Kansas Governor Sam Brownback has signed into law legislation that reorganizes the State Court of Tax Appeals and makes significant changes to the state’s process for deciding property valuation disputes. Governor Brownback signed Senate Bill 231 on May 14, 2014. It takes effect on July 1, 2014.
Under the bill, the State Court of Tax Appeals (“COTA”) will become an administrative agency known as the State Board of Tax Appeals (“BOTA”) and be subject to certain new restrictions and requirements. Significant changes to the state’s property valuation and appeals process made by the bill include:
- Repealing the state’s current requirement that the taxpayer post a bond of 125% of assessed tax when a property tax valuation is being appealed.
- Giving taxpayers the right to appeal BOTA orders to either a district court or the Kansas Court of Appeals, and eliminating the existing requirement to request reconsideration of a final decision before seeking judicial review.
- Updating the version of the Appraisal Foundation’s professional appraisal standards that are to be followed in Kansas. Current law requires the state to follow the version that was in effect as of March 1992, but the bill changes that to be the most current version.
- Prohibiting an increase in valuation, for a two-year period, of certain real property where the value was reduced by a final determination made pursuant to the valuation appeals process, unless substantial and compelling reasons have been documented by the appraisers.
The bill also changes certain procedures and requirements of the BOTA. For example, it
- Expedites the time for issuing decisions. Currently, the COTA has 120 days from the date a matter was finally submitted to render a final order. The bill requires that the BOTA render and serve summary written decisions within 14 days, subject to extensions for good cause. Taxpayers may request that a full and complete BOTA opinion be issued within 90 days.
- Directs the BOTA to conduct all proceedings in a fair and impartial manner, affording all taxpayers a neutral interpretation of state tax laws. The bill provides that BOTA decisions may not be based on arguments concerning the shifting of tax burdens or revenue losses or gains.
- Expands the small claims division’s authority. Currently, the division can hear matters involving maximum appraised valuations of $2 million. The bill increases that to $3 million. It also bars the use of any BOTA employee as a hearing officer in the division and permits notices of appeals to be signed by either the taxpayer or the taxpayer’s representative.
- Restricts the BOTA generally from determining who may sign appeals forms or represent taxpayers. It also prohibits the BOTA from making determinations as to what constitutes the unauthorized practice of law, or whether contingency fee agreements are permitted. The BOTA also may not impede an agreement or settlement between a county and a taxpayer.
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