HB1017: HB1017 Property; prohibit certain business enterprises from purchasing or acquiring an interest in a single-family residential property

26 LC 60 0216 House Bill 1017 By: Representatives Kendrick of the 95th, Evans of the 57th, and Clark of the 108th A BILL TO BE ENTITLED AN ACT To amend Chapter 3 of Title 44 and Chapter 5 of Title 48 of the Official Code of Georgia1 Annotated, relating to regulation of specialized land transactions and ad valorem taxation of2 property, respectively, so as to prohibit certain business ente rprises from purchasing or3 acquiring an interest in a single-family residential property; to provide for construction; to4 provide for the assessment of real property purchased or acquir ed by certain business5 enterprises at 100 percent of its fair market value; to provide for penalties; to provide for6 certification of ownership; to provide for forms and applications; to provide for definitions;7 to provide for effective dates and automatic repeal; to provide for related matters; to repeal8 conflicting laws; and for other purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 Chapter 3 of Title 44 of the Official Code of Georgia Annotated , relating to regulation of12 specialized land transactions, is amended by adding a new article to read as follows:13 H. B. 1017 - 1 - 26 LC 60 0216 "ARTICLE 814 44-3-260.15 As used in this article, the term:16 (1) 'Affiliate' means any entity that directly or indirectly owns or controls, is owned or17 controlled by, or is under any other common ownership or contro l with a business18 enterprise.19 (2) 'Business enterprise' means any corporation, association, partnership, limited liability20 company, limited partnership, trust, issuer, or other private legal entity organized under21 the laws of this state, the United States, the District of Colu mbia, or any other state,22 territory, or dependency of the United States or under the laws of a foreign country that23 holds an interest in at least 100 single-family residential properties within this state which24 are used primarily for the purpose of generating rental income. Such term shall not25 include an organization which maintains nonprofit status under Section 501(c)(3) of the26 Internal Revenue Code of 1986 and tax exempt status under Code Section 48-7-25.27 (3) 'Single-family residential property' means any parcel of real property located within28 this state which includes as its principal substantial improvement a residential dwelling29 designed exclusively for use and occupancy by a single family, including, but not be30 limited to, a:31 (A) Detached residential structure containing from one to thre e individual dwelling32 units, each designed exclusively for use and occupancy by one family;33 (B) Townhouse;34 (C) Condominium, as such term is defined in Code Section 44-3-71;35 (D) Manufactured home, as such term is defined in Code Section 8-2-131; and36 (E) Mobile home, as such term is defined in Code Section 8-2-131.37 (4) 'Townhouse' means an individual residential dwelling unit within a larger structure38 that contains two or more attached residential dwelling units constructed in a row where39 H. B. 1017 - 2 - 26 LC 60 0216 each residential dwelling unit is designed exclusively for use and occupation by one40 family, is located on an individual lot or parcel, and shares at least one common wall with41 an adjacent unit.42 44-3-261.43 (a) On and after January 1, 2027, no business enterprise shall purchase or otherwise44 acquire, directly or indirectly, including, but not limited to, through one or more affiliates,45 an interest in a single-family residential property.46 (b)(1) For purposes of this Code section, an interest in a sin gle-family residential47 property shall not include a deed to secure debt, security deed , mortgage, security48 interest, deed of trust, or other lien upon a single-family residential property that secures49 a debt or other obligation, and nothing in this Code section sh all be construed as50 prohibiting a business enterprise from owning or acquiring a deed to secure debt, security51 deed, mortgage, security interest, deed of trust, or other lien upon a single-family52 residential property located in this state.53 (2) An interest in a single-family residential property acquir ed pursuant to the54 enforcement of a deed to secure debt, security deed, mortgage, security interest, deed of55 trust, or other lien described in paragraph (1) of this subsection by a business enterprise56 that would otherwise violate subsection (a) of this Code section shall not constitute such57 a violation, provided that such interest in the single-family residential property is sold or58 otherwise transferred to another person by the business enterprise within three years from59 the date such interest is acquired.60 SECTION 2.61 Chapter 5 of Title 48, relating to ad valorem taxation of prope rty, is amended by revising62 Code Section 48-5-3, relating to taxable property, as follows:63 H. B. 1017 - 3 - 26 LC 60 0216 "48-5-3.64 All real property including, but not limited to, leaseholds, in terests less than fee, and all65 personal property shall be liable to taxation and shall be taxe d, except as otherwise66 provided by law. Liability of property for taxation shall not be affected by the individual67 or corporate character of the property owner or by the resident or nonresident status of the68 property owner, except as otherwise provided by law."69 SECTION 3.70 Said chapter is further amended in Code Section 48-5-7, relating to assessment of tangible71 property, by adding a new subsection to read as follows:72 "(c.7) Tangible real property which qualifies as business enterprise property pursuant to73 the provisions of Code Section 48-5-7.8 shall be assessed at 100 percent of its fair market74 value and shall be taxed on a levy made by each respective taxing jurisdiction according75 to 100 percent of the property's fair market value."76 SECTION 4.77 Said chapter is further amended by adding a new Code section to read as follows:78 "48-5-7.8.79 (a) As used in this article, the term 'business enterprise property' means any real property80 owned wholly or partially by a business enterprise, as such term is defined in Code Section81 44-3-260.82 (b)(1) Except as otherwise provided in paragraph (2) of this subsection, each property83 owner of business enterprise property shall submit, by January 1, 2027, a certification of84 ownership of such property to the county board of tax assessors and shall include with85 such certification a copy of the recorded deed for the property and any other information86 required by the county board of tax assessors. The county boar d of tax assessors shall87 determine if the provisions of this Code section are applicable to such property and, upon88 H. B. 1017 - 4 - 26 LC 60 0216 such determination, such board shall impose an assessment on such property as provided89 for in subsection (c.7) of Code Section 48-5-7. The board shal l make a determination90 within 30 days after receiving any certification and shall notify the property owner in the91 same manner that notices of assessment are given pursuant to Code Section 48-5-306.92 (2) Each property owner of business enterprise property purchased or acquired on and93 after January 1, 2027, shall submit, within 90 days of the execution of a deed transferring94 title to such business enterprise property, a certification of ownership of such property to95 the county board of tax assessors and shall include with such certification a copy of the96 recorded deed for the property and any other information required by the county board97 of tax assessors. The county board of tax assessors shall determine if the provisions of98 this Code section are applicable to such property and, upon suc h determination, such99 board shall impose an assessment on such property as provided for in subsection (c.7) of100 Code Section 48-5-7. The board shall make a determination with in 30 days after101 receiving any certification and shall notify the property owner in the same manner that102 notices of assessment are given pursuant to Code Section 48-5-306.103 ( c ) ( 1 ) A p e n a l t y s h a l l b e i m p o s e d f o r a n y f a i l u r e t o c o m p l y w ith the certification104 requirement set forth in subsection (b) of this Code section. The penalty shall be twice105 the difference between the total amount of the tax paid under t his chapter and the total106 amount of taxes which would otherwise have been paid pursuant t o the assessment107 provided for in subsection (c.7) of Code Section 48-5-7. Any s uch penalty shall bear108 interest at the rate specified in Code Section 48-2-40 from Jan uary 1, 2027, for any109 property purchased or acquired before January 1, 2027, and from 90 days after the date110 of execution of a deed transferring title to such business ente rprise property, for any111 property purchased or acquired after January 1, 2027.112 (2) Penalties and interest imposed under this Code section shall constitute a lien against113 the property and shall be collected as other unpaid ad valorem taxes are collected. Such114 penalties and interest shall be distributed pro rata to each taxing jurisdiction wherein the115 H. B. 1017 - 5 - 26 LC 60 0216 assessment has been granted based upon the total amount by which such assessment has116 reduced taxes for each such taxing jurisdiction on the property in question as provided117 in this Code section.118 (d)(1) Property which has been classified by the county board of tax assessors as119 business enterprise property shall be immediately subject to the assessment provided for120 in subsection (c.7) of Code Section 48-5-7; provided, however, that, for the purposes of121 determining the years of applicability for such assessment, the tax year following the year122 in which the certification required under subsection (b) of this Code section was due shall123 be considered and counted as the first year of applicability.124 (2) Property which is subject to the assessment provided for in subsection (c.7) of Code125 Section 48-5-7 shall be separately classified from all other property on the tax digest, and126 such separate classification shall be such as to enable any person examining the tax digest127 to readily ascertain that the property is subject to such assessment.128 (e) At such time as property ceases to qualify as business enterprise property, the property129 owner shall file an application for release of the assessment provided for in subsection (c.7)130 of Code Section 48-5-7 with the county board of tax assessors and shall include with such131 application any other information required by such board. The board shall approve the132 release upon verification that all taxes and penalties with respect to the property have been133 satisfied. After the application for release has been approved by the board of tax assessors,134 such board shall file the release in the office of the clerk of the superior court in the county135 in which the original covenant was filed. Such clerk shall file and index such release in the136 real property records maintained in the clerk's office. No fee shall be paid to such clerk for137 recording such release.138 (f) The commissioner shall by regulation provide uniform certification and release forms139 to be used in certifying ownership of business enterprise prope rty for the assessment140 provided for in subsection (c.7) of Code Section 48-5-7 and applying for release of such141 assessment. Such certification form shall include an oath or a ffirmation by the taxpayer142 H. B. 1017 - 6 - 26 LC 60 0216 that he or she is in compliance with subsection (b) of this Code section and has not failed143 to submit a certification of ownership of business enterprise property in the same or another144 county with respect to any property."145 SECTION 5.146 (a) Except as otherwise provided in subsection (b) of this sec tion, this Act shall become147 effective upon its approval by the Governor or upon its becoming law without such approval,148 and shall apply to any conveyance of an interest in residential property made on or after such149 date.150 (b) The provisions of Sections 3 and 4 of this Act shall become effective on January 1, 2027,151 only if an amendment to the Constitution is ratified by the electors at the November, 2026,152 state-wide general election authorizing the General Assembly to define and establish a153 separate class of property that includes only tangible real pro perty qualifying as business154 enterprise property and to establish a program by which certain properties within such class155 may be assessed for taxes at different rates or valuations. If such an amendment is not so156 ratified, Sections 3 and 4 of this Act shall not become effective and shall stand repealed on157 January 1, 2027.158 SECTION 6.159 All laws and parts of laws in conflict with this Act are repealed.160 H. B. 1017 - 7 -