2249 AMH APPE H2760

2249 AMH APPE H2760.2

HB 2249 - H AMD 126

By Representative Appelwick

On page 1, after line 14, insert the following:

"NEW SECTION. Sec. 1. It is the intent of this act to provide an annual property tax credit for homeowners against the state property tax equivalent to exempting the first twenty percent of the state-wide average assessed value of owner-occupied, single-family residential property. This credit is structured so that it will not result in increased property taxes on other taxpayers.

This act provides property tax relief for homeowners whose property taxes are at excessive levels. Rapid increases in home values often have the effect of increasing property taxes to excessive levels without an accompanying increase in a homeowner's ability to pay.

Both regular and excess property tax rates have been increasing during the last ten years. While this is a problem for all property owners, homeowners have suffered the most. Over the past decade homeowner property taxes have been taking an increasing share of household income. Home values have been increasing at a faster rate than commercial property. The share of property tax levies originating from residential property has increased as property tax levies have shifted away from the commercial sector.

Rising property taxes are more of a problem for residential property than for commercial property. Most property in this state is assessed at market value. The appraisal method primarily used to value residential property does not explicitly take into account taxation on the property. The method used to appraise commercial property does take into account the taxes paid on the property."

HB 2249 - H AMD

By Representative Appelwick

On page 42, after line 25, strike all material through "entirety." on line 36, and insert the following:

"TEMPORARY REDUCTION FOR 1998 TAXES

NEW SECTION. Sec. 401. (1) The state property tax levy for collection in 1998 shall be reduced by eight percent of the levy amount that would otherwise be allowed under this chapter without regard to this section.

(2) The tax reduction provided in this section is in addition to any other tax reduction legislation that may be enacted by the legislature.

(3) State levies for collection after 1998 shall be set at the amount that would be allowed otherwise under this chapter if the state levy for collection in 1998 had been set without the reduction under subsection (1) of this section.

PART V

CONSTITUTIONAL AMENDMENT

NEW SECTION. Sec. 501. The legislature is directed to submit to the voters in the 1998 general election the following proposed constitutional amendment:

Article VII, section 1. The power of taxation shall never be suspended, surrendered or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. However, the legislature may provide that increases in the assessed value of real property be phased in over a period of up to four years, under conditions and restrictions provided by law. The word "property" as used herein shall mean and include everything, whether tangible or intangible, subject to ownership. All real estate shall constitute one class: Provided, That the legislature may tax mines and mineral resources and lands devoted to reforestation by either a yield tax or an ad valorem tax at such rate as it may fix, or by both. Such property as the legislature may by general laws provide shall be exempt from taxation. Property of the United States and of the state, counties, school districts and other municipal corporations, and credits secured by property actually taxed in this state, not exceeding in value the value of such property, shall be exempt from taxation. The legislature shall have power, by appropriate legislation, to exempt personal property to the amount of three thousand ($3,000.00) dollars for each head of a family liable to assessment and taxation under the provisions of the laws of this state of which the individual is the actual bona fide owner.

Article VII, section . . .. Notwithstanding any other provision of this constitution, the legislature may provide a property tax credit against state ad valorem property tax. The credit shall only be allowed to owner-occupied single-family residential property that is not primarily used for commercial purposes. The initial amount of the credit shall not exceed the property tax imposed by the state on twenty percent of the state-wide average assessed value of owner-occupied single-family residential property that is not primarily used for commercial purposes, and thereafter the amount of the credit may increase annually at a rate not to exceed the average rate of growth over a five-year period in assessed value of that owner-occupied single-family residential property that is not primarily used for commercial purposes. The credit may not result in increased property taxes on other taxpayers.

The legislature may place such other restrictions and conditions upon the applicability of the credit under this section as it deems proper.

BE IT FURTHER RESOLVED, That this amendment is a single amendment within the meaning of Article XXIII, section 1 of the state Constitution.

The legislature finds that the changes contained in this amendment constitute a single integrated plan for purposes of property taxation. If this amendment is held to be separate amendments, this joint resolution is void in its entirety and is of no further force and effect.

PART VI

MISCELLANEOUS

NEW SECTION. Sec. 601. The following acts or parts of acts are each repealed:

(1) 1997 c ... Referendum No. .... (SB 5835) s 105;

(2) 1997 c ... Referendum No. .... (SB 5835) s 201;

(3) 1997 c ... Referendum No. .... (SB 5835) s 208; and

(4) 1997 c ... Referendum No. .... (SB 5835) s 301.

NEW SECTION. Sec. 602. (1) Sections 101 through 126 and 201 through 207 of this act take effect for taxes payable in 1999 if the proposed amendment to Article VII of the state Constitution providing for large increases in the assessed value of real property to be phased in over a period of four years and providing tax credits for owner-occupied single-family residential housing (section 501 of this act) is validly submitted to and is approved and ratified by the voters at a general election held in November 1998. If the proposed amendment is not approved and ratified, sections 101 through 126 and 201 through 207 of this act are null and void in their entirety."

On page 43, after line 2, insert the following:

"(3) Section 401 of this act takes effect January 31, 1998, only if by January 31, 1998, the legislature has submitted the proposed constitutional amendment to the voters as required by section 501 of this act. If the legislature has not submitted the constitutional amendment to the voters by January 31, 1998, section 401 of this act is null and void."

On page 43, after line 8, insert the following:

"NEW SECTION. Sec. 404. The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation."

Renumber the remaining sections consecutively and correct internal references and the title accordingly.

EFFECT: The Governor's proposal includes "value averaging," owner-occupied single-family residential property tax credits, and lowers the 106% levy for some local governments. This amendment adds to the Governor's proposal:

(a) A temporary 8% state levy reduction in 1998 (equivalent to the state levy reduction in 1998 contained in SB 5835) contingent on (b) below;

(b) The legislature is directed to place on the ballot in 1998 a constitutional amendment to allow a homeowner's property tax credit and "value averaging";

(d) A referendum clause.