SB576: SB576 Ad Valorem Taxation; assessment of tangible real property used for community housing provider properties; provide

26 LC 59 0403S 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 Cod e of Georgia Annotated,1 relating to general provisions relative to ad valorem taxation of property, so as to provide for2 assessment of tangible real property used for community housing provider properties; to3 provide for supporting affidavits; to provide for definitions; to provide for related matters;4 to repeal conflicting laws; and for other purposes.5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6 SECTION 1.7 Article 1 of Chapter 5 of Title 48 of the Official Code of Geor gia Annotated, relating to8 general provisions relative to ad valorem taxation of property, is amended in Code9 Section 48-5-2, relating to definitions regarding ad valorem taxation of property generally,10 by revising paragraph (3) and adding new paragraphs to read as follows:11 "(.2) 'Community housing provider' means:12 (A) A housing provider that is either a natural person, a nonp rofit corporation, or a13 charitable organization; or14 (B) A Subchapter 'S' corporation, limited liability company, or partnership that does15 not own in excess of 500 properties in this state, either directly or indirectly, in common16 - 1 - 26 LC 59 0403S ownership with any corporation, association, partnership, limit ed liability company,17 limited partnership, trust, issuer, or other private legal entity organized under the laws18 of this state, the United States, the District of Columbia, or any other state, territory, or19 dependency of the United States or under the laws of a foreign country."20 "(3) 'Fair market value of property' means the amount a knowledgeable buyer would pay21 for the property and a willing seller would accept for the property at an arm's length, bona22 fide sale. The income approach, if data are available, shall be considered in determining23 the fair market value of income-producing property. If actual income and expense data24 are voluntarily supplied by the property owner, such data shall be considered in such25 determination. A housing provider that is not a community hous ing provider shall26 provide the tax assessor the data necessary to use an income approach, upon request of27 the tax assessor. With respect to the valuation of equipment, machinery, and fi xtures28 when no ready market exists for the sale of the equipment, machinery, and fixtures, fair29 market value may be determined by resorting to any reasonable, relevant, and useful30 information available, including, but not limited to, the original cost of the property, any31 depreciation or obsolescence, and any increase in value by reason of inflation. Each tax32 assessor shall have access to any public records of the taxpaye r for the purpose of33 discovering such information.34 (A) In determining the fair market value of a going business w here its continued35 operation is reasonably anticipated, the tax assessor may value the equipment,36 machinery, and fixtures which are the property of the business as a whole where37 appropriate to reflect the accurate fair market value.38 (B) The tax assessor shall apply the following criteria in determining the fair market39 value of real property:40 (i) Existing zoning of property;41 - 2 - 26 LC 59 0403S (ii) Existing use of property, including any restrictions or l imitations on the use of42 property resulting from state or federal law or rules or regulations adopted pursuant43 to the authority of state or federal law;44 (iii) Existing covenants or restrictions in deed dedicating the property to a particular45 use;46 (iv) Bank sales, other financial institution owned sales, or d istressed sales, or any47 combination thereof, of comparable real property;48 (v) Decreased value of the property based on limitations and r estrictions resulting49 from the property being in a conservation easement;50 (vi) Rent limitations, higher operating costs resulting from regulatory requirements51 imposed on the property, and any other restrictions imposed upo n the property in52 connection with the property being eligible for any income tax credits with respect to53 real property which are claimed and granted pursuant to either Section 42 of the54 Internal Revenue Code of 1986, as amended, or Chapter 7 of this title or receiving any55 other state or federal subsidies provided with respect to the u se of the property as56 residential rental property; provided, however, that properties described in this57 division shall not be considered comparable real property for the assessment or appeal58 of assessment of properties not covered by this division;59 (vii)(I) In establishing the value of any property subject to rent restrictions under60 the sales comparison approach, any income tax credits described in division (vi) of61 this subparagraph that are attributable to a property may be co nsidered in62 determining the fair market value of the property, provided that the tax assessor uses63 comparable sales of property which, at the time of the comparable sale, had unused64 income tax credits that were transferred in an arm's length, bona fide sale.65 (II) In establishing the value of any property subject to rent restrictions under the66 income approach, any income tax credits described in division ( vi) of this67 subparagraph that are attributable to property may be considered in determining the68 - 3 - 26 LC 59 0403S fair market value of the property, provided that such income ta x credits generate69 actual income to the record holder of title to the property; and70 (viii) Any other existing factors provided by law or by rule a nd regulation of the71 commissioner deemed pertinent in arriving at fair market value.72 (B.1) The tax assessor shall not consider any income tax credi ts with respect to real73 property which are claimed and granted pursuant to either Secti on 42 of the Internal74 Revenue Code of 1986, as amended, or Chapter 7 of this title in determining the fair75 market value of real property.76 (B.2) In determining the fair market value of real property, the tax assessor shall not77 include the value of any intangible assets used by a business, wherever located,78 including patents, trademarks, trade names, customer agreements, and merchandising79 agreements.80 (C) Fair market value of 'rehabilitated historic property' as such term is defined in81 subsection (a) of Code Section 48-5-7.2 means:82 (i) For the first eight years in which the property is classified as rehabilitated historic83 property, the value equal to the greater of the acquisition cost of the property or the84 appraised fair market value of the property as recorded in the county tax digest at the85 time preliminary certification on such property was received by the county board of86 tax assessors pursuant to subsection (c) of Code Section 48-5-7.2;87 (ii) For the ninth year in which the property is classified as rehabilitated historic88 property, the value of the property as determined by division (i) of this subparagraph89 plus one-half of the difference between such value and the current fair market value90 exclusive of the provisions of this subparagraph; and91 (iii) For the tenth and following years, the fair market value of such property as92 determined by the provisions of this paragraph, excluding the p rovisions of this93 subparagraph.94 - 4 - 26 LC 59 0403S (D) Fair market value of 'landmark historic property' as such term is defined in95 subsection (a) of Code Section 48-5-7.3 means:96 (i) For the first eight years in which the property is classif ied as landmark historic97 property, the value equal to the greater of the acquisition cost of the property or the98 appraised fair market value of the property as recorded in the county tax digest at the99 time certification on such property was received by the county board of tax assessors100 pursuant to subsection (c) of Code Section 48-5-7.3;101 (ii) For the ninth year in which the property is classified as landmark historic102 property, the value of the property as determined by division (i) of this subparagraph103 plus one-half of the difference between such value and the current fair market value104 exclusive of the provisions of this subparagraph; and105 (iii) For the tenth and following years, the fair market value of such property as106 determined by the provisions of this paragraph, excluding the p rovisions of this107 subparagraph.108 (E) Timber shall be valued at its fair market value at the time of its harvest or sale in109 the manner specified in Code Section 48-5-7.5.110 (F) Fair market value of 'brownfield property' as such term is defined in subsection (a)111 of Code Section 48-5-7.6 means:112 (i) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6,113 for the first ten years in which the property is classified as brownfield property, or as114 this period of preferential assessment may be extended pursuant to subsection (o) of115 Code Section 48-5-7.6, the value equal to the lesser of the acq uisition cost of the116 property or the appraised fair market value of the property as recorded in the county117 tax digest at the time application was made to the Environmental Protection Division118 of the Department of Natural Resources for participation under Article 9 of Chapter 8119 of Title 12, the 'Georgia Brownfield Act,' as amended; and120 - 5 - 26 LC 59 0403S (ii) Unless sooner disqualified pursuant to subsection (e) of Code Section 48-5-7.6,121 for the eleventh and following years, or at the end of any extension of this period of122 preferential assessment pursuant to subsection (o) of Code Section 48-5-7.6, the fair123 market value of such property as determined by the provisions o f this paragraph,124 excluding the provisions of this subparagraph.125 (G) Fair market value of 'qualified timberland property' means the fair market value126 determined in accordance with Article 13 of this chapter."127 "(7) 'Housing provider' means an owner of a single-family resid ential property which128 owner does not reside in the property, but offers the property, for a fee, to another to be129 used as a residence.130 (8) 'Housing provider services' means providing a single-family residential property to131 another, for a fee, to be used as the residence of an individual other than the owner of the132 property."133 SECTION 2.134 Said article is further amended in Code Section 48-5-7, relatin g to assessment of tangible135 property, by adding a new subsection to read as follows:136 "(c.7)(1)(A) Except as provided in subparagraph (B) of this par agraph, tangible real137 property used for housing provider services and owned by a housing provider may be138 assessed for ad valorem property tax purposes at 100 percent of the value which other139 tangible real property is assessed and shall be taxed on a levy made by each respective140 tax jurisdiction according to said assessment.141 (B) Tangible real property used for housing provider services and owned by a142 community housing provider shall be assessed for ad valorem property tax purposes at143 40 percent of the value which other tangible real property is assessed and shall be taxed144 on a levy made by each respective tax jurisdiction according to said assessment.145 - 6 - 26 LC 59 0403S (2) The tax assessor may require an authorized representative of a community housing146 provider to file, not later than April 1 of each year, a sworn affidavit establishing that147 tangible real property is not used for housing provider services or that such community148 housing provider is in fact a community housing provider."149 SECTION 3.150 All laws and parts of laws in conflict with this Act are repealed.151 - 7 -