If a Kansas county clerk forgets to mail the revenue neutral rate notice on time, can the taxing district still raise taxes above that rate?

Plain-English summary

A state representative asked whether a city, county, or other taxing subdivision could still levy a tax rate above the "revenue neutral rate" (the rate that would raise the same total property tax revenue as the prior year, before accounting for higher valuations) if the county clerk simply failed to mail the required notice to taxpayers on time. K.S.A. 79-2988(b) sets up a multi-step process before a taxing subdivision can exceed that rate, including a requirement that the county clerk notify each taxpayer in the subdivision by mail at least 10 days before a public hearing on the proposed higher rate.

The Attorney General concluded the clerk's notice duty is mandatory, so a missed or late notice blocks the taxing subdivision from exceeding the revenue neutral rate at all, no matter what steps the taxing subdivision's own governing body took. The opinion reasoned through several markers courts use to tell whether "shall" is mandatory or merely directory: the same statute deliberately uses "may" elsewhere (for example, letting the clerk choose to send notice electronically instead of by mail, or letting a hearing be combined with the budget hearing), showing the Legislature knew how to grant discretion when it wanted to; the statute also imposes a real consequence for noncompliance, requiring a refund of any taxes collected above the revenue neutral rate if the process wasn't properly followed, and a "shall" duty backed by a penalty is a strong sign of mandatory intent. The opinion also invoked the canon that tax statutes are construed strictly in favor of the taxpayer, reinforcing the mandatory reading. Because the notice step is mandatory and it is the county clerk, not the taxing subdivision's own governing body, who is responsible for sending it, a clerk's failure to timely mail the notice defeats the whole process regardless of the taxing subdivision's own good-faith compliance with its own steps.

What this means for you

County clerks: the opinion holds your duty to mail the taxpayer notice under K.S.A. 79-2988(b)(2) at least 10 days before the public hearing is mandatory, not a best-practices guideline; missing that deadline blocks every taxing subdivision in the county from exceeding the revenue neutral rate that year, regardless of what the subdivision's governing body did.

City councils, school boards, and other taxing subdivision governing bodies: the opinion signals that even if you follow every one of your own procedural steps correctly, a late or missed notice from the county clerk can still prevent you from exceeding the revenue neutral rate, and any excess revenue collected would have to be refunded to taxpayers.

Taxpayers and property owners: the opinion confirms that if your county clerk did not mail the required 10-day notice before a revenue-neutral-rate hearing, you have a basis to argue the taxing subdivision's excess levy was unlawful and must be refunded.

Common questions

What happens if a taxing subdivision exceeds the revenue neutral rate without proper notice?
According to the opinion, the governing body "shall refund to taxpayers any property taxes over-collected based on the amount of the levy that was in excess of the revenue neutral rate," under K.S.A. 79-2988(c)(1).

Does the county clerk have any flexibility in how the notice is delivered?
Yes, but only in the method, not whether notice happens at all; the opinion notes the clerk may send the notice electronically instead of by mail if the taxpayer and clerk have both consented in writing to electronic service.

Why does it matter that the same statute uses both "shall" and "may"?
Because courts read "shall" as mandatory more confidently when a statute also uses "may" elsewhere for genuinely optional choices, according to the opinion; the contrast shows the Legislature knew how to grant discretion and chose not to for the notice requirement.

Background and statutory framework

K.S.A. 79-2988(b) bars a taxing subdivision's governing body from levying a tax rate above the revenue neutral rate unless it follows a specific procedure: notifying the county clerk of its intent, holding a public hearing between August 20 and September 20, and, critically, having the county clerk mail each taxpayer in the subdivision a notice of the proposed rate increase at least 10 days before that hearing. K.S.A. 79-2988(c) imposes a refund remedy if a governing body exceeds the revenue neutral rate without following subsection (b)'s requirements.

The opinion applied established Kansas canons for interpreting "shall": it is presumptively mandatory, especially when it affects taxpayer rights, when the statute pairs mandatory language with a specific penalty or consequence for noncompliance, and when the same statute uses "may" in other places to signal genuine discretion. Because K.S.A. 79-2988 checks all three boxes for the clerk's notice duty, and separately because tax statutes are construed strictly in favor of the taxpayer under Kansas case law, the opinion concluded the notice requirement is mandatory, meaning a missed notice deadline defeats the entire authorization to exceed the revenue neutral rate for that tax year.

Citations and references

Statutes:
- K.S.A. 79-2988(b) (incl. (b)(2), (b)(3)); (c)(1)-(2)

Cases:
- State v. Raschke, 289 Kan. 911, 219 P.3d 481 (2009)
- In re BHCMC, L.L.C., 307 Kan. 154 (2017)
- Paul v. City of Manhattan, 212 Kan. 381, 511 P.2d 244 (1973)

Source

• Landing page: https://www.ag.ks.gov/reports-resources/ag-opinions
• Original PDF: https://www.ag.ks.gov/home/showpublisheddocument/10502/638460984370170000

Original opinion text

September 7, 2023

ATTORNEY GENERAL OPINION NO. 2023-8

The Honorable John R. Eplee
State Representative, 63rd District
State Capitol, Room 352-S
Topeka, Kansas 66612

Re: Taxation—Miscellaneous Provisions—Budgets of Taxing Subdivision—
Tax Levy; Approval to Exceed Revenue Neutral Rate by Taxing
Subdivisions; Requirements; Notices and Contents

Synopsis: K.S.A. 79-2988(b)(2)'s use of "shall" is mandatory. As a result, a
governing body of a taxing subdivision may not levy a tax rate in
excess of the revenue neutral rate where the county clerk fails to
timely send out the required notice to the taxpayers pursuant to K.S.A.
79-2988(b)(2). Cited herein: K.S.A. 79-2988.

                         *             *            *

Dear Representative Eplee:

As the Representative of the 63rd District, you ask whether taxing subdivisions
may levy a tax rate in excess of the revenue neutral rate per K.S.A. 79-2988 if the
county clerk fails to timely send the required notice pursuant to K.S.A. 79-
2988(b)(2). Considering the plain language of the statute and utilizing the rules of
statutory construction, the answer is no. Doing so would violate the mandatory
procedures in subsection (b). K.S.A. 79-2988(b) states that "[n]o tax rate in excess of
the revenue neutral rate shall be levied by the governing body of any taxing
subdivision" unless the specific procedures of subsection (b) are followed. Among
those procedures is that "the county clerk shall notify each taxpayer with property
in the taxing subdivision of the [proposal] to exceed the revenue neutral rate at

least 10 days"1 before a statutorily required public hearing. So, the county clerk's
timely notification is necessary for a taxing subdivision to exceed the revenue
neutral rate. And any governing body that did so anyway would have to refund the
money taken in excess of the revenue neutral rate.2

Answering your question requires construing K.S.A. 79-2988. Statutory
interpretation begins with the text of the statute, giving words their ordinary,
everyday meanings. Only when the language is ambiguous are canons of statutory
construction, legislative history, or other background information employed to
discern the statute's meaning.3

The statute states the governing body of a taxing subdivision shall not levy a tax
rate in excess of the revenue neutral rate unless a resolution or ordinance is
approved by the governing body after following specific procedures.4 Subsection
(b)(2) requires the governing body to notify the county clerk of its proposed intent to
exceed the revenue neutral rate and the date, time, and location of the public
hearing and the proposed tax rate.5 Then subsection (b)(2) directs: "For all tax years
commencing after December 31, 2021, the county clerk shall notify each taxpayer
with property in the taxing subdivision, by mail directed to the taxpayer's last
known address, of the proposed intent to exceed the revenue neutral rate at least 10
days in advance of the public hearing."6 The public hearing is required to be held
between August 20 and September 20.7

Thus, the crux of your question depends on the meaning of "shall" as used in
subsection (b)(2). Mandatory words impose a duty while permissive words grant
discretion. "The traditional, commonly repeated rule is that shall is mandatory and
may is permissive."8 In Kansas, "[t]he word shall ordinarily connotes an obligatory
meaning, although courts sometimes treat the word as directory when the context
suggests as much."9

Because "shall" lacks a plain meaning, statutory construction is required.10 The
context of the statutory scheme and case law is ultimately determinative."11 "Shall"

1 K.S.A. 79-2988(b)(2).
2 K.S.A. 79-2988(c)(1)-(2).
3 Nauheim v. City of Topeka, 309 Kan. 145, 149-50, 432 P.3d 647 (2019).
4 K.S.A. 79-2988(b).
5 K.S.A. 79-2988(b)(2).
6 Id.
7 K.S.A. 79-2988(b)(3).
8 Antonin Scalia & Bryan A. Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 112

(2012).
9 Walker v. Brizendine, No. 114,776, 2016 WL 5012505, at *2 (Kan. App. 2016) (unpublished opinion)

(citing Ambrosier v. Brownback, 304 Kan. 907, 912-15 [2016]; Hawley v. Kansas Dept of Agriculture,
281 Kan. 603, 618 [2006]; Scalia & Garner, supra, at 112-15); see State v. Raschke, 289 Kan. 911,
914-15, 219 P.3d 481 (2009).
10 Raschke, 289 Kan. at 914-15.
11 Id. at 920.

provisions affecting a party's rights are more likely to be construed as mandatory.12
Statutory provisions dealing with form or procedure may be considered mandatory
if "accompanied by negative words importing that the acts required shall not be
done in any other manner or time that that designated."13 Statutes containing a
penalty provision or other consequence of noncompliance are considered
mandatory.14

"[W]hen the word shall can reasonably be read as mandatory, it ought to be so
read."15 And here, given the context, that is indeed the best reading. The
Legislature used "shall" throughout the text, but it also uses "may" to refer to other
functions, showing that the Legislature differentiated between mandatory and
discretionary duties in K.S.A. 79-2988. K.S.A. 79-2988(b)(2) goes on to provide:
"Alternatively, the county clerk may transmit the notice to the taxpayer by
electronic means at least 10 days in advance of the public hearing, if such taxpayer
and county clerk have consented in writing to service by electronic means"
(emphasis added). In other words, while the county clerk "shall" notify the taxpayer,
the statute gives discretion to send the notification electronically, given certain
conditions are met. Additionally, while K.S.A. 79-2988(b)(3) states when a public
hearing shall be conducted and that taxpayers must be given the opportunity to
present oral testimony, the provision also provides that the public hearing "may"
be conducted in conjunction with the proposed budget hearing if the governing body
otherwise complies with all requirements of the section. In other words, the
Legislature knew how to differentiate between mandatory and discretionary duties
in K.S.A. 79-2988.

The statute also contains a consequence/penalty for the governing body of a taxing
subdivision that does not comply with subsection (b), stating the governing body
"shall refund to taxpayers any property taxes over-collected based on the amount of
the levy that was in excess of the revenue neutral rate."16 But if subsection (b) was
entirely discretionary, it's hard to see what the point of that penalty would be.

Other canons of construction point in this direction too. Applicable here, "statutes
that impose the tax are to be construed strictly in favor of the taxpayer."17 Under
this rule of thumb, the use of "shall" in K.S.A. 79-2988 should be construed in favor
of the taxpayer. This means reading "shall" as mandatory, rather than
discretionary, because failure to comply would run in the taxpayer's favor under the
disgorgement requirement of subsection (c)(1).

12 Id.
13 Shriver v. Bd. of Cty. Comm'rs, 189 Kan. 548, 556, 370 P.2d 124 (1962).
14 Paul v. City of Manhattan, 212 Kan. 381, Syl. ¶ 2, 511 P.2d 244 (1973).
15 Scalia & Garner, supra, at 114.
16 K.S.A. 79-2988(c)(1).
17 In re BHCMC, L.L.C., 307 Kan. 154, 161 (2017).

Thus, the statutory context and the canon requiring statutes imposing taxes to be
strictly construed in favor of the taxpayer both point to the notice requirement as
mandatory. Because it is mandatory, the failure by the county clerk to provide
statutorily sufficient notice results in the failure of all the procedures in subsection
(b) being met. A governing body cannot exceed the revenue neutral rate unless
subsection (b) is satisfied.18 Thus, a county clerk's failure to send out the required
notice prevents a jurisdiction from exceeding the revenue-neutral tax rate.

                                     Sincerely,



                                     /s/ Kris Kobach
                                     Kris W. Kobach
                                     Kansas Attorney General


                                     /s/ Ryan J. Ott
                                     Ryan J. Ott
                                     Assistant Solicitor General

18 K.S.A. 79-2988(b).