HB129: HB129 Ad valorem tax; bona fide conservation use property; remove a limitation on leased property as to certain entities

25 HB 129/AP House Bill 129 (AS PASSED HOUSE AND SENATE) By: Representatives Cannon of the 172nd, Burchett of the 176th, Dickey of the 134th, Corbett of the 174th, Huddleston of the 72nd, and others A BILL TO BE ENTITLED AN ACT To amend Code Section 48-5-7.4 of the Official Code of Georgia Annotated, relating to1 preferential assessment for bona fide conservation use property and bona fide residential2 transitional property, so as to remove a limitation on leased property as to certain entities; to3 amend Code Section 48-7-40.26A of the Official Code of Georgia Annotated, relating to tax4 credits for postproduction expenditures, so as to renew a tax c redit for postproduction5 expenditures; to provide for related matters; to provide for an effective date and applicability;6 to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Code Section 48-5-7.4 of the Official Code of Georgia Annotated , relating to preferential10 assessment for bona fide conservation use property and bona fid e residential transitional11 property, is amended by revising subsection (b) as follows:12 "(b) Except in the case of the underlying portion of a tract of real property on which is13 actually located a constructed storm-water wetland, the followi ng additional rules shall14 apply to the qualification of conservation use property for current use assessment:15 H. B. 129 - 1 - 25 HB 129/AP (1) When one-half or more of the area of a single tract of rea l property is used for a16 qualifying purpose, then such tract shall be considered as used for such qualifying17 purpose unless some other type of business is being operated on the unused portion;18 provided, however, that such unused portion must be minimally managed so that it does19 not contribute significantly to erosion or other environmental or conservation problems.20 The lease of hunting rights or the use of the property for hunt ing purposes shall not21 constitute another type of business. The charging of admission for use of the property for22 fishing purposes shall not constitute another type of business;23 (2)(A)(i) The owner of a tract, lot, or parcel of land totaling less than ten acres shall24 be required by the tax assessor to submit additional relevant records regarding proof25 of bona fide conservation use for qualified property that on or after May 1, 2012, is26 either first made subject to a covenant or is subject to a rene wal of a previous27 covenant. The provisions of this paragraph relating to requiring additional relevant28 records regarding proof of bona fide conservation use shall not apply to such property29 if the owner of the subject property provides one or more of the following:30 (i)(I) Proof that such owner has filed with the Internal Revenue Ser vice a31 Schedule E, reporting farm related income or loss, or a Schedule F, with Form 1040,32 or, if applicable, a Form 4835, pertaining to such property;33 (ii)(II) Proof that such owner has incurred expenses for the qualifying use; or34 (iii)(III) Proof that such owner has generated income from the qualifying use.35 (ii) Prior to a denial of eligibility under this paragraph, the tax assessor shall conduct36 and provide proof of a visual, on-site inspection of the property. Reasonable notice37 shall be provided to the property owner before being allowed a visual, on-site38 inspection of the property by the tax assessor.39 (B) The owner of a tract, lot, or parcel of land totaling ten acres or more shall not be40 required by the tax assessor to submit additional relevant reco rds regarding proof of41 H. B. 129 - 2 - 25 HB 129/AP bona fide conservation use for qualified property that on or after May 1, 2012, is either42 first made subject to a covenant or is subject to a renewal of a previous covenant;43 (3) No property shall qualify as bona fide conservation use property if such current use44 assessment would result in any person who has a beneficial inte rest in such property,45 including any interest in the nature of stock ownership, receiv ing in any tax year any46 benefit of current use assessment as to more than 2,000 acres. If any taxpayer has any47 beneficial interest in more than 2,000 acres of tangible real property which is devoted to48 bona fide conservation uses, such taxpayer shall apply for curr ent use assessment only49 as to 2,000 acres of such land;50 (4) No property shall qualify as bona fide conservation use pr operty if it is leased to a51 person or entity which would not be entitled to conservation us e assessment;. This52 paragraph shall not apply to a corporation, a partnership, a general partnership, a limited53 partnership, a limited corporation, or a limited liability comp any registered with the54 Secretary of State that meets the following conditions:55 (A)(i) Its ownership includes only natural or naturalized citizens;56 (ii) It has as its primary purpose the production of agricultu ral products or timber57 from or on the land, including, but not limited to, subsistence farming or commercial58 production; and59 (iii) It derives 80 percent or more of its gross income from b ona fide conservation60 uses, including earnings on investments directly related to pas t or future bona fide61 conservation uses, within this state; or62 (B) At least one of its members has no less than a 25 percent ownership interest in the63 property being leased and would be entitled to conservation use assessment;64 (5) No property shall qualify as bona fide conservation use property if such property is65 at the time of application for current use assessment subject t o a restrictive covenant66 which prohibits the use of the property for the specific purpos e described in67 H. B. 129 - 3 - 25 HB 129/AP subparagraph (a)(1)(E) of this Code section for which bona fide conservation use68 qualification is sought; and69 (6) No otherwise qualified property shall be denied current us e assessment on the70 grounds that no soil map is available for the county in which s uch property is located;71 provided, however, that, if no soil map is available for the county in which such property72 is located, the owner making an application for current use assessment shall provide the73 board of tax assessors with a certified soil survey of the subject property unless another74 method for determining the soil type of the subject property is authorized in writing by75 such board."76 SECTION 2.77 Code Section 48-7-40.26A of the Official Code of Georgia Annotated, relating to tax credits78 for postproduction expenditures, is amended by revising subsections (d) and (f) as follows:79 "(d) The tax credits allowed under this Code section for all postproduction companies shall80 be subject to the following aggregate annual caps:81 (1) For taxable years beginning on or after January 1, 2018 2026, and before January 1,82 2019 2031, the aggregate amount of tax credits allowed under this Code section shall not83 exceed $10 million; and84 (2) For taxable years beginning on or after January 1, 2019, and before January 1, 2020,85 the aggregate amount of tax credits allowed under this Code section shall not exceed $1086 million;87 (3) For taxable years beginning on or after January 1, 2020, and before January 1, 2023,88 the aggregate amount of tax credits allowed under this Code section shall not exceed $1089 million per year;90 (4) The tax credits allowed under this Code section shall not be available for taxable91 years beginning on or after January 1, 2023; and92 H. B. 129 - 4 - 25 HB 129/AP (5) If the aggregate amount of tax credits claimed by taxpayers under this Code section93 during a year is less than the aggregate annual cap applicable to such year, the unclaimed94 portion of the aggregate annual cap shall be added to the aggregate annual cap applicable95 to the next succeeding year or years until it is fully claimed."96 "(f) For taxable years beginning on or after January 1, 2018 2026, and before January 1,97 2023 2031, the postproduction company shall report to the Department of Revenue on its98 Georgia income tax return the monthly average number of full-time employees subject to99 Georgia income tax withholding for the taxable year. For purposes of this subsection, the100 term 'full-time employee' shall mean a person who performs a job that requires a minimum101 of 35 hours a per week, and pays at or above the average wage earned in the county with102 the lowest average wage earned in this state, as reported in th e most recently available103 annual issue of the Georgia Employment and Wages Averages Report of the Department104 of Labor. Notwithstanding Code Sections 48-2-15, 48-7-60, and 48-7-61, for such taxable105 years, the commissioner shall annually report to the House Committee on Ways and Means106 and the Senate Finance Committee. The report shall include the name, tax year beginning,107 and monthly average number of full-time employees for each post production company. 108 The first report shall be submitted by June 30, 2018, and each year thereafter by June 30."109 SECTION 3.110 This Act shall become effective upon its approval by the Governor or upon its becoming law111 without such approval and shall be applicable to all taxable ye ars beginning on or after112 January 1, 2026.113 SECTION 4.114 All laws and parts of laws in conflict with this Act are repealed.115 H. B. 129 - 5 -