Kansas Attorney General Opinion 2013-008

April 12, 2013
ATTORNEY GENERAL OPINION NO. 2013-08
Linus A. Thuston
Neosho County Attorney
102 S. Lincoln, P.O. Box 370
Chanute, KS 66720
David S. Brake
Chanute City Attorney
101 W. Main St.
Chanute, KS 66720
Re: 	Cities 	and 	Municipalities—Buildings, 	Structures 	and 	Grounds—Downtown
Redevelopment Act; Taxation of Real Property Approved for Tax Benefits;
Rebate of Property Tax Increments to Taxpayers
Synopsis: 	For purposes of the Kansas Downtown Redevelopment Act, the “tax
increment” includes all additional real property taxes attributable to the
increase in value of the improved property, not just those additional taxes
that would have been paid to the city. Cited herein: K.S.A. 2012 Supp. 12-
17,121; 12-17,122; 12-17,123; 12-17,124; 12-17,125; 79-1439.
* 	* 	*
Dear Mr. Thuston and Mr. Brake:
As the Neosho County Attorney and Chanute City Attorney, respectively, you ask
whether the tax rebate payable to a property owner under the Kansas Downtown
Redevelopment Act1 includes all additional property taxes generated by the increased
value of improved real property or only the portion of the additional taxes that would
have been paid to the city, as opposed to other taxing entities such as the school district
and county.
1 K.S.A. 2012 Supp. 12-17,121 et seq.

Linus Thuston and David Brake
Page 2
Under the Kansas Downtown Redevelopment Act (“the Act”), the governing body of a
city may apply to the Secretary of the Kansas Department of Commerce for the
establishment of a downtown redevelopment area. 2 If the Secretary of Commerce
approves the application, 3 a property owner within the downtown redevelopment area
may receive tax rebates by making an investment in improvements “the value of which
is equivalent to or exceeds 25% of the appraised value of the property.”4
These tax rebates are based on the “tax increment generated by the improvement.”5
The Act defines “tax increment” as “all real property taxes assessed pursuant to K.S.A.
79-1439, and amendments thereto, to the amount of the current appraised value of the
property in excess of the base year appraised value of the property located within a
redevelopment area or proposed redevelopment area.” 6 In other words, “tax increment”
refers to the additional taxes attributable to the increase in value of the improved
property.
You inform us that the City of Chanute has established a downtown redevelopment area
in accordance with the Act. 	A property owner recently came forward after making the
required improvements and was approved for tax rebates. 	However, you are unsure
whether these rebates should consist of all increased real property taxes generated by
the improvements or only the portion of the increased taxes that would have been paid
to the city.
When 	interpreting 	statutes, 	we 	presume 	“that 	the 	legislature 	expressed 	its 	intent
through 	the 	language 	of 	the 	statutory 	scheme.”7 If 	the 	language 	is 	plain 	and
unambiguous, the statute should be interpreted as written. “Only when the language of
a statute is unclear or ambiguous” is it appropriate to “move to the next analytical step,
applying canons of construction or relying on legislative history to construe the statute.”8
The language of the Act is clear and unambiguous with respect to the question you ask.
The Act provides that:
The tax increment generated by the improvement shall be credited to the
fund created by a governing body . . . for the purpose of returning all or
part of the property tax increment to the taxpayer in the form of a rebate of
100% each year in years one through five, 80% in year six, 60% in year
seven, 40% in year eight and 20% in year nine. 	No rebate shall be paid
on or after the tenth year. 9
2 K.S.A. 2012 Supp. 12-17,123(a). An unincorporated area of a county may also establish a downtown
redevelopment area, but your question relates to cities.
3 The statutory criteria for approval are specified in K.S.A. 2012 Supp. 12-17,123(b).
4 K.S.A. 2012 Supp. 12-17,124(b).
5 K.S.A. 2012 Supp. 12-17,125.
6 K.S.A. 2012 Supp. 12-17,122(i).
7 Unruh v. Purina Mills, LLC, 289 Kan. 1185, 1193-94 (2009).
8 Id. at 1194.
9 K.S.A. 2012 Supp. 12-17,125.

Linus Thuston and David Brake
Page 3
This section clearly states that in years one through five, the entire “tax increment” is to
be refunded to the property owner. The answer to your question, therefore, turns on the
definition of “tax increment.”
As we previously noted, the Act defines “tax increment” to include “all real property
taxes” generated by improvements to the property. 10 In our opinion, the phrase “all real
property taxes” cannot reasonably be interpreted as referring to only a portion of the
additional property taxes, namely those that would have been paid to the city. 	To be
sure, the “tax increment” only includes taxes “assessed pursuant to K.S.A. 79-1439, and
amendments thereto.” 	But K.S.A. 2012 Supp. 79-1439 simply provides the method for
calculating assessed valuation; it draws no distinction between property taxes payable
to the city and property taxes payable to other government entities.
Accordingly, we opine that for purposes of the Kansas Downtown Redevelopment Act,
the term “tax increment” includes all additional real property taxes attributable to the
increase in value of the improved property. When a property owner has been approved
for tax benefits under the Act, this tax increment should be returned to the property
owner in the percentages specified by K.S.A. 2012 Supp. 12-17,125.
Sincerely,
Derek Schmidt
Attorney General
Dwight Carswell
Assistant Attorney General
DS:AA:DC:sb
10 K.S.A. 2012 Supp. 12-17,122(i); see also K.S.A. 2012 Supp. 12-17,122(g) (“‘real property taxes’ means
all taxes levied on an ad valorem basis upon land and the improvements thereon”).