Georgia Department of Revenue PROPERTY TAX LEGISLATIVE UPDATE Vicki Lambert Phil Hogsed, Cobb County Chief Appraiser July 20, 2009 Georgia Department of Revenue • Local Government Services Field Staff: – Wayne Blackwelder – Kenny Colson – Grant Hilton – Mark Loyd – Gregg Reese – Don Sheppard – Tracy Thomas – Zachary Young Georgia Department of Revenue Georgia Department of Revenue HOUSE BILL 143 • Amends Title 36 and 45 regarding „Homeowners Tax Relief Grants‟ • For FY 2009 state budget (2008 Tax Digest) - funds shall be appropriated and shall not be reduced or withdrawn. • For FY 2010 and future state budgets – no appropriation unless estimated revenues exceed appropriation. Georgia Department of Revenue House Bill 143 • When funds are not available, counties are not allowed to include a notice on the bill regarding the unavailability of the credit • Effective Date: Signed By Governor on 02/17/2009 • Act #1 Georgia Department of Revenue HOUSE BILL 233 • Amends Title 48 to provide for a moratorium on ad valorem tax assessment valuation increases. – New O.C.G.A. § 48-5B-1 • The General Assembly finds that property owners are experiencing a crisis in the reduction of value of unprecedented magnitude. Georgia Department of Revenue House Bill 233 • Beginning January 1, 2009. • Ending Sunday before second Monday in January 2011. • Moratorium on all increases in the assessed value of all classes of all subjects of property … Georgia Department of Revenue House Bill 233 – Applies to County, County School, Municipal, Independent School, Special Districts, and State. – Applies to: • Real – all classes (RACI) • Personal Georgia Department of Revenue House Bill 233 • Exceptions: – Corrections of any manifest, factual error or omission in the valuation of property. – Limitations take effect January 1 2010 for counties that performed or had performed a Comprehensive County-Wide Revaluation of all properties in the county in 2008. – Limitations take effect January 1, 2010 for any county which in 2009 was under contract prior to February 28, 2009 to have performed on its behalf a Comprehensive County-Wide Revaluation of all properties in the county. Georgia Department of Revenue House Bill 233 • Comprehensive County-Wide Revaluation Plan • A plan by county tax officials for revaluing all real and personal property within the county that is being or has been implemented: – Pursuant to a contract executed and effective prior to February 20, 2009 – Without the assistance of third-party appraisers or appraisal firms under contract for such purpose, if such plan was formally adopted by county tax officials prior to January 1, 2009. – But shall not include any plan that requires or required the inclusion of non-consecutive tax years in order to be completed Georgia Department of Revenue House Bill 233 Nothing in this Code section shall be construed to prohibit the assessed value of property from decreasing. – Values cannot be increased at all during moratorium; once a value is decreased, a new ceiling is established Georgia Department of Revenue House Bill 233 • Properties which are sold or transferred: – Assessed value shall not be increased. • Additions and Improvements: – Shall be valued at FMV and addition/improvement value shall be added to owners base year value. • Rezoned, Subdivided or Combined: – When use is also changed to conform with rezoning, subdivision or combination, the property shall be valued at its fair market value. Georgia Department of Revenue House Bill 233 • Nothing in this Code section shall be construed to alter or affect in any manner the authority granted to the General Assembly under the Constitution to enact Homestead. Georgia Department of Revenue House Bill 233 • The provisions of the Chapter shall not apply to the real property in any county for which a local constitutional amendment has been continued in force and effect as part of the Constitution which imposes millage rate limitations regarding ad valorem property taxes for county or county school district, unless the constitutional amendment is repealed. – Houston County – Richmond County Georgia Department of Revenue House Bill 233 • The Revenue Commissioner shall continue to examine and review county tax digests: – In the event a deficiency is attributable directly to the limitations of this Code section, no penalties shall be levied. • Additional State Tax is not a penalty • 48-5-346 defines penalties : $5/parcel, etc Georgia Department of Revenue House Bill 233 • Consolidation sheets (PT-10A) with billing values (moratorium values) • Consolidation sheets (PT-10A) showing value if computed without regard to limitations imposed by O.C.G.A. § 48-5B-1 Georgia Department of Revenue House Bill 233 • Bottom Line – Real property -- add value of new construction – Personal property – add value of new assets Georgia Department of Revenue HOUSE BILL 304 • Amends 48-5-48: – The unremarried surviving spouse or minor children of any disabled veteran shall also be entitled to an exemption … on a homestead, or any subsequent homestead within the same county, where such spouse or minor children continue to occupy the home as a homestead… – Effective May 4, 2009 Georgia Department of Revenue HOUSE BILL 304 • Amends 48-5-264.1: – Chief appraiser, county appraisal staff, authorized agents of county BTA and members of BTA may go upon property outside buildings. – Shall carry identification. – Shall not enter upon property unless reasonable notice has been provided to the owner/occupant. Georgia Department of Revenue House Bill 304 Reasonable Notice?? – Insert in Water Bill – Publish on website – Publish in newspaper – Use Government Cable Channel Georgia Department of Revenue HOUSE BILL 304 • Reasonable Notice – Provide notice to taxpayer when: • filing return • filing appeal – Prepare a notice for building permit department to give taxpayer at time building permit is issued – Follow DOT guidelines Georgia Department of Revenue HOUSE BILL 304 • Tax Commissioner shall include statement on tax bill and on official website regarding taxpayer‟s right to file return. Georgia Department of Revenue HOUSE BILL 318 • Amends 48-5-444: – If a passenger car or truck is primarily used in connection with some established farm operation, by a family-owned-farm-products- producer, located in a county other than the county where the owner claims homestead, such car or truck shall be returned in the county where the farm is located. Georgia Department of Revenue HOUSE BILL 318 • Amends 48-5-506.1: – Heavy Duty Equipment Exemption – Beginning January 1, 2010 and ending December 31, 2010. – Does not apply to Publicly Traded Companies; Heavy Equipment Dealers and Persons/Entities in year of Purchase. – Exemption of assessed value up to $100,000 per entity state wide – New Exemption code: SY Georgia Department of Revenue HOUSE BILL 482 • Amends/Adds 48-5-41.2: – All tangible personal property constituting the inventory of a business shall be exempt from state ad valorem taxation. – Constitutional Amendment to be placed on general statewide ballot. – New Exemption Code: SN Georgia Department of Revenue SENATE BILL 55 • Amends 48-5-2: The tax assessor shall consider the following criteria in determining the fair market value of property. (in addition to: use, zoning, deed restrictions, other factors) – Foreclosure sales, bank sales, other financial institution owned sales or distressed sales, or any combination thereof of comparable real property. • Property characteristics and condition considerations still apply in selection of comparables – Decreased value of the property based on limitations and restrictions resulting from the property being in a conservation easement. – Effective January 1, 2009. Georgia Department of Revenue SENATE BILL 55 • A foreclosure is a complex legal process, not a sale. Black’s Law Dictionary (2001) defines foreclosure as: – A legal proceeding to terminate a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property. Georgia Department of Revenue SENATE BILL 55 • Real Estate Owned (REO) – A sale of property formerly foreclosed on by a financial institution (the seller is the financial institution). – (REOs can include bank-owned property, which is not included in this discussion). Georgia Department of Revenue SENATE BILL 55 • Deed in Lieu of Foreclosure “Soft sale," Mortgagee and the mortgagor have agreed that "in lieu" of being foreclosed upon the seller executes warranty deed to lender. Total purchase price is the amount of the loan in default, plus associated fees. Lender does not incur the costs and time incurred in the foreclosure process. Sale is not exposed to open market Georgia Department of Revenue SENATE BILL 55 • Short Sale – A pre-foreclosure sale – Bank or mortgage lender discounts loan balance due to economic or financial hardship on the part of the mortgagor – Sale negotiated in which a lender takes less than the total amount due. Georgia Department of Revenue SENATE BILL 55 • Use of Foreclosure-related sales in a ratio study will require: – careful evaluation of subject sale to the validation process. – Adjust foreclosure-related sale prices to more accurately reflect market norms and condition of property at time of sale. Georgia Department of Revenue SENATE BILL 55 • Validation Process: – Ascertain the condition of the property on the date of sale – What changes have occurred to the property since the last assessment? • Did previous owners damage property • Has property been vandalized – If unable to determine the condition at the time of sale, including this sale may skew the results of the ratio study, if included. Georgia Department of Revenue SENATE BILL 55 • Validation Process (cont‟d) –Condition of the property should be considered for future valuations –Was personal property included in the sale – If so, was the personal property listed separately in the bill of sale or the purchase agreement? Georgia Department of Revenue SENATE BILL 55 • Factors to consider: – What affect are foreclosures having on arm‟s length transactions in your county? • Be Prepared: – To explain the local real estate market • All markets are not affected to the same extent • Be prepared to talk with taxpayers about your specific market area – They will be armed with newspaper articles, etc. Georgia Department of Revenue SENATE BILL 55 •Additional change to 48-5-2 • The tax assessor shall consider the following criteria in determining the fair market value of property • Decreased value of the property based on limitations and restrictions resulting from the property being in a conservation easement. Georgia Department of Revenue SENATE BILL 55 • Determine the rights conveyed – Affect on FMV because this right – normally development rights – were conveyed. Georgia Department of Revenue SENATE BILL 55 • Amends 48-5-7.7: – For tax year January 1, 2009 applications for FLPA shall be filed on or before June 1. – For tax year January 1, 2010 and future all applications shall be filed on or before last day for filing ad valorem tax returns, except in the case of property which is the subject of reassessment, FLPA may be filed in conjunction with or in lieu of an appeal. – Effective January 1, 2009 Georgia Department of Revenue SENATE BILL 55 • Amends 48-5-274: – The Department of Audits and Accounts shall use the Standard on Assessment Ratio Studies published by IAAO to determine the valid transactions necessary to establish the measure of central tendency. – Provided that standard shall only be used to the extent it does not conflict with criteria enumerated in subparagraph (B) of paragraph (3) of Code section 48-5-2. – Effective January 1, 2009. Georgia Department of Revenue SENATE BILL 55 • Amends 48-5-306: The board shall see that all taxable property within the county is assessed and returned at its FMV… – When any corrections or changes including valuation increases or decreases or equalizations have been made, the board shall give written notice… – Effective January 1, 2009 Georgia Department of Revenue SENATE BILL 240 Effective date – April 29, 2009 Amend/Add 48-5-311(f)(4): At option of taxpayer, an appeal may be submitted to binding Arbitration. Taxpayers written notice of arbitration shall state grounds (value) for arbitration. Shall be filed within 45 days of notice of value (30 days in installment billing counties) Georgia Department of Revenue Senate Bill 240 – Prior to appointment of Arbitrator and within 30 days of filing the notice of appeal, the taxpayer shall provide a copy of the value certified by a professional real estate appraiser, as classified by the Georgia Real Estate Appraisers Board. – If within 30 days of receiving taxpayers certified appraisal, the BTA accepts the taxpayers appraisal, the value shall become final. Georgia Department of Revenue Senate Bill 240 – If BTA rejects taxpayer‟s appraisal, the BOA shall certify within 30 days the appeal to the Clerk of Superior Court. • Who pays the filing fee? – BTA must certify all papers specified by taxpayer including staff papers used by BOA. – Within 15 days of filing certification to Clerk of Superior Court, the judge shall issue order authorizing the arbitration. Georgia Department of Revenue Senate 240 • Procedure – Choosing Arbitrator: • Parties may agree to single arbitrator of their choice. • If no agreement, arbitrator is chosen by chief judge of Superior Court. Georgia Department of Revenue Senate Bill 240 • Procedure – Qualified Arbitrators: • State Certified General Property appraiser pursuant to the rules and regulations of the Georgia Real Estate Appraisers Board. • Shall have experience or expertise in appraising the type of property that is subject of arbitration. Georgia Department of Revenue Senate Bill 240 • Procedure – Timing: • Within 30 days of appointment, the arbitrator shall set a time and place to hear evidence and testimony from both parties. • Notice of hearing shall be given personally, by registered or certified mail or statutory overnight delivery, not less than 10 days before scheduled hearing. • The arbitrator may adjourn or postpone the hearing. • Chief judge may direct arbitrator to proceed promptly upon request by either party. Georgia Department of Revenue Senate Bill 240 • Procedure – Hearing: • Parties shall be entitled to be heard and present documents, testimony and to cross-examine witnesses. • Arbitrator may make determination based on documents, testimony and other matters produced notwithstanding the failure of one party duly notified to appear. Georgia Department of Revenue Senate Bill 240 • Procedure – Records: • Arbitrator shall maintain a record of all pleadings, documents, testimony, and other matters introduced at the hearing. • The arbitrator or any party to proceedings may have the proceedings transcribed by a court reporter. Georgia Department of Revenue Senate Bill 240 • Procedure – Waiver: • The provisions of this paragraph may be waived at any time by written consent of the taxpayer and the board of tax assessors. Georgia Department of Revenue Senate Bill 240 • Procedure – Decision: • Within 30 days of date of hearing, the arbitrator shall render a decision regarding the value. • The arbitrator shall consider a single value for the property submitted by the BTA; and a single value submitted by the taxpayer‟s appraiser. • The arbitrator shall consider the single values and other supporting evidence; and shall determine which value is the value for the property. Georgia Department of Revenue Senate Bill 240 • Procedure – Cost of Arbitrator: • If the taxpayer‟s value is upheld by the arbitrator, the county shall be responsible for the fees and costs of such arbitrator. • If the BTA‟s value is upheld by the arbitrator, the taxpayer shall be responsible for the fees and costs of such arbitrator. Georgia Department of Revenue Senate Bill 240 • Procedure – Burden of Proof: • The board of tax assessors shall have the burden of proving its opinion of value and the validity of its proposed assessment by a preponderance of evidence. Georgia Department of Revenue Senate Bill 240 • Procedure – Freezing the Assessment: • The provision of 48- 5-299(c) shall apply to the valuation rendered by the arbitrator. – Also applies to non- binding Arbitration Georgia Department of Revenue Senate Bill 240 • Procedure – Billing: • If county tax bills are issued before the arbitrator has rendered its decision, the BTA shall specify to the tax commissioner the higher of the taxpayer‟s return valuation or 85% of the current years valuation as set by the BTA. • This amount shall be the basis for a temporary tax bill pending the outcome of the appeal process. • Also applies to non-binding Arbitration Georgia Department of Revenue Senate Bill 240 • Procedure – Appeal to Superior Court: • Neither the taxpayer or BTA may appeal the value decision rendered by this version of Arbitration to Superior Court. Georgia Department of Revenue SENATE BILL 240 • Amends 48-5-311 – Appeal to Superior Court: • The BTA may not appeal any non-binding arbitration or board of equalization decision to Superior Court when the assessment is changed by 20% or less, unless the BTA gives the county commissioners notice of their intention to appeal. • The Board of Commissioners by majority vote may prohibit the appeal. Georgia Department of Revenue Senate Bill 240 • Issues – Resolution to appeal when taxpayer does not furnish appraisal within the 30 day time frame? Georgia Department of Revenue SENATE BILL 240 • Amends 48-5-7.7 Forest Land Protection Act 2008 – For tax year January 1, 2009, applications for FLPA shall be filed on or before June 1. – For January 1, 2010 and future, all applications for FLPA shall be filed on or before last day for filing returns. – In case of property which is subject of reassessment the application may be filed in conjunction with or in lieu of an appeal. Georgia Department of Revenue SENATE BILL 240 • Amends 48-5-161 Tax Executions – Once an execution is entered the amount collected may include certain costs. – These costs may include title examination expenses, certified mail expenses, reasonable attorney‟s fees or other such necessary research expenses. Georgia Department of Revenue SENATE BILL 240 • Amends 48-5-306 Notices of Change – Upper left corner of face of mailing envelope must include BTA return address and USPS endorsement „Return Service Requested” – „Official Tax Matter‟ must be clearly printed in boldface type in a location which meets USPS regulations. – Removes COA notice within 5 days requirement for BOA Georgia Department of Revenue SENATE BILL 240 • Amends 48-5-511 Public Utilities – Each parcel of real estate included in the return shall be identified by address. – If commissioner is unable to locate property by address, the commissioner may request more information from taxpayer. – Such additional information may include a map or parcel identification information. Georgia Department of Revenue House Bill 63 • PILOT Restriction Act – Payment in lieu of taxes means payments made directly or indirectly – Primarily in consideration of revenue bonds to finance capital projects – In further consideration granting exemption from ad valorem taxation for capital projects Georgia Department of Revenue House Bill 63 • The term „payments in lieu of taxes‟ shall not include payments made for the use or occupancy of property. Georgia Department of Revenue House Bill 63 • Each county board of assessors shall continue to exercise its powers and discharge its duties and is specifically authorized, without limitation, to use a method of valuation for leases related to revenue bonds issued by a local government authority, based on assessments of the increasing interest of the non-governmental user in the real or personal property over the term of the lease or to use a simplified method employing a percentage of such leasehold interest.
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