Chairperson Smith opened the hearing for HB2440.

Adam Siebers provided an overview for HB2440 that would provide oil leases that are currently exempt from property taxation, would not be required to file with Board of Tax Appeals in order to receive the property tax exemption. (Attachment 10)

Mr. Siebers stood for questions from Committee members.

Kathleen Smith provided  an overview on the fiscal note for HB2440 stating the Kansas Department of Revenue estimates the bill would have no fiscal effect on state and local property tax revenues or oil severance tax revenues. The Board of Tax Appeals (BOTA) estimates the bill would reduce revenues to the BOTA Filing Fee Fund by $368,000 in FY 2027 and in each fiscal year.  

Ms. Smith stood for questions from Committee members.

Proponents:

Rachelle Standley, RMA, Graham, Sherman and Thomas County Appraiser, and also on the Kansas County Appraisers Association Oil and Gas Committee testified as a proponent for HB2440 stating the bill is not a complete tax exemption and the override and royalty owners pay taxes on the production.  The exemption is just for the operator, which is the taxpayer.  Ms Standley stated in Kansas, taxation is the rule and exemption is the exception noting when a lease doesn't qualify for the five barrels or less, or sells, or something happens with the lease when it doesn't qualify, the exemption is terminated and the new owner or current owner has to reapply. (Attachment 11)

Ms. Standley stood for questions from Committee members.

Kim Frodin speaking on behalf of KCAA Oil and Gas Committees testified as a proponent for HB2440 that allows County Appraisers the ability to exempt low production leases as defined by K.S.A. 79-201t.  The bill would provide a basic mathematical equation if a lease qualifies for the exemption; would alleviate the backlog of filing on the BOTA docket; would eliminate redundant filings on the sale lease; and minimal tax dollars would be affected by HB2440. (Attachment 12)

Ms. Frodin stood for questions from Committee members.

Written proponent testimony for HB2440 was submitted by Jason P. Watkins, Kansas Independent Oil & Gas Association. (Attachment 13)

There being no opponent or neutral testimony submitted, Chairperson Smith closed the hearing for HB2440.