HB1228: HB1228 Ad valorem tax; assessment of real property purchased or acquired by certain business enterprises at 100 percent of its fair market value; provide

26 LC 59 0301 House Bill 1228 By: Representatives McCollum of the 30th, Oliver of the 84th, Olaleye of the 59th, Panitch of the 51st, Gullett of the 19th, and others A BILL TO BE ENTITLED AN ACT To amend Chapter 5 of Title 48 of the Official Code of Georgia Annotated, relating to ad1 valorem taxation of property, so as to provide for the assessment of real property purchased2 or acquired by certain business enterprises at 100 percent of its fair market value; to require3 that proceeds from taxation of such property be used to reduce the ad valorem tax bill on4 homesteads in the same tax jurisdiction as such property; to provide for penalties; to provide5 for certification of ownership; to provide for forms and applic ations; to provide for6 definitions; to provide for contingent effectiveness and automa tic repeal; to provide for7 related matters; to repeal conflicting laws; and for other purposes.8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:9 SECTION 1.10 Chapter 5 of Title 48, relating to ad valorem taxation of prope rty, is amended by revising11 Code Section 48-5-3, relating to taxable property, as follows:12 "48-5-3.13 All real property including, but not limited to, leaseholds, in terests less than fee, and all14 personal property shall be liable to taxation and shall be taxe d, except as otherwise15 provided by law. Liability of property for taxation shall not be affected by the individual16 H. B. 1228 - 1 - 26 LC 59 0301 or corporate character of the property owner or by the resident or nonresident status of the17 property owner, except as otherwise provided by law."18 SECTION 2.19 Said chapter is further amended in Code Section 48-5-7, relating to assessment of tangible20 property, by adding a new subsection to read as follows:21 "(c.7) Tangible real property which qualifies as business enterprise property pursuant to22 the provisions of Code Section 48-5-7.8 shall be assessed at 100 percent of its fair market23 value and shall be taxed on a levy made by each respective taxing jurisdiction according24 to 100 percent of the property's fair market value."25 SECTION 3.26 Said chapter is further amended by adding a new Code section to read as follows:27 "48-5-7.8.28 (a) As used in this article, the term:29 (1) 'Affiliate' means any entity that directly or indirectly owns or controls, is owned or30 controlled by, or is under any other common ownership or contro l of a business31 enterprise.32 (2) 'Business enterprise' means a corporation, association, partnership, limited liability33 company, limited partnership, trust, issuer, or other private legal entity organized under34 the laws of this state, the United States, the District of Colu mbia, or any other state,35 territory, or dependency of the United States or under the laws of a foreign country.36 (3) 'Business enterprise property' means property owned by a b usiness enterprise,37 directly or indirectly, including, but not limited to, through one or more affiliates, that38 holds an interest in at least 1,000 single-family residential p roperties within this state39 which are used primarily for the purpose of generating rental i ncome. Such term shall40 H. B. 1228 - 2 - 26 LC 59 0301 not include an organization which maintains nonprofit status under Section 501(c)(3) of41 the Internal Revenue Code of 1986 and tax exempt status under Code Section 48-7-25.42 (4) 'Fiscal authority' means the individual authorized to coll ect ad valorem taxes for a43 county or municipality which levies ad valorem taxes.44 (5) 'Homestead' shall have the same meaning as set forth in Code Section 48-5-40.45 (b)(1) Except as otherwise provided in paragraph (2) of this subsection, each property46 owner of business enterprise property shall submit, by January 1, 2027, a certification of47 ownership of such property to the county board of tax assessors and shall include with48 such certification a copy of the recorded deed for the property and any other information49 required by the county board of tax assessors. The county boar d of tax assessors shall50 determine if the provisions of this Code section are applicable to such property and, upon51 such determination, such board shall impose an assessment on such property as provided52 for in subsection (c.7) of Code Section 48-5-7. The board shal l make a determination53 within 30 days after receiving any certification and shall notify the property owner in the54 same manner that notices of assessment are given pursuant to Code Section 48-5-306.55 (2) Each property owner of business enterprise property purchased or acquired on and56 after January 1, 2027, shall submit, within 90 days of the execution of a deed transferring57 title to such business enterprise property, a certification of ownership of such property to58 the county board of tax assessors and shall include with such certification a copy of the59 recorded deed for the property and any other information required by the county board60 of tax assessors. The county board of tax assessors shall determine if the provisions of61 this Code section are applicable to such property and, upon suc h determination, such62 board shall impose an assessment on such property as provided for in subsection (c.7) of63 Code Section 48-5-7. The board shall make a determination with in 30 days after64 receiving any certification and shall notify the property owner in the same manner that65 notices of assessment are given pursuant to Code Section 48-5-306.66 H. B. 1228 - 3 - 26 LC 59 0301 (c)(1) A penalty shall be imposed for any failure to comply wi th the certification67 requirement set forth in subsection (b) of this Code section. The penalty shall be twice68 the difference between the total amount of the tax paid under t his chapter and the total69 amount of taxes which would otherwise have been paid pursuant t o the assessment70 provided for in subsection (c.7) of Code Section 48-5-7. Any s uch penalty shall bear71 interest at the rate specified in Code Section 48-2-40 from Jan uary 1, 2027, for any72 property purchased or acquired before January 1, 2027, and from 90 days after the date73 of execution of a deed transferring title to such business ente rprise property, for any74 property purchased or acquired after January 1, 2027.75 (2) Penalties and interest imposed under this Code section shall constitute a lien against76 the property and shall be collected as other unpaid ad valorem taxes are collected. Such77 penalties and interest shall be distributed pro rata to each taxing jurisdiction wherein the78 assessment has been granted based upon the total amount by which such assessment has79 reduced taxes for each such taxing jurisdiction on the property in question as provided80 in this Code section.81 (d)(1) Property which has been classified by the county board of tax assessors as82 business enterprise property shall be immediately subject to the assessment provided for83 in subsection (c.7) of Code Section 48-5-7; provided, however, that, for the purposes of84 determining the years of applicability for such assessment, the tax year following the year85 in which the certification required under subsection (b) of this Code section was due shall86 be considered and counted as the first year of applicability.87 (2) Property which is subject to the assessment provided for in subsection (c.7) of Code88 Section 48-5-7 shall be separately classified from all other property on the tax digest, and89 such separate classification shall be such as to enable any person examining the tax digest90 to readily ascertain that the property is subject to such assessment.91 (e) At such time as property ceases to qualify as business enterprise property, the property92 owner shall file an application for release of the assessment provided for in subsection (c.7)93 H. B. 1228 - 4 - 26 LC 59 0301 of Code Section 48-5-7 with the county board of tax assessors and shall include with such94 application any other information required by such board. The board shall approve the95 release upon verification that all taxes and penalties with respect to the property have been96 satisfied. After the application for release has been approved by the board of tax assessors,97 such board shall file the release in the office of the clerk of the superior court in the county98 in which the original covenant was filed. Such clerk shall file and index such release in the99 real property records maintained in the clerk's office. No fee shall be paid to such clerk for100 recording such release.101 (f)(1) Any proceeds from taxes collected under the provisions of this Code section must102 be used to reduce the ad valorem tax bill on homesteads in the taxing jurisdiction within103 which the business enterprise property is located before such proceeds may be used for104 any other purpose.105 (2) Each fiscal authority collecting a tax under the provisions of this Code section shall106 provide an adjustment credit on the ad valorem tax bill of each homestead within such107 fiscal authority's taxing jurisdiction up to the taxpayer's ad valorem property tax liability108 on the homestead.109 (3) Credit amounts computed under paragraph (2) of this subsection shall be applied to110 reduce the otherwise applicable tax liability on a dollar-for-d ollar basis; provided,111 however, that the credit granted shall not in any case exceed the amount of the otherwise112 applicable tax liability after the granting of all applicable homestead exemptions, except113 for any homestead exemption under Article 2A of Chapter 8 of this title, the 'Homestead114 Option Sales and Use Tax Act,' as amended, and after the granti ng of all applicable115 millage rollbacks.116 (4) Each fiscal authority shall show the credit amount on the ad valorem tax bill.117 (g) Any credit under this Code section which is erroneously or illegally granted shall be118 recoverable by the fiscal authority granting such credit in the same manner as any other119 delinquent tax.120 H. B. 1228 - 5 - 26 LC 59 0301 (h) The commissioner shall by regulation provide uniform certification and release forms121 to be used in certifying ownership of business enterprise prope rty for the assessment122 provided for in subsection (c.7) of Code Section 48-5-7 and applying for release of such123 assessment. Such certification form shall include an oath or affirmation by the taxpayer124 that he or she is in compliance with subsection (b) of this Code section and has not failed125 to submit a certification of ownership of business enterprise property in the same or another126 county with respect to any property."127 SECTION 4.128 This Act shall become effectiv e on January 1, 2027, only if an amendment to the129 Constitution is ratified by the electors at the November, 2026, state-wide general election130 authorizing the General Assembly to define and establish a sepa rate class of property that131 includes only tangible real property qualifying as business ent erprise property and to132 establish a program by which certain properties within such class may be assessed for taxes133 at different rates or valuations. If such an amendment is not so ratified, this Act shall not134 become effective and shall stand repealed on January 1, 2027.135 SECTION 5.136 All laws and parts of laws in conflict with this Act are repealed.137 H. B. 1228 - 6 -