09 LC 18
8131
House
Bill 517
By:
Representatives Lindsey of the
54th,
Wilkinson of the
52nd,
and Geisinger of the
48th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 48 of the Official Code of Georgia Annotated, related to revenue and
taxation, so as to provide for the comprehensive revision of the manner and
method of assessing real property; to limit valuation increases of real
property; to provide for procedures, conditions, and limitations; to provide for
applicability to certain types of real property; to provide for the manner and
method of increasing or removing mill limitations regarding school systems and
municipalities; to provide for optional discontinuation procedures; to provide
for related matters; to provide for effective dates and contingencies; to
provide for automatic repeal of certain provisions under certain circumstances;
to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
48 of the Official Code of Georgia Annotated, related to revenue and taxation,
is amended by adding a new chapter to read as follows:
"CHAPTER
5B
48-5B-1.
Pursuant
to Article VII, Section I, Paragraph IV of the Constitution, the provisions of
this chapter shall control over and supercede anything to the contrary in
Chapter 5 of this title.
48-5B-2.
(a)
The rate of increase of the assessed value of real property for state, county,
municipal, or educational ad valorem tax purposes shall not exceed an aggregate
of 9 percent for each three-year period of successive ownership and, except as
provided in this subsection, shall not exceed from one taxable year to the
succeeding taxable year the lesser of 3 percent or the percent change in the
rate of economic inflation on individual taxpayers as determined by the
commissioner. For such purpose, the commissioner may use the Consumer Price
Index for all urban consumers published by the Bureau of Labor Statistics of the
United States Department of Labor and any other reliable economic indicator
determined by the commissioner or such other designee as specified by general
law to be appropriate. Such rate shall be determined by the commissioner not
later than December 1 of each year. Within such three-year period, such 3
percent limitation shall operate in a cumulative manner so if an increase in one
year is less than 3 percent, the 3 percent cap for the next succeeding year
shall be increased by an amount equal to the difference in the actual percentage
increase in the preceding year and 3 percent.
(b)
Nothing in this Code section shall be construed to prohibit the assessed value
of real property from decreasing.
(c)
If real property or interests therein are sold or transferred, such real
property shall be valued for ad valorem tax purposes in an amount not to exceed
fair market value. Substantial additions or improvements to such real property
shall be valued for ad valorem tax purposes at their fair market value and shall
be added to the owner's valuation amount under this subsection.
(d)
Nothing in this chapter shall be construed to alter or affect in any manner the
authority granted to the General Assembly under Article VII, Section II,
Paragraph II of the Constitution to enact homestead exemptions.
48-5B-3.
In
addition to any other provision of this chapter authorizing error or omission
correction by local tax officials, the commissioner shall be authorized to
correct any manifest, factual error or omission in the valuation of real
property.
48-5B-4.
(a)
For purposes of determining when any parcel of real property shall be
reassessed, an assessable transfer of interest in any real property includes,
but is not limited to, the following:
(1)
A conveyance by deed;
(2)
A conveyance by land contract;
(3)
A conveyance to a trust, except if the settlor or the settlor's spouse, or both,
conveys the property to the trust and the sole present beneficiary or
beneficiaries are the settlor or the settlor's spouse, or both;
(4)
A conveyance by distribution from a trust, except if the distributee is the sole
present beneficiary or the spouse of the sole present beneficiary, or
both;
(5)
A change in the sole present beneficiary or beneficiaries of a trust, except a
change that adds or substitutes the spouse of the sole present
beneficiary;
(6)
A conveyance by distribution under a will or by intestate succession, except if
the distributee is the decedent's spouse;
(7)
A conveyance by lease if the total duration of the lease, including the initial
term and all options for renewal, is more than 20 years or the lease grants the
lessee a bargain purchase option. As used in this paragraph, the term 'bargain
purchase option' means the right to purchase the property at the termination of
the lease for not more than 80 percent of the property's true cash value at the
termination of the lease. This paragraph shall not apply to personal property
or that portion of the property not subject to the leasehold interest
conveyed;
(8)
A transfer of an ownership interest in a single transaction or as a part of a
series of related transactions within a 25 year period in a corporation,
partnership, sole proprietorship, limited liability company, limited liability
partnership, or other legal entity if the ownership interest conveyed is more
than 50 percent of the corporation, partnership, sole proprietorship, limited
liability company, limited liability partnership, or other legal
entity;
(9)
A change of use of real property when classification of property changes as a
result of a local zoning ordinance change; or
(10)
The passage of ten years since the last assessable transfer of interest for real
property owned by a publicly held entity whose stock, shares, or other ownership
interests are traded on a regulated exchange, a pension fund, or other similar
entity.
(b)
An assessable transfer of interest resulting in the appraisal required pursuant
to this chapter occurs at the time of execution of the instruments directly
resulting in the transfer of interest and without regard as to whether or not
the applicable instruments are recorded.
(c)
An assessable transfer of interest shall not include:
(1)
Transfers not subject to federal income tax in the following circumstances
pursuant to the specified provisions of the Internal Revenue Code:
(A)
1033 Conversions-Fire and Insurance Proceeds to Rebuild;
(B)
1041 Transfers of Property Between Spouses or Incident to Divorce;
(C)
351 Transfer to a Corporation Controlled by Transferor;
(D)
355 Distribution by a Controlled Corporation;
(E)
368 Corporate Reorganizations; or
(F)
721 Nonrecognition of Gain or Loss on a Contribution to a
Partnership;
(2)
A transfer of that portion of property subject to a life estate or life lease
retained by the transferor, until expiration or termination of the life estate
or life lease;
(3)
A transfer through foreclosure or forfeiture of a recorded instrument or through
deed or conveyance in lieu of a foreclosure or forfeiture;
(4)
A tax deed which is redeemed by the person to whom taxes are assessed within one
year of the date of the tax sale;
(5)
A conveyance to a trust if the settlor or the settlor's spouse, or both, convey
the property to the trust and the sole present beneficiary of the trust is the
settlor or the settlor's spouse, or both;
(6)
A transfer for security or an assignment or discharge of a security
interest;
(7)
A transfer of real property or other ownership interests among members of an
affiliated group. As used in this paragraph, the term 'affiliated group' is as
defined in Section 1504 of the Internal Revenue Code;
(8)
A transfer of real property or other ownership interests among corporations,
partnerships, limited liability companies, limited liability partnerships, or
other legal entities if the entities involved are commonly controlled;
or
(9)
A transfer of an interest in a timeshare unit by deed or lease.
48-5B-5.
(a)
As used in this Code section, the term 'natural person' means an individual or
group of individuals who directly owns real property outside of any legal
entity. A natural person shall not include a trustee, agent, officer, or member
of a legal entity which has an ownership interest in real property. A legal
entity includes, but is not limited to, a corporation, partnership, limited
liability company, unincorporated association, or trust.
(b)
The department may promulgate regulations to implement this chapter, including,
without limitation, providing for those circumstances that constitute a change
in the beneficial ownership of real property or an assessable transfer of
interest not evidenced by transfer of fee simple title. The department shall
examine the substance, rather than merely the form of the transfer, and related
and surrounding transactions, and may use the step transaction, economic
reality, quid pro quo, personal benefit, and other judicially developed
doctrines in determining whether the requisite assessable transfer of interest
has occurred.
(c)(1)
Except as provided pursuant to paragraph (2) of this subsection, the county
assessor annually shall send to each real property owner of record, or the
owner's agent of record, to the address of record, a certificate prescribed by
the department which shall be signed and returned by the property owner or the
owner's agent certifying details of the ownership of the property. In addition
to any applicable interest and penalties for the late payment of property taxes,
if the owner or owner's agent knowingly falsifies any detail on the certificate,
then the owner or owner's agent is subject to a civil penalty imposed by the
department, the county assessor, or an assessor appointed to handle multiple
county assessments pursuant to an intergovernmental agreement, as applicable.
The amount shall be three times the taxes lawfully due on the property. This
civil penalty shall be enforceable and collectable in the same manner as
property tax.
(2)
The annual certificate requirement provided pursuant to paragraph (1) of this
subsection shall not apply to a real property owner who is a natural person.
However, the assessor periodically may send certificates to natural persons
subject to the same requirements provided pursuant to paragraph (1) of this
subsection.
48-5B-6.
(a)
Except as otherwise provided in subsection (b) of this Code section, upon the
occurrence of an assessable transfer of property or interest therein, for each
of the ensuing seven taxable years, any annual increase in the value of the
property attributable thereto shall for tax purposes be limited to one-seventh
of the difference between the transferee's fair market value and the most recent
value of that property established by the board of assessors in the year the
transfer occurred plus the rate established in Code Section
48-5B-2.
(b)(1)
In the event of a transfer of homestead real property, the appraised value of
the homestead purchased by or transferred to the new owner shall be the lesser
of the following three values:
(A)
The appraised value of the newly acquired homestead real property;
(B)
The appraised value of the former homestead real property if the purchase price
of the newly acquired homestead real property is less than the sales price of
the former homestead real property; or
(C)
The appraised value of the former homestead real property plus an amount equal
to the difference between the purchase price of the newly acquired homestead
real property and the sales price of the former homestead real property if the
purchase price of the newly acquired homestead real property is greater than the
sales price of the former homestead property.
(2)
For each of the ensuing seven taxable years, any annual increase in the value of
the homestead property attributable thereto shall for tax purposes be limited to
one-seventh of the difference between the transferee's value as determined under
paragraph (1) of this subsection and the most recent value of that property
established by the board of assessors in the year the transfer occurred plus the
rate established in Code Section 48-5B-2.
48-5B-7.
The
provisions of this chapter shall not apply to:
(1)
Property of public utilities the taxation of which is otherwise provided for in
this title;
(2)
Any homestead's ad valorem taxes which are the subject of any such general or
local law exemption that freeze the assessment of property with respect to any
or all ad valorem taxes unless such general law or local law is repealed. In
the event of such repeal, the initial valuation amount of the homestead property
for purposes of this chapter shall be the taxable value of such property
established as the initial base year assessed value of such property; provided,
however, that in the case of an adjusted base year assessed value homestead
exemption, the initial valuation amount of the homestead property for purposes
of this chapter shall be the taxable value of the property established as the
most recent adjusted base year assessed value applicable to such
property;
(3)
Homestead real property in any county or consolidated government for which a
local constitutional amendment has been continued in force and effect as part of
the Constitution which freezes ad valorem property taxes with respect to such
homestead real property unless such local constitutional amendment is repealed.
In the event of such repeal, the initial valuation amount of each parcel of
homestead real property shall be the most recent taxable value of such parcel as
established under such local constitutional amendment; and
(4)
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 with respect to real
property in such county or county school district unless such local
constitutional amendment is repealed.
48-5B-8.
(a)
The mill limitation in effect on January 1, 2011, for any school system pursuant
to Article VII, Section VI, Paragraph II of the Constitution may be increased or
removed for any school system upon the adoption of a resolution by the board of
education by a majority of the members of the board of education conditioned
upon approval by a majority of the qualified voters residing within the limits
of the school system voting in a referendum thereon.
(b)
Following the adoption of such resolution, the board of education shall notify
the election superintendent by forwarding to the superintendent a copy of the
resolution calling for the increase or removal of the mill
limitation.
(c)
Upon receipt of the resolution, the election superintendent shall issue the call
for an election for the purpose of submitting the question of the imposition of
the tax to the voters of the school system. The election superintendent shall
issue the call and shall conduct the election within 45 days but otherwise in
the manner authorized under Code Section 21-2-540. The election superintendent
shall cause the date and purpose of the election to be published once a week for
four weeks immediately preceding the date of the election in the official organ
of the county.
(d)
The ballot submitting the question of increasing or removing the mill limitation
shall have written or printed thereon the following:
|
'( ) YES
( )
NO
|
Shall
the current __ mill limit applicable to taxes of the _____ school system be
(increased to a ____ mill limit) (removed so that there is no mill
limitation)?'
|
(e)
All persons desiring to vote in favor of increasing or removing the mill
limitation shall vote 'Yes' and all persons opposed to increasing or removing
the mill limitation shall vote 'No.' If more than one-half of the votes cast
are in favor of increasing or removing the mill limitation then the mill
limitation shall be increased or removed accordingly. The election
superintendent shall hold and conduct the election under the same rules and
regulations as govern special elections. The superintendent shall canvass the
returns, declare the result of the election, and certify the result to the
Secretary of State and to the commissioner. The expense of the election shall
be paid from school system funds.
48-5B-9.
(a)
The mill limitation in effect on January 1, 2011, for any municipality may be
increased or removed for any municipality upon the adoption of a resolution by
the governing authority of the municipality by a majority of the members of the
governing authority conditioned upon approval by a majority of the qualified
voters residing within the limits of the municipality voting in a referendum
thereon.
(b)
Following the adoption of such resolution, the governing authority shall notify
the municipal election superintendent by forwarding to the superintendent a copy
of the resolution calling for the increase or removal of the mill
limitation.
(c)
Upon receipt of the resolution, the election superintendent shall issue the call
for an election for the purpose of submitting the question of the imposition of
the tax to the voters of the municipality. The election superintendent shall
issue the call and shall conduct the election within 45 days but otherwise in
the manner authorized under Code Section 21-2-540. The election superintendent
shall cause the date and purpose of the election to be published once a week for
four weeks immediately preceding the date of the election in the official organ
of the county.
(d)
The ballot submitting the question of increasing or removing the mill limitation
shall have written or printed thereon the following:
|
'( ) YES
( )
NO
|
Shall
the __ mill limit applicable to taxes of the City of_____ be (increased to a
____ mill limit) (removed so that there is no mill limitation)?'
|
(e)
All persons desiring to vote in favor of increasing or removing the mill
limitation shall vote 'Yes' and all persons opposed to increasing or removing
the mill limitation shall vote 'No.' If more than one-half of the votes cast
are in favor of increasing or removing the mill limitation then the mill
limitation shall be increased or removed accordingly. The election
superintendent shall hold and conduct the election under the same rules and
regulations as govern special elections. The superintendent shall canvass the
returns, declare the result of the election, and certify the result to the
Secretary of State and to the commissioner. The expense of the election shall
be paid from municipal funds.
(f)
The procedures provided in this Code section shall be supplemental to and not in
lieu of any other method for increasing or removing a millage cap by local
Act.
48-5B-10.
(a)
The limitations required under Article VII, Section I, Paragraph IV of the
Constitution may be discontinued for any county and each municipality or county
or independent school system in such county upon the adoption of a resolution by
the governing authority of the county by a majority of the members thereof,
which resolution shall be conditioned upon approval by a majority of the
qualified voters residing within the limits of the county voting in a referendum
thereon.
(b)
Following the adoption of such resolution, the governing authority of the county
shall notify the election superintendent by forwarding to the superintendent a
copy of the resolution calling for the discontinuation of the
limitations.
(c)
Upon receipt of the resolution, the election superintendent shall issue the call
for an election for the purpose of submitting the question of the imposition of
the tax to the voters of the appropriate county, municipality, or school system.
The election superintendent shall issue the call and shall conduct the election
on a date and in the manner authorized under Code Section 21-2-540. The
election superintendent shall cause the date and purpose of the election to be
published once a week for four weeks immediately preceding the date of the
election in the official organ of the county.
(d)
The ballot submitting the question of discontinuing the limitations shall have
written or printed thereon the following:
|
'( ) YES
( )
NO
|
Shall
the limitations on assessment increases for county, municipal, and educational
ad valorem taxes be discontinued in __________ county?'
|
(e)
All persons desiring to vote in favor of discontinuing the limitations shall
vote 'Yes,' and all persons opposed to discontinuing the limitations shall vote
'No.' If more than one-half of the votes cast are in favor of discontinuing the
limitations, then the limitations shall be discontinued accordingly. The
election superintendent shall hold and conduct the election under the same rules
and regulations as govern special elections. The superintendent shall canvass
the returns, declare the result of the election, and certify the result to the
Secretary of State and to the commissioner. The expense of the election shall
be paid from county
funds."
SECTION
2.
This
Act shall become effective on January 1, 2011; provided, however, that this Act
shall only become effective on January 1, 2011, upon the ratification of a
resolution at the November, 2010, state-wide general election, which resolution
amends the Constitution so as to limit valuation increases of real property. If
such resolution is not so ratified, this Act shall not become effective and this
Act shall stand repealed in its entirety on January 1, 2011.
SECTION
3.
All
laws and parts of laws in conflict with this Act are repealed.