The Senate Committee on Finance offered the following
substitute to SB 576:
A BILL TO BE ENTITLED
AN ACT
To amend Article 1 of Chapter 5 of Title 48 of the Official Code of Georgia Annotated,
relating to general provisions relative to ad valorem taxation of property, so as to provide for
assessment of tangible real property used for community housing provider properties; to
provide for supporting affidavits; to provide for definitions; to provide for related matters;
to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 1 of Chapter 5 of Title 48 of the Official Code of Georgia Annotated, relating to
general provisions relative to ad valorem taxation of property, is amended in Code
Section 48-5-2, relating to definitions regarding ad valorem taxation of property generally,
by revising paragraph (3) and adding new paragraphs to read as follows:
<ins>"(.2) 'Community housing provider' means:
(A) A housing provider that is either a natural person, a nonprofit corporation, or a
charitable organization; or
(B) A Subchapter 'S' corporation, limited liability company, or partnership that does
not own in excess of 500 properties in this state, either directly or indirectly, in common
</ins>
<ins>ownership with any corporation, association, partnership, limited liability company,
limited partnership, trust, issuer, or other private legal entity organized under the laws
of this state, the United States, the District of Columbia, or any other state, territory, or
dependency of the United States or under the laws of a foreign country."
</ins> "(3) 'Fair market value of property' means the amount a knowledgeable buyer would pay
for the property and a willing seller would accept for the property at an arm's length, bona
fide sale. The income approach, if data are available, shall be considered in determining
the fair market value of income-producing property. If actual income and expense data
are voluntarily supplied by the property owner, such data shall be considered in such
determination. <ins>A housing provider that is not a community housing provider shall
provide the tax assessor the data necessary to use an income approach, upon request of
the tax assessor.</ins> With respect to the valuation of equipment, machinery, and fixtures
when no ready market exists for the sale of the equipment, machinery, and fixtures, fair
market value may be determined by resorting to any reasonable, relevant, and useful
information available, including, but not limited to, the original cost of the property, any
depreciation or obsolescence, and any increase in value by reason of inflation. Each tax
assessor shall have access to any public records of the taxpayer for the purpose of
discovering such information.
(A) In determining the fair market value of a going business where its continued
operation is reasonably anticipated, the tax assessor may value the equipment,
machinery, and fixtures which are the property of the business as a whole where
appropriate to reflect the accurate fair market value.
(B) The tax assessor shall apply the following criteria in determining the fair market
value of real property:
(i) Existing zoning of property;
(ii) Existing use of property, including any restrictions or limitations on the use of
property resulting from state or federal law or rules or regulations adopted pursuant
to the authority of state or federal law;
(iii) Existing covenants or restrictions in deed dedicating the property to a particular
use;
(iv) Bank sales, other financial institution owned sales, or distressed sales, or any
combination thereof, of comparable real property;
(v) Decreased value of the property based on limitations and restrictions resulting
from the property being in a conservation easement;
(vi) Rent limitations, higher operating costs resulting from regulatory requirements
imposed on the property, and any other restrictions imposed upon the property in
connection with the property being eligible for any income tax credits with respect to
real property which are claimed and granted pursuant to either Section 42 of the
Internal Revenue Code of 1986, as amended, or Chapter 7 of this title or receiving any
other state or federal subsidies provided with respect to the use of the property as
residential rental property; provided, however, that properties described in this
division shall not be considered comparable real property for the assessment or appeal
of assessment of properties not covered by this division;
(vii)(I) In establishing the value of any property subject to rent restrictions under
the sales comparison approach, any income tax credits described in division (vi) of
this subparagraph that are attributable to a property may be considered in
determining the fair market value of the property, provided that the tax assessor uses
comparable sales of property which, at the time of the comparable sale, had unused
income tax credits that were transferred in an arm's length, bona fide sale.
(II) In establishing the value of any property subject to rent restrictions under the
income approach, any income tax credits described in division (vi) of this
subparagraph that are attributable to property may be considered in determining the
fair market value of the property, provided that such income tax credits generate
actual income to the record holder of title to the property; and
(viii) Any other existing factors provided by law or by rule and regulation of the
commissioner deemed pertinent in arriving at fair market value.
(B.1) The tax assessor shall not consider any income tax credits with respect to real
property which are claimed and granted pursuant to either Section 42 of the Internal
Revenue Code of 1986, as amended, or Chapter 7 of this title in determining the fair
market value of real property.
(B.2) In determining the fair market value of real property, the tax assessor shall not
include the value of any intangible assets used by a business, wherever located,
including patents, trademarks, trade names, customer agreements, and merchandising
agreements.
(C) Fair market value of 'rehabilitated historic property' as such term is defined in
subsection (a) of Code Section 48-5-7.2 means:
(i) For the first eight years in which the property is classified as rehabilitated historic
property, the value equal to the greater of the acquisition cost of the property or the
appraised fair market value of the property as recorded in the county tax digest at the
time preliminary certification on such property was received by the county board of
tax assessors pursuant to subsection (c) of Code Section 48-5-7.2;
(ii) For the ninth year in which the property is classified as rehabilitated historic
property, the value of the property as determined by division (i) of this subparagraph
plus one-half of the difference between such value and the current fair market value
exclusive of the provisions of this subparagraph; and
(iii) For the tenth and following years, the fair market value of such property as
determined by the provisions of this paragraph, excluding the provisions of this
subparagraph.
(D) Fair market value of 'landmark historic property' as such term is defined in
subsection (a) of Code Section 48-5-7.3 means:
(i) For the first eight years in which the property is classified as landmark historic
property, the value equal to the greater of the acquisition cost of the property or the
appraised fair market value of the property as recorded in the county tax digest at the
time certification on such property was received by the county board of tax assessors
pursuant to subsection (c) of Code Section 48-5-7.3;
(ii) For the ninth year in which the property is classified as landmark historic
property, the value of the property as determined by division (i) of this subparagraph
plus one-half of the difference between such value and the current fair market value
exclusive of the provisions of this subparagraph; and
(iii) For the tenth and following years, the fair market value of such property as
determined by the provisions of this paragraph, excluding the provisions of this
subparagraph.
(E) Timber shall be valued at its fair market value at the time of its harvest or sale in
the manner specified in Code Section 48-5-7.5.
(F) Fair market value of 'brownfield property' as such term is defined in subsection (a)
of Code Section 48-5-7.6 means:
(i) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6,
for the first ten years in which the property is classified as brownfield property, or as
this period of preferential assessment may be extended pursuant to subsection (o) of
Code Section 48-5-7.6, the value equal to the lesser of the acquisition cost of the
property or the appraised fair market value of the property as recorded in the county
tax digest at the time application was made to the Environmental Protection Division
of the Department of Natural Resources for participation under Article 9 of Chapter 8
of Title 12, the 'Georgia Brownfield Act,' as amended; and
(ii) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6,
for the eleventh and following years, or at the end of any extension of this period of
preferential assessment pursuant to subsection (o) of Code Section 48-5-7.6, the fair
market value of such property as determined by the provisions of this paragraph,
excluding the provisions of this subparagraph.
(G) Fair market value of 'qualified timberland property' means the fair market value
determined in accordance with Article 13 of this chapter."
<ins>"(7) 'Housing provider' means an owner of a single-family residential property which
owner does not reside in the property, but offers the property, for a fee, to another to be
used as a residence.
(8) 'Housing provider services' means providing a single-family residential property to
another, for a fee, to be used as the residence of an individual other than the owner of the
property."
</ins> SECTION 2.
Said article is further amended in Code Section 48-5-7, relating to assessment of tangible
property, by adding a new subsection to read as follows:
<ins>"(c.7)(1)(A) Except as provided in subparagraph (B) of this paragraph, tangible real
property used for housing provider services and owned by a housing provider may be
assessed for ad valorem property tax purposes at 100 percent of the value which other
tangible real property is assessed and shall be taxed on a levy made by each respective
tax jurisdiction according to said assessment.
(B) Tangible real property used for housing provider services and owned by a
community housing provider shall be assessed for ad valorem property tax purposes at
40 percent of the value which other tangible real property is assessed and shall be taxed
on a levy made by each respective tax jurisdiction according to said assessment.
</ins>
<ins>(2) The tax assessor may require an authorized representative of a community housing
provider to file, not later than April 1 of each year, a sworn affidavit establishing that
tangible real property is not used for housing provider services or that such community
housing provider is in fact a community housing provider."
</ins> SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.