HB1457: HB1457 Ad valorem tax; preferential assessment of affordable home use property; provide

26 LC 44 3376 House Bill 1457 By: Representatives Lim of the 98th, Lupton of the 83rd, Wilkerson of the 38th, and Carpenter of the 4th 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 regarding ad valorem taxation of property, so as to provide for2 preferential assessment of affordable home use property; to pro vide for procedures,3 conditions, and limitations; to provide for powers, duties, and authority of county tax4 commissioners and the Department of Community Affairs with respect to the foregoing; to5 provide for definitions; to provide for contingent effectivenes s and automatic repeal; to6 provide for related matters; to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Article 1 of Chapter 5 of Title 48 of the Official Code of Geor gia Annotated, relating to10 general provisions regarding ad valorem taxation of property, is amended by adding a new11 Code section to read as follows:12 "48-5-7.8.13 (a) As used in this Code section, the term 'affordable home use property' means property14 intended to be used for private single-family residential occupancy not to exceed five acres15 and to be sold to a single low-income family owner.16 H. B. 1457 - 1 - 26 LC 44 3376 (b) No property shall qualify for current use assessment as affordable home use property17 under this Code section unless and until the owner of such prop erty agrees by covenant18 with the appropriate taxing authority to maintain the eligible property in bona fide19 qualifying use for a period of ten years beginning on the first day of January of the year in20 which such property qualifies for such current use assessment and ending on the last day21 of December of the final year of the covenant period. After the owner has applied for and22 has been allowed current use assessment provided for in this Code section, it shall not be23 necessary to make application thereafter for any year in which the covenant period is in24 effect and current use assessment shall continue to be allowed such owner as specified in25 this Code section. At least 60 days prior to the expiration date of the covenant, the county26 board of tax assessors shall send by first-class mail written notification of such impending27 expiration. Upon the expiration of any covenant period, the property shall not qualify for28 further current use assessment under this Code section unless a nd until the owner of the29 property has entered into a renewal covenant for an additional period of ten years;30 provided, however, that the owner may enter into a renewal contract in the ninth year of31 a covenant period so that the contract is continued without a l apse for an additional ten32 years.33 (c) An owner shall not be authorized to make application for a nd receive current use34 assessment under this Code section for any property which at the time of such application35 is receiving preferential assessment under Code Section 48-5-7.1, except that such owner36 shall be authorized to change such preferential assessment covenant in the manner provided37 for in subsection (s) of Code Section 48-5-7.1.38 (d) Except as otherwise provided in this subsection, no proper ty shall maintain its39 eligibility for current use assessment under this Code section unless a valid covenant40 remains in effect and unless the property is continuously devoted to an applicable bona fide41 qualifying use during the entire period of the covenant.42 H. B. 1457 - 2 - 26 LC 44 3376 (e) If any breach of a covenant occurs, the existing covenant shall be terminated and all43 qualification requirements must be met again before the propert y shall be eligible for44 current use assessment under this Code section.45 (f)(1) If ownership of all or a part of the property is acquired during a covenant period46 by a person or entity qualified to enter into an original coven ant, then the original47 covenant may be continued by such acquiring party for the remai nder of the term, in48 which event no breach of the covenant shall be deemed to have occurred.49 (2)(A) As used in this paragraph, the term 'contiguous' means real property within a50 county that abuts, joins, or touches and has the same undivided common ownership. 51 If an applicant's tract is divided by a count y boundary, public roadway, public52 easement, public right of way, natural boundary, land lot line, or railroad track, then the53 applicant has, at the time of the initial application, a one-ti me election to declare the54 tract as contiguous irrespective of a county boundary, public roadway, public easement,55 public right of way, natural boundary, land lot line, or railroad track.56 (B) If a qualified owner has entered into an original covenan t and subsequently57 acquires additional qualified property contiguous to the proper ty in the original58 covenant, the qualified owner may elect to enter the subsequent ly acquired qualified59 property into the original covenant for the remainder of the te n-year period of the60 original covenant; provided, however, that such subsequently ac quired qualified61 property shall be less than 50 acres.62 (g)(1) All applications for current use assessment under this Code section, including the63 covenant agreement required under this Code section, shall be filed on or before the last64 day for filing ad valorem tax returns in the county for the tax year for which such current65 use assessment is sought, except th at in the case of property w hich is the subject of a66 reassessment by the board of tax assessors an application for current use assessment may67 be filed in conjunction with or in lieu of an appeal of the reassessment. An application68 for continuation of such current use assessment upon a change in ownership of all or a69 H. B. 1457 - 3 - 26 LC 44 3376 part of the qualified property shall be filed on or before the last date for filing tax returns70 in the year following the year in which the change in ownership occurred. Applications71 for current use assessment under this Code section shall be filed with the county board72 of tax assessors who shall approve or deny the application. Th e county board of tax73 assessors shall file a copy of the approved application in the office of the clerk of the74 superior court in the county in which the eligible property is located. The clerk of the75 superior court shall file and index such application in the real property records maintained76 in the clerk's office. If the application is not so recorded in the real property records, a77 transferee of the property affected shall not be bound by the covenant or subject to any78 penalty for its breach. The fee of the clerk of the superior c ourt for recording such79 application shall be paid by the owner of the eligible property with the application for80 preferential treatment and shall be paid to the clerk by the board of tax assessors when81 the application is filed with the clerk. If the application is denied, the board of tax82 assessors shall notify the applicant in the same manner that no tices of assessment are83 given pursuant to Code Section 48-5-306 and shall return any filing fees advanced by the84 owner. Appeals from the denial of an application by the board of tax assessors shall be85 made in the same manner that other property tax appeals are mad e pursuant to Code86 Section 48-5-311.87 (2) If the final determination on appeal to superior court is to approve the application for88 current use assessment, the taxpayer shall recover costs of lit igation and reasonable89 attorney's fees incurred in the action.90 (3) Any final determination on appeal that causes a reduction in taxes and creates a91 refund that is owed to the taxpayer shall be paid by the tax co mmissioner to such92 taxpayer, entity, or transferee that paid the taxes within 60 days from the date of the final93 determination of value. Such refund shall include interest at the same rate specified in94 Code Section 48-2-35 which shall accrue from the due date of th e taxable year in95 question or the date paid, whichever is later, through the date on which the final96 H. B. 1457 - 4 - 26 LC 44 3376 determination of value was made. In no event shall the amount of such interest exceed97 $5,000.00. Any refund paid after the sixtieth day shall accrue interest from the sixty-first98 day until paid with interest at the same rate specified in Code Section 48-2-35. The99 interest accrued after the sixtieth day shall not be subject to the limits imposed by this100 subsection. The tax commissioner shall pay the tax refund and any interest for the refund101 from current collections in the same proportion for each of the levying authorities for102 which the taxes were collected.103 (4) For the purposes of this Code section, any final determination on appeal that causes104 an increase in taxes and creates an additional billing shall be paid to the tax commissioner105 as any other tax due. After the tax bill notice has been maile d, the taxpayer shall be106 afforded 60 days from the date of the postmark to make full payment of the adjusted bill.107 Once the 60 day payment period has expired, the bill shall be c onsidered past due and108 interest shall accrue from the original billing due date as spe cified in Code Section109 48-2-40 without limit until the bill is paid in full. Once past due, all other fees, penalties,110 and late and collection notices shall apply as prescribed in this chapter for the collection111 of delinquent taxes.112 (5) In the event such application is approved, the taxpayer sh all continue to receive113 annual notification of any change in the fair market value of s uch property and any114 appeals with respect to such valuation shall be made in the same manner as other property115 tax appeals are made pursuant to Code Section 48-5-311.116 (h) The Department of Community Affairs shall by regulation provide uniform application117 and covenant forms to be used in making application for current use assessment under this118 Code section.119 (i) In the case of an alleged breach of the covenant, the owner shall be notified in writing120 by the board of tax assessors. The owner shall have a period of 30 days from the date of121 such notice to cease and desist the activity alleged in the not ice to be in breach of the122 covenant or to remediate or correct the condition or conditions alleged in the notice to be123 H. B. 1457 - 5 - 26 LC 44 3376 in breach of the covenant. Following a physical inspection of property, the board of tax124 assessors shall notify the owner that such activity or activities have or have not properly125 ceased or that the condition or conditions have or have not been remediated or corrected.126 The owner shall be entitled to appeal the decision of the board of tax assessors and file an127 appeal disputing the findings of the board of tax assessors. Such appeal shall be conducted128 in the same manner that other property tax appeals are made pur suant to Code Section129 48-5-311. If the final determination on appeal to superior court is to reverse the decision130 of the board of tax assessors to enforce the breach of the cove nant, the taxpayer shall131 recover costs of litigation and reasonable attorney's fees incurred in the action.132 (j) A penalty shall be imposed under this subsection if the covenant is breached during the133 period of the covenant entered into by a taxpayer. The penalty shall be applicable to the134 entire tract which is the subject of the covenant and shall be twice the difference between135 the total amount of tax paid pursuant to current use assessment under this Code section and136 the total amount of taxes which would otherwise have been due under this chapter for each137 completed or partially completed year of the covenant period. No penalty shall be imposed138 until the appeal of the board of tax assessors' determination of breach is concluded. After139 the final determination on appeal, the taxpayer shall be afforded 60 days from issuance of140 the bill to make full payment. Once the 60 day payment period has expired, the bill shall141 be considered past due and interest shall accrue from the origi nal billing due date as142 specified in Code Section 48-2-40 without limit until the bill is paid in full. Once past due,143 all other fees, penalties, and late and collection notices shal l apply as prescribed in this144 chapter for the collection of delinquent taxes.145 (k) Penalties and interest imposed under this Code section shall constitute a lien against146 the property and shall be collected in the same manner as unpai d ad valorem taxes are147 collected. Such penalties and interest shall be distributed pr o rata to each taxing148 jurisdiction wherein current use assessment under this Code section has been granted based149 H. B. 1457 - 6 - 26 LC 44 3376 upon the total amount by which such current use assessment has reduced taxes for each150 such taxing jurisdiction on the property in question as provided in this Code section.151 (l) Property which is subject to current use assessment under this Code section shall be152 separately classified from all other property on the tax digest ; and such separate153 classification shall be such as will enable any person examining the tax digest to ascertain154 readily that the property is subject to current use assessment under this Code section.155 Covenants shall be public records and shall be indexed and maintained in such manner as156 will allow members of the public to locate readily the covenant affecting any particular157 property subject to current use assessment under this Code section. Based on information158 submitted by the county boards of tax assessors, the Department of Community Affairs159 shall maintain a central registry of property, indexed by owners, so as to ensure that the160 2,000 acre limitations of this Code section are complied with on a state-wide basis."161 SECTION 2.162 This Act shall become effective on January 1, 2027, only if an amendment to the163 Constitution is ratified by the electors at the November, 2026, state-wide general election164 authorizing the General Assembly to provide for the special ass essment and taxation of165 affordable home use property. If such an amendment is not so r atified, this Act shall not166 become effective and shall stand repealed on January 1, 2027.167 SECTION 3.168 All laws and parts of laws in conflict with this Act are repealed.169 H. B. 1457 - 7 -