itemized deduction for federal income tax purposes.
913	913	(xix) For taxable years beginning after December 31, 2012, and
914	914	ending before January 1, 2017, the amount of any: (1) Loss from
915	915	business as determined under the federal internal revenue code and
916	916	reported from schedule C and on line 12 of the taxpayer's form 1040
917	917	federal individual income tax return; (2) loss from rental real estate,
918	918	royalties, partnerships, S corporations, except those with wholly owned
919	919	subsidiaries subject to the Kansas privilege tax, estates, trusts, residual
920	920	interest in real estate mortgage investment conduits and net farm rental
921	921	as determined under the federal internal revenue code and reported
922	922	from schedule E and on line 17 of the taxpayer's form 1040 federal
923	923	individual income tax return; and (3) farm loss as determined under the
924	924	federal internal revenue code and reported from schedule F and on line
925	925	18 of the taxpayer's form 1040 federal income tax return; all to the
926	926	extent deducted or subtracted in determining the taxpayer's federal
927	927	adjusted gross income. For purposes of this subsection, references to
928	928	the federal form 1040 and federal schedule C, schedule E, and schedule
929	929	F, shall be to such form and schedules as they existed for tax year 2011,
930	930	and as revised thereafter by the internal revenue service.
931	931	(xx) For taxable years beginning after December 31, 2012, and
932	932	ending before January 1, 2017, the amount of any deduction for self-
933	933	employment taxes under section 164(f) of the federal internal revenue
934	934	code as in effect on January 1, 2012, and amendments thereto, in
935	935	determining the federal adjusted gross income of an individual
936	936	taxpayer, to the extent the deduction is attributable to income reported
937	937	on schedule C, E or F and on line 12, 17 or 18 of the taxpayer's form
938	938	1040 federal income tax return.
939	939	(xxi) For taxable years beginning after December 31, 2012, and
940	940	ending before January 1, 2017, the amount of any deduction for
941	941	pension, profit sharing, and annuity plans of self-employed individuals
942	942	under section 62(a)(6) of the federal internal revenue code as in effect
943	943	on January 1, 2012, and amendments thereto, in determining the federal
944	944	adjusted gross income of an individual taxpayer.
945	945	(xxii) For taxable years beginning after December 31, 2012, and
946	946	ending before January 1, 2017, the amount of any deduction for health
947	947	insurance under section 162(l) of the federal internal revenue code as in
948	948	effect on January 1, 2012, and amendments thereto, in determining the
949	949	federal adjusted gross income of an individual taxpayer.
950	950	(xxiii) For taxable years beginning after December 31, 2012, and
951	951	ending before January 1, 2017, the amount of any deduction for
952	952	domestic production activities under section 199 of the federal internal
953	953	revenue code as in effect on January 1, 2012, and amendments thereto,
954	954	in determining the federal adjusted gross income of an individual
955	955	taxpayer.
956	956	(xxiv) For taxable years commencing after December 31, 2013, SENATE BILL No. 1—page 17
957	957	that portion of the amount of any expenditure deduction claimed in
958	958	determining federal adjusted gross income for expenses paid for
959	959	medical care of the taxpayer or the taxpayer's spouse or dependents
960	960	when such expenses were paid or incurred for an abortion, or for a
961	961	health benefit plan, as defined in K.S.A. 65-6731, and amendments
962	962	thereto, for the purchase of an optional rider for coverage of abortion in
963	963	accordance with K.S.A. 40-2,190, and amendments thereto, to the
964	964	extent that such taxes and assessments are claimed as an itemized
965	965	deduction for federal income tax purposes.
966	966	(xxv) For taxable years commencing after December 31, 2013,
967	967	that portion of the amount of any expenditure deduction claimed in
968	968	determining federal adjusted gross income for expenses paid by a
969	969	taxpayer for health care when such expenses were paid or incurred for
970	970	abortion coverage, a health benefit plan, as defined in K.S.A. 65-6731,
971	971	and amendments thereto, when such expenses were paid or incurred for
972	972	abortion coverage or amounts contributed to health savings accounts
973	973	for such taxpayer's employees for the purchase of an optional rider for
974	974	coverage of abortion in accordance with K.S.A. 40-2,190, and
975	975	amendments thereto, to the extent that such taxes and assessments are
976	976	claimed as a deduction for federal income tax purposes.
977	977	(xxvi) For all taxable years beginning after December 31, 2016,
978	978	the amount of any charitable contribution made to the extent the same
979	979	is claimed as the basis for the credit allowed pursuant to K.S.A. 72-
980	980	4357, and amendments thereto, and is also claimed as an itemized
981	981	deduction for federal income tax purposes.
982	982	(xxvii) For all taxable years commencing after December 31,
983	983	2020, the amount of any interest expense paid or accrued in a previous
984	984	taxable year but allowed as a deduction pursuant to section 163 of the
985	985	federal internal revenue code in the current taxable year by reason of
986	986	the carryforward of disallowed business interest pursuant to section
987	987	163(j) of the federal internal revenue code. For purposes of this
988	988	paragraph, an interest expense is considered paid or accrued only in the
989	989	first taxable year the deduction would have been allowable pursuant to
990	990	section 163 of the federal internal revenue code if the limitation
991	991	pursuant to section 163(j) of the federal internal revenue code did not
992	992	exist.
993	993	(xxviii) For all taxable years beginning after December 31, 2021,
994	994	the amount of any contributions to, or earnings from, a first-time home
995	995	buyer savings account if distributions from the account were not used
996	996	to pay for expenses or transactions authorized pursuant to K.S.A. 2023
997	997	Supp. 58-4904, and amendments thereto, or were not held for the
998	998	minimum length of time required pursuant to K.S.A. 2023 Supp. 58-
999	999	4904, and amendments thereto. Contributions to, or earnings from,
1000	1000	such account shall also include any amount resulting from the account
1001	1001	holder not designating a surviving payable on death beneficiary
1002	1002	pursuant to K.S.A. 2023 Supp. 58-4904(e), and amendments thereto.
1003	1003	(xxix) For all taxable years beginning after December 31, 2024,
1004	1004	the amount of any contributions to, or earnings from, an adoption
1005	1005	savings account if distributions from the account were not used to pay
1006	1006	for expenses or transactions authorized pursuant to section 4 of 2024
1007	1007	House Bill No. 2465, and amendments thereto, or were not held for the
1008	1008	minimum length of time required pursuant to section 4 of 2024 House
1009	1009	Bill No. 2465, and amendments thereto. Contributions to, or earnings
1010	1010	from, such account shall also include any amount resulting from the
1011	1011	account holder not designating a surviving payable on death
1012	1012	beneficiary pursuant to section 4(e) of 2024 House Bill No. 2465, and
1013	1013	amendments thereto.
1014	1014	(c) There shall be subtracted from federal adjusted gross income:
1015	1015	(i) Interest or dividend income on obligations or securities of any SENATE BILL No. 1—page 18
1016	1016	authority, commission or instrumentality of the United States and its
1017	1017	possessions less any related expenses directly incurred in the purchase
1018	1018	of such obligations or securities, to the extent included in federal
1019	1019	adjusted gross income but exempt from state income taxes under the
1020	1020	laws of the United States.
1021	1021	(ii) Any amounts received which are included in federal adjusted
1022	1022	gross income but which are specifically exempt from Kansas income
1023	1023	taxation under the laws of the state of Kansas.
1024	1024	(iii) The portion of any gain or loss from the sale or other
1025	1025	disposition of property having a higher adjusted basis for Kansas
1026	1026	income tax purposes than for federal income tax purposes on the date
1027	1027	such property was sold or disposed of in a transaction in which gain or
1028	1028	loss was recognized for purposes of federal income tax that does not
1029	1029	exceed such difference in basis, but if a gain is considered a long-term
1030	1030	capital gain for federal income tax purposes, the modification shall be
1031	1031	limited to that portion of such gain which is included in federal
1032	1032	adjusted gross income.
1033	1033	(iv) The amount necessary to prevent the taxation under this act of
1034	1034	any annuity or other amount of income or gain which was properly
1035	1035	included in income or gain and was taxed under the laws of this state
1036	1036	for a taxable year prior to the effective date of this act, as amended, to
1037	1037	the taxpayer, or to a decedent by reason of whose death the taxpayer
1038	1038	acquired the right to receive the income or gain, or to a trust or estate
1039	1039	from which the taxpayer received the income or gain.
1040	1040	(v) The amount of any refund or credit for overpayment of taxes
1041	1041	on or measured by income or fees or payments in lieu of income taxes
1042	1042	imposed by this state, or any taxing jurisdiction, to the extent included
1043	1043	in gross income for federal income tax purposes.
1044	1044	(vi) Accumulation distributions received by a taxpayer as a
1045	1045	beneficiary of a trust to the extent that the same are included in federal
1046	1046	adjusted gross income.
1047	1047	(vii) Amounts received as annuities under the federal civil service
1048	1048	retirement system from the civil service retirement and disability fund
1049	1049	and other amounts received as retirement benefits in whatever form
1050	1050	which were earned for being employed by the federal government or
1051	1051	for service in the armed forces of the United States.
1052	1052	(viii) Amounts received by retired railroad employees as a
1053	1053	supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and
1054	1054	228c(a)(1) et seq.
1055	1055	(ix) Amounts received by retired employees of a city and by
1056	1056	retired employees of any board of such city as retirement allowances
1057	1057	pursuant to K.S.A. 13-14,106, and amendments thereto, or pursuant to
1058	1058	any charter ordinance exempting a city from the provisions of K.S.A.
1059	1059	13-14,106, and amendments thereto.
1060	1060	(x) (1) For taxable years beginning after December 31, 2021, the
1061	1061	amount of any federal credit disallowance under the provisions of 26
1062	1062	U.S.C. § 280C(a).
1063	1063	(2) For taxable years beginning after December 31, 2019, and
1064	1064	ending before January 1, 2022, 50% of the amount of the federal
1065	1065	employee retention credit disallowance under rules similar to the rules
1066	1066	of 26 U.S.C. § 280C(a). The taxpayer shall be required to prove that
1067	1067	such taxpayer previously filed Kansas income tax returns and paid
1068	1068	Kansas income tax on the disallowed amount. Notwithstanding any
1069	1069	other provision of law to the contrary, any claim for refund or amended
1070	1070	return relating to this subparagraph shall be allowed to be filed on or
1071	1071	before April 15, 2025, and no claim for refund or amended return shall
1072	1072	be allowed or filed after April 15, 2025.
1073	1073	(xi) For taxable years beginning after December 31, 1986,
1074	1074	dividend income on stock issued by Kansas venture capital, inc. SENATE BILL No. 1—page 19
1075	1075	(xii) For taxable years beginning after December 31, 1989,
1076	1076	amounts received by retired employees of a board of public utilities as
1077	1077	pension and retirement benefits pursuant to K.S.A. 13-1246, 13-1246a
1078	1078	and 13-1249, and amendments thereto.
1079	1079	(xiii) For taxable years beginning after December 31, 2004,
1080	1080	amounts contributed to and the amount of income earned on
1081	1081	contributions deposited to an individual development account under
1082	1082	K.S.A. 74-50,201 et seq., and amendments thereto.
1083	1083	(xiv) For all taxable years commencing after December 31, 1996,
1084	1084	that portion of any income of a bank organized under the laws of this
1085	1085	state or any other state, a national banking association organized under
1086	1086	the laws of the United States, an association organized under the
1087	1087	savings and loan code of this state or any other state, or a federal
1088	1088	savings association organized under the laws of the United States, for
1089	1089	which an election as an S corporation under subchapter S of the federal
1090	1090	internal revenue code is in effect, which accrues to the taxpayer who is
1091	1091	a stockholder of such corporation and which is not distributed to the
1092	1092	stockholders as dividends of the corporation. For taxable years
1093	1093	beginning after December 31, 2012, and ending before January 1, 2017,
1094	1094	the amount of modification under this subsection shall exclude the
1095	1095	portion of income or loss reported on schedule E and included on line
1096	1096	17 of the taxpayer's form 1040 federal individual income tax return.
1097	1097	(xv) The cumulative amounts not exceeding $3,000, or $6,000 for
1098	1098	a married couple filing a joint return, for each designated beneficiary
1099	1099	that are contributed to: (1) A family postsecondary education savings
1100	1100	account established under the Kansas postsecondary education savings
1101	1101	program or a qualified tuition program established and maintained by
1102	1102	another state or agency or instrumentality thereof pursuant to section
1103	1103	529 of the internal revenue code of 1986, as amended, for the purpose
1104	1104	of paying the qualified higher education expenses of a designated
1105	1105	beneficiary; or (2) an achieving a better life experience (ABLE)
1106	1106	account established under the Kansas ABLE savings program or a
1107	1107	qualified ABLE program established and maintained by another state or
1108	1108	agency or instrumentality thereof pursuant to section 529A of the
1109	1109	internal revenue code of 1986, as amended, for the purpose of saving
1110	1110	private funds to support an individual with a disability. The terms and
1111	1111	phrases used in this paragraph shall have the meaning respectively
1112	1112	ascribed thereto by the provisions of K.S.A. 75-643 and 75-652, and
1113	1113	amendments thereto, and the provisions of such sections are hereby
1114	1114	incorporated by reference for all purposes thereof. For all taxable years
1115	1115	beginning after December 31, 2022, contributions made to a qualified
1116	1116	tuition program account or a qualified ABLE program account pursuant
1117	1117	to this paragraph on and after January 1 but prior to the date required
1118	1118	for filing a return pursuant to K.S.A. 79-3221, and amendments thereto,
1119	1119	of the successive taxable year may be elected by the taxpayer to apply
1120	1120	to the prior taxable year if such election is made at the time of filing the
1121	1121	return. No contribution shall be used as a modification pursuant to this
1122	1122	paragraph in more than one taxable year.
1123	1123	(xvi) For all taxable years beginning after December 31, 2004,
1124	1124	amounts received by taxpayers who are or were members of the armed
1125	1125	forces of the United States, including service in the Kansas army and
1126	1126	air national guard, as a recruitment, sign up or retention bonus received
1127	1127	by such taxpayer as an incentive to join, enlist or remain in the armed
1128	1128	services of the United States, including service in the Kansas army and
1129	1129	air national guard, and amounts received for repayment of educational
1130	1130	or student loans incurred by or obligated to such taxpayer and received
1131	1131	by such taxpayer as a result of such taxpayer's service in the armed
1132	1132	forces of the United States, including service in the Kansas army and
1133	1133	air national guard. SENATE BILL No. 1—page 20
1134	1134	(xvii) For all taxable years beginning after December 31, 2004,
1135	1135	amounts received by taxpayers who are eligible members of the Kansas
1136	1136	army and air national guard as a reimbursement pursuant to K.S.A. 48-
1137	1137	281, and amendments thereto, and amounts received for death benefits
1138	1138	pursuant to K.S.A. 48-282, and amendments thereto, to the extent that
1139	1139	such death benefits are included in federal adjusted gross income of the
1140	1140	taxpayer.
1141	1141	(xviii) For the taxable year beginning after December 31, 2006,
1142	1142	amounts received as benefits under the federal social security act which
1143	1143	are included in federal adjusted gross income of a taxpayer with federal
1144	1144	adjusted gross income of $50,000 or less, whether such taxpayer's filing
1145	1145	status is single, head of household, married filing separate or married
1146	1146	filing jointly; and (A) For all taxable years beginning after December
1147	1147	31, 2007, and ending before January 1, 2024, amounts received as
1148	1148	benefits under the federal social security act which are included in
1149	1149	federal adjusted gross income of a taxpayer with federal adjusted gross
1150	1150	income of $75,000 or less, whether such taxpayer's filing status is
1151	1151	single, head of household, married filing separate or married filing
1152	1152	jointly.
1153	1153	(B) For all taxable years beginning after December 31, 2023,
1154	1154	amounts received as benefits under the federal social security act that
1155	1155	are included in federal adjusted gross income of a taxpayer.
1156	1156	(xix) Amounts received by retired employees of Washburn
1157	1157	university as retirement and pension benefits under the university's
1158	1158	retirement plan.
1159	1159	(xx) For taxable years beginning after December 31, 2012, and
1160	1160	ending before January 1, 2017, the amount of any: (1) Net profit from
1161	1161	business as determined under the federal internal revenue code and
1162	1162	reported from schedule C and on line 12 of the taxpayer's form 1040
1163	1163	federal individual income tax return; (2) net income, not including
1164	1164	guaranteed payments as defined in section 707(c) of the federal internal
1165	1165	revenue code and as reported to the taxpayer from federal schedule K-
1166	1166	1, (form 1065-B), in box 9, code F or as reported to the taxpayer from
1167	1167	federal schedule K-1, (form 1065) in box 4, from rental real estate,
1168	1168	royalties, partnerships, S corporations, estates, trusts, residual interest
1169	1169	in real estate mortgage investment conduits and net farm rental as
1170	1170	determined under the federal internal revenue code and reported from
1171	1171	schedule E and on line 17 of the taxpayer's form 1040 federal
1172	1172	individual income tax return; and (3) net farm profit as determined
1173	1173	under the federal internal revenue code and reported from schedule F
1174	1174	and on line 18 of the taxpayer's form 1040 federal income tax return;
1175	1175	all to the extent included in the taxpayer's federal adjusted gross
1176	1176	income. For purposes of this subsection, references to the federal form
1177	1177	1040 and federal schedule C, schedule E, and schedule F, shall be to
1178	1178	such form and schedules as they existed for tax year 2011 and as
1179	1179	revised thereafter by the internal revenue service.
1180	1180	(xxi) For all taxable years beginning after December 31, 2013,
1181	1181	amounts equal to the unreimbursed travel, lodging and medical
1182	1182	expenditures directly incurred by a taxpayer while living, or a
1183	1183	dependent of the taxpayer while living, for the donation of one or more
1184	1184	human organs of the taxpayer, or a dependent of the taxpayer, to
1185	1185	another person for human organ transplantation. The expenses may be
1186	1186	claimed as a subtraction modification provided for in this section to the
1187	1187	extent the expenses are not already subtracted from the taxpayer's
1188	1188	federal adjusted gross income. In no circumstances shall the subtraction
1189	1189	modification provided for in this section for any individual, or a
1190	1190	dependent, exceed $5,000. As used in this section, "human organ"
1191	1191	means all or part of a liver, pancreas, kidney, intestine, lung or bone
1192	1192	marrow. The provisions of this paragraph shall take effect on the day SENATE BILL No. 1—page 21
1193	1193	the secretary of revenue certifies to the director of the budget that the
1194	1194	cost for the department of revenue of modifications to the automated
1195	1195	tax system for the purpose of implementing this paragraph will not
1196	1196	exceed $20,000.
1197	1197	(xxii) For taxable years beginning after December 31, 2012, and
1198	1198	ending before January 1, 2017, the amount of net gain from the sale of:
1199	1199	(1) Cattle and horses, regardless of age, held by the taxpayer for draft,
1200	1200	breeding, dairy or sporting purposes, and held by such taxpayer for 24
1201	1201	months or more from the date of acquisition; and (2) other livestock,
1202	1202	regardless of age, held by the taxpayer for draft, breeding, dairy or
1203	1203	sporting purposes, and held by such taxpayer for 12 months or more
1204	1204	from the date of acquisition. The subtraction from federal adjusted
1205	1205	gross income shall be limited to the amount of the additions recognized
1206	1206	under the provisions of subsection (b)(xix) attributable to the business
1207	1207	in which the livestock sold had been used. As used in this paragraph,
1208	1208	the term "livestock" shall not include poultry.
1209	1209	(xxiii) For all taxable years beginning after December 31, 2012,
1210	1210	amounts received under either the Overland Park, Kansas police
1211	1211	department retirement plan or the Overland Park, Kansas fire
1212	1212	department retirement plan, both as established by the city of Overland
1213	1213	Park, pursuant to the city's home rule authority.
1214	1214	(xxiv) For taxable years beginning after December 31, 2013, and
1215	1215	ending before January 1, 2017, the net gain from the sale from
1216	1216	Christmas trees grown in Kansas and held by the taxpayer for six years
1217	1217	or more.
1218	1218	(xxv) For all taxable years commencing after December 31, 2020,
1219	1219	100% of global intangible low-taxed income under section 951A of the
1220	1220	federal internal revenue code of 1986, before any deductions allowed
1221	1221	under section 250(a)(1)(B) of such code.
1222	1222	(xxvi) (1) For all taxable years commencing after December 31,
1223	1223	2020, the amount of any interest expense paid or accrued in the current
1224	1224	taxable year and disallowed as a deduction pursuant to section 163(j) of
1225	1225	the federal internal revenue code.
1226	1226	(2) For purposes of this paragraph, an interest expense is
1227	1227	considered paid or accrued only in the first taxable year the deduction
1228	1228	would have been allowable pursuant to section 163 of the federal
1229	1229	internal revenue code if the limitation pursuant to section 163(j) of the
1230	1230	federal internal revenue code did not exist.
1231	1231	(3) For tax year 2021, an amount equal to the sum of any interest
1232	1232	expenses paid or accrued in tax years 2018, 2019 and 2020 less the sum
1233	1233	of amounts allowed as a deduction pursuant to section 163 of the
1234	1234	federal internal revenue code in tax years 2018, 2019 and 2020.
1235	1235	(xxvii) For taxable years commencing after December 31, 2020,
1236	1236	the amount disallowed as a deduction pursuant to section 274 of the
1237	1237	federal internal revenue code of 1986 for meal expenditures shall be
1238	1238	allowed to the extent such expense was deductible for determining
1239	1239	federal income tax and was allowed and in effect on December 31,
1240	1240	2017.
1241	1241	(xxviii) For all taxable years beginning after December 31, 2021:
1242	1242	(1) The amount contributed to a first-time home buyer savings account
1243	1243	pursuant to K.S.A. 2023 Supp. 58-4903, and amendments thereto, in an
1244	1244	amount not to exceed $3,000 for an individual or $6,000 for a married
1245	1245	couple filing a joint return; or (2) amounts received as income earned
1246	1246	from assets in a first-time home buyer savings account. For all taxable
1247	1247	years beginning after December 31, 2022, contributions made to a first-
1248	1248	time home buyer savings account pursuant to subparagraph (1) on and
1249	1249	after January 1 but prior to the date required for filing a return pursuant
1250	1250	to K.S.A. 79-3221, and amendments thereto, of the successive taxable
1251	1251	year may be elected by the taxpayer to apply to the prior taxable year if SENATE BILL No. 1—page 22
1252	1252	such election is made at the time of filing the return. No contribution
1253	1253	shall be used as a modification pursuant to subparagraph (1) in more
1254	1254	than one taxable year.
1255	1255	(xxix) For taxable years beginning after December 31, 2017, for
1256	1256	an individual taxpayer who carried back federal net operating losses
1257	1257	arising in a taxable year beginning after December 31, 2017, and before
1258	1258	January 1, 2021, pursuant to section 172(b)(1) of the federal internal
1259	1259	revenue code as amended by the coronavirus aid, relief, and economic
1260	1260	security act (CARES act), the amount of such federal net operating loss
1261	1261	carryback for each applicable year. If the amount of such federal net
1262	1262	operating loss carryback exceeds the taxpayer's Kansas adjusted gross
1263	1263	income for such taxable year, the amount thereof that exceeds such
1264	1264	Kansas adjusted gross income may be carried forward as a subtraction
1265	1265	modification in the following taxable year or years until the total
1266	1266	amount of such federal net operating loss carryback has been deducted,
1267	1267	except that no such unused amount shall be carried forward for
1268	1268	deduction as a subtraction modification after the 20
1269	1269	th
1270	1270	taxable year
1271	1271	following the taxable year of the net operating loss. Notwithstanding
1272	1272	any other provision of law to the contrary, an extension of time shall be
1273	1273	allowed for a claim for refund or amended return for tax years 2018,
1274	1274	2019 or 2020 limited to the application of the provisions of this
1275	1275	paragraph and such claim for refund or amended return must be filed
1276	1276	on or before April 15, 2025.
1277	1277	(xxx) For all taxable years beginning after December 31, 2024: (1)
1278	1278	The amount contributed to an adoption savings account pursuant to
1279	1279	section 3 of 2024 House Bill No. 2465, and amendments thereto, in an
1280	1280	amount not to exceed $6,000 for an individual or $12,000 for a married
1281	1281	couple filing a joint return; or (2) amounts received as income earned
1282	1282	from assets in an adoption savings account.
1283	1283	(d) There shall be added to or subtracted from federal adjusted
1284	1284	gross income the taxpayer's share, as beneficiary of an estate or trust, of
1285	1285	the Kansas fiduciary adjustment determined under K.S.A. 79-32,135,
1286	1286	and amendments thereto.
1287	1287	(e) The amount of modifications required to be made under this
1288	1288	section by a partner which relates to items of income, gain, loss,
1289	1289	deduction or credit of a partnership shall be determined under K.S.A.
1290	1290	79-32,131, and amendments thereto, to the extent that such items affect
1291	1291	federal adjusted gross income of the partner.
1292	1292	Sec. 19. K.S.A. 2023 Supp. 79-32,119 is hereby amended to read
1293	1293	as follows: 79-32,119. (a) The Kansas standard deduction of an
1294	1294	individual, including a husband and wife who are either both residents
1295	1295	or who file a joint return as if both were residents, shall be equal to the
1296	1296	sum of the standard deduction amount allowed pursuant to this section,
1297	1297	and the additional standard deduction amount allowed pursuant to this
1298	1298	section for each such deduction allowable to such individual or to such
1299	1299	husband and wife under the federal internal revenue code.
1300	1300	(b) For tax year 1998, and all tax years thereafter, the additional
1301	1301	standard deduction amount shall be as follows: Single individual and
1302	1302	head of household filing status, $850; and married filing status, $700.
1303	1303	(c) (1) For tax year 2013 through tax year 2020, the standard
1304	1304	deduction amount of an individual, including husband and wife who
1305	1305	are either both residents or who file a joint return as if both were
1306	1306	residents, shall be as follows: Single individual filing status, $3,000;
1307	1307	married filing status, $7,500; and head of household filing status,
1308	1308	$5,500.
1309	1309	(2) For tax year years 2021, and all tax years thereafter through
1310	1310	2023, the standard deduction amount of an individual, including
1311	1311	husband and wife who are either both residents or who file a joint
1312	1312	return as if both were residents, shall be as follows: Single individual SENATE BILL No. 1—page 23
1313	1313	filing status, $3,500; married filing status, $8,000; and head of
1314	1314	household filing status, $6,000.
1315	1315	(2) For tax year 2024, and all tax years thereafter, the standard
1316	1316	deduction amount of an individual, including husband and wife who
1317	1317	are either both residents or who file a joint return as if both were
1318	1318	residents, shall be as follows: Single individual filing status, $3,605;
1319	1319	married filing status, $8,240; and head of household filing status,
1320	1320	$6,180.
1321	1321	(d) For purposes of this section, the federal standard deduction
1322	1322	allowable to a husband and wife filing separate Kansas income tax
1323	1323	returns shall be determined on the basis that separate federal returns
1324	1324	were filed, and the federal standard deduction of a husband and wife
1325	1325	filing a joint Kansas income tax return shall be determined on the basis
1326	1326	that a joint federal income tax return was filed.
1327	1327	Sec. 20. K.S.A. 2023 Supp. 79-32,121 is hereby amended to read
1328	1328	as follows: 79-32,121. (a) An individual For tax year 2024, and all tax
1329	1329	years thereafter, a taxpayer shall be allowed a Kansas exemption of
1330	1330	$2,250 for each exemption as follows:
1331	1331	(1) In the case of married individuals filing a joint return, a
1332	1332	personal exemption of $18,320;
1333	1333	(2) in the case of all other individuals with a filing status of
1334	1334	single, head of household or married filing separate, a personal
1335	1335	exemption of $9,160; and
1336	1336	(3) in addition to the amount allowed pursuant to paragraph (1)
1337	1337	or (2), a personal exemption of $2,320 for each dependent for which
1338	1338	such individual taxpayer is entitled to a deduction for the taxable year
1339	1339	for federal income tax purposes.
1340	1340	(b) In addition to the exemptions provided in subsection (a), any
1341	1341	individual who has been honorably discharged from active service in
1342	1342	any branch of the armed forces of the United States and who is certified
1343	1343	by the United States department of veterans affairs or its successor to
1344	1344	be in receipt of disability compensation at the 100% rate, if the
1345	1345	disability is permanent and was sustained through military action or
1346	1346	accident or resulted from disease contracted while in such active
1347	1347	service, such individual shall be allowed an additional Kansas
1348	1348	exemption of $2,250 for tax year 2023 and all tax years thereafter.
1349	1349	Sec. 21. K.S.A. 65-163j, 65-3306, 65-3327, 75-2556, 79-503a, 79-
1350	1350	5a27, 79-1107, 79-1108, 79-1479 and 79-32,111c and K.S.A. 2023
1351	1351	Supp. 74-8768, 79-201x, 79-32,110, 79-32,119 and 79-32,121 are
1352	1352	hereby repealed.
1353	1353	Sec. 22. On and after July 1, 2024, K.S.A. 19-2694, 79-2960, 79-
1354	1354	2961, 79-2962, 79-2965, 79-2966 and 79-2967 and K.S.A. 2023 Supp.
1355	1355	79-2959, as amended by section 189 of 2023 Senate Bill No. 28, 79-
1356	1356	2964, as amended by section 190 of 2023 Senate Bill No. 28, 79-2988,
1357	1357	as amended by section 15 of 2024 Senate Bill No. 410, and 79-32,117,
1358	1358	as amended by section 14 of 2023 Senate Bill No. 27, are hereby
1359	1359	repealed. SENATE BILL No. 1—page 24
1360	1360	Sec. 23. This act shall take effect and be in force from and after its
1361	1361	publication in the Kansas register.
1362	1362	I hereby certify that the above BILL originated in the
1363	1363	SENATE, and passed that body
1364	1364	_________________________
1365	1365	_________________________
1366	1366	President of the Senate.
1367	1367	_________________________
1368	1368	Secretary of the Senate.
1369	1369
1370	1370	Passed the HOUSE ________________________
1371	1371	_________________________
1372	1372	Speaker of the House.
1373	1373	_________________________
1374	1374	Chief Clerk of the House.
1375	1375	APPROVED ____________________________
1376	1376	_________________________
1377	1377	Governor.