SESSION OF 2025
SUPPLEMENTAL NOTE ON SENATE BILL NO. 35
As Amended by House Committee of the Whole
Brief*
SB 35, as amended, would create a property tax funding
limit in cases of successful protest petitions, create a fund to
provide payments to taxing jurisdictions not exceeding levels
specified by the bill, repeal the revenue neutral rate notice
and hearing requirements for taxing jurisdictions, and
reauthorize the statewide school finance mill levy.
Property Tax Funding Limit
The bill would limit, in cases of a successful protest
petition, the amount of ad valorem property tax revenue used
to fund a taxing jurisdiction’s budget to an amount equal to or
less than the amount from the prior year, as adjusted for
inflation, new construction, and certain bond payments.
Specifically, allowable increases in excess of the prior
year’s budget would be limited to increases associated with:
●The annual percentage increase of the Consumer
Price Index for All Urban Consumers in the
Midwest Region, as published by the Bureau of
Labor Statistics of the U.S. Department of Labor;
●The construction of new structures or
improvements or the remodeling or renovation of
existing structures or improvements, excluding
ordinary maintenance and repair; and
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
https://klrd.gov/ ●The payment of a bond issue approved at an
election held on or after July 1, 2025.
Any taxing jurisdiction adopting a budget in excess of
the funding limit would be required to do so by a roll call vote
of the governing body of the jurisdiction.
Any taxing jurisdiction not adopting its budget in a timely
fashion would be subject to the funding limit without the
requirement of a successful protest petition.
The funding limit provisions would not apply to the State
or to school districts.
Protest Petition
The bill would authorize the use of a protest petition to
contest any taxing jurisdiction budget that provides for
funding by property taxes in excess of the funding limit
provided for by the bill.
County treasurers would be required to maintain the
protest petitions upon notification by county clerks that taxing
jurisdictions approve a budget resulting in property taxes in
excess of the allowed amounts. Protest petitions would be on
standard forms provided by the Director of Accounts and
Reports. The county treasurer would be required to post on
the county website and social media, if such exists, the
availability of protest petitions.
Qualified voters of a taxing jurisdiction would have 30
days to sign a protest petition following the date the
jurisdiction’s governing body certifies to the county clerk the
amount of property tax to be levied. If qualified voters totaling
at least 10 percent of the votes cast for the office of U.S.
President in the most recent general election in the taxing
district sign the protest petition, the taxing jurisdiction would
be limited to a budget with property taxes from the prior year,
2- 35 as adjusted for inflation, new construction, and certain bond
payments, as described above.
If a taxing jurisdiction is required to amend its budget
pursuant to a successful protest petition, the governing body
of such taxing jurisdiction would be required to certify to the
county clerk by October 1 the amount of property taxes to be
levied.
The protest petition provisions would not apply in years
in which no transfer is made from the State General Fund
(SGF) to the Acknowledging Stewardship of Tax Revenue
and Appropriations (ASTRA) Fund.
Protest Petition Notices and Notification Costs Fund
The bill would require county clerks to provide protest
petition notices to each taxpayer with property in taxing
jurisdictions exceeding the funding limit provided for by the
bill including:
●An explanation of the protest petition process,
including the availability and location of protest
petitions, the deadline for signatures, website
information where the protest petition form is
available, and a phone number to call and request
a protest petition to be mailed, and the
consequences of a successful protest petition;
●The taxes levied of all taxing jurisdictions within the
county for the current and previous year;
●The difference between the previous and current
year tax levied expressed in dollars and
percentages; and
●A clear and conspicuous identification of any taxing
jurisdiction whose budget is subject to a protest
petition.
3- 35 The bill would require the notice to be in a format
prescribed by the Director of Accounts and Reports and
mailed to taxpayers unless the taxpayer and county clerk
have each consented in writing to the notice being delivered
by electronic means.
The bill would require the State to reimburse printing
and postage costs incurred by county clerks for protest
petition notices in 2025 and 2026 through payments from the
Protest Petition Notification Costs Fund (Costs Fund) of the
Department of Revenue, which would be created by the bill.
The bill would provide for transfers to be made from the
State General Fund to the Costs Fund upon the certification
of the amount of payments to be made from the Costs Fund.
The bill would require taxing jurisdictions included on the
notice to reimburse any costs incurred by county clerks that
are not reimbursed by the State.
ASTRA Transfers and Payments
The bill would create the ASTRA Fund. Under the bill,
any city or county adopting a budget financed with property
taxes equal to or less than the funding limit established by the
bill would receive payments from the Fund.
The bill would provide for $60.0 million to be transferred
to the Fund from the SGF by a demand transfer on or before
July 15. The transfer amount would increase by 2 percent per
year in future years.
The amount transferred to the Fund would be
apportioned across the counties, with 65 percent distributed
according to county population and 35 percent distributed
according to county assessed valuation.
The county government and each city government within
the county would receive, on or before January 15 following
4- 35 the transfer from the SGF to the Fund, a proportion of the
county’s apportionment based on the county or city’s total
assessed valuations used to calculate property taxes levied in
the preceding year. Counties and cities meeting the funding
limit requirement would be entitled to receive such payments,
whether the county or city met the funding limit requirement
as a result of a successful protest petition or the action of the
governing body of the county or city in adopting its budget.
The bill would require funds paid to cities and counties
to be used for services, including, but not limited to, roads
and bridges, law enforcement, elections, public health and
safety, or any other services mandated by law.
Any amounts not paid to cities or counties by virtue of
the taxing jurisdiction adopting property taxes in excess of the
allowed amount would be deposited in the State Treasury to
the credit of the SGF. The State Treasurer would be required
to report to the House Committee on Taxation and the Senate
Committee on Assessment and Taxation a list of cities and
counties receiving and not receiving payments from the Fund
by January 31 of each year.
Revenue Neutral Rate Repeal
The bill would repeal the revenue neutral rate provisions
requiring county clerks to send notices to taxpayers and
taxing subdivisions to hold hearings and vote on budgets
requiring a greater amount of property tax to be levied than
the previous year.
The bill would also repeal and abolish the Taxpayer
Notification Costs Fund, which is currently used to pay county
printing and postage expenses associated with revenue
neutral rate taxpayer notices.
5- 35 Statewide School Finance Mill Levy
The bill would reauthorize the statewide school finance
property tax levy at a rate of 20 mills for school years 2025-
2026 and 2026-2027.
Background
The House Committee of the Whole removed the
contents of the bill, concerning the elimination of state mill
levies for certain state building funds and the replacement of
revenue for those funds with transfers from the SGF, and
inserted the provisions of HB 2396, as amended by the
House Committee on Taxation, with further amendments:
●Establishing the Costs Fund and providing for the
mailing of protest petition notices and the
reimbursement of costs thereof;
●Providing for the payments from the ASTRA Fund
to cities and counties to be based on taxable
valuation within the tax districts rather than the
amount of tax levied by the districts;
●Requiring a roll call vote by taxing jurisdictions in
the adoption of a budget exceeding the funding
limit established by the bill; and
●Reauthorizing the statewide school finance mill
levy.
HB 2396
The bill was introduced by the House Committee on
Taxation at the request of Representative A. Smith.
6- 35 House Committee on Taxation
At the House Committee hearing, proponent testimony
was provided by representatives of the Kansas Association of
Counties, Kansas Association of School Boards, Kansas
Farm Bureau, Kansas School Superintendents’ Association,
and United School Administrators of Kansas. The proponents
generally stated the bill would eliminate revenue neutral
provisions, which sometimes confuse taxpayers, and provide
for property tax relief based on payments to local
governments and the ability for taxpayers to protest certain
tax increases by petition.
Written-only proponent testimony was provided by
representatives of the Johnson County Board of County
Commissioners, Kansas Legislative Policy Group, and
National Federation of Independent Business.
Neutral testimony was provided by a representative of
the League of Kansas Municipalities.
Written-only neutral testimony was provided by a
representative of the Saline County Board of County
Commissioners.
Written-only opponent testimony was provided by a
representative of the City of Overland park, generally stating
the bill would enable a minority of the citizens of a taxing
jurisdiction to block a budget that might be approved by a
majority of the citizens.
No other testimony was provided.
The House Committee amended the bill to:
●Change the protest petition threshold from 10
percent of the number of votes cast in the most
recent Secretary of State general election to 10
percent of the number of the votes cast in the most
recent general election for U.S. President;
7- 35 ●Exclude property tax revenues dedicated to paying
bond issues approved after July 1, 2025, from the
calculation of property taxes triggering the protest
petition opportunity and excluding the taxing
jurisdiction from payments from the ASTRA Fund;
●Require annual reporting from the State Treasurer
of a list of cities and counties receiving and not
receiving payments from the ASTRA Fund;
●Require the Director of Accounts and Reports to
provide a standard protest petition form; and
●Require protest petition availability to be posted on
existing county social media.
[Note: Senate Sub. for HB 2396, as recommended by
the Senate Committee on Assessment and Taxation, would
create a property tax funding limit in cases of successful
protest petitions, provide for the delivery of notices for such
protest petitions, and make changes to the form required to
be used for revenue neutral rate notices.]
Fiscal Information
According to the fiscal note on HB 2396, as introduced,
the bill would increase SGF expenditures by $60.0 million in
FY 2026, $61.2 million in FY 2027, and $62.4 million in FY
2028. For budgetary purposes, demand transfers are
considered expenditures from the fund from which moneys
are being transferred out.
According to the Department of Revenue, transfers to
the Costs Fund would reduce SGF receipts by $1.4 million
per year in FY 2026 and FY 2027.
The Department of Revenue and State Treasurer
indicate the costs of implementation of the bill are negligible
and could be absorbed within existing resources.
8- 35 The Kansas Association of Counties and League of
Kansas Municipalities indicate enactment of the bill would
have an indeterminate fiscal effect on local governments.
Any fiscal effect associated with enactment of the bill is
not reflected in The FY 2026 Governor’s Budget Report.
Taxation; property tax; protest petition; revenue neutral rate; notices; transfers;
ASTRA Fund; Protest Petition Notification Costs Fund; mill levies; school finance mill
levy
9- 35