Bill Text: MS HB1340 | 2017 | Regular Session | Enrolled
Bill Title: Ad valorem tax; revise provisions on determining true value of agricultural land and land leased by State Port at Gulfport.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2017-04-12 - Approved by Governor [HB1340 Detail]
Download: Mississippi-2017-HB1340-Enrolled.html
MISSISSIPPI LEGISLATURE
2017 Regular Session
To: Revenue and Expenditure General Bills
By: Representatives Foster, Staples, Mangold, Pigott
House Bill 1340
(As Sent to Governor)
AN ACT TO AMEND SECTION 27-35-50, MISSISSIPPI CODE OF 1972, TO REVISE CERTAIN PROVISIONS REGARDING THE VARIATION OF TRUE VALUE FROM THE PREVIOUS YEAR FOR LAND USED FOR AGRICULTURAL PURPOSES; TO PROVIDE THE MANNER IN WHICH THE APPRAISAL OF GROUND LEASES ON REAL PROPERTY LEASED BY THE MISSISSIPPI STATE PORT AT GULFPORT SHALL BE MADE FOR THE PURPOSE OF ARRIVING AT THE TRUE VALUE OF THE PROPERTY FOR AD VALOREM PURPOSES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-35-50, Mississippi Code of 1972, is amended as follows:
27-35-50. (1) True value shall mean and include, but shall not be limited to, market value, cash value, actual cash value, proper value and value for the purposes of appraisal for ad valorem taxation.
(2) With respect to each
and every parcel of property subject to assessment, the tax assessor shall, in
ascertaining true value, consider whenever possible the income capitalization
approach to value, the cost approach to value and the market data approach to
value, as such approaches are determined by the * * * Department of Revenue.
For differing types of categories of property, differing approaches may be
appropriate. The choice of the particular valuation approach or approaches to
be used should be made by the assessor upon a consideration of the category or
nature of the property, the approaches to value for which the highest quality
data is available, and the current use of the property.
(3) Except as otherwise provided in subsection (4) of this section, in determining the true value of land and improvements thereon, factors to be taken into consideration are the proximity to navigation; to a highway; to a railroad; to a city, town, village or road; and any other circumstances that tend to affect its value, and not what it might bring at a forced sale but what the owner would be willing to accept and would expect to receive for it if he were disposed to sell it to another able and willing to buy.
(4) (a) In arriving at the true value of all Class I and Class II property and improvements, the appraisal shall be made according to current use, regardless of location.
(b) In arriving at the
true value of any land used for agricultural purposes, the appraisal shall be
made according to its use on January 1 of each year, regardless of its
location; in making the appraisal, the assessor shall use soil types,
productivity and other criteria set forth in the land appraisal manuals of the * * * Department of Revenue,
which criteria shall include, but not be limited to, an income capitalization
approach with a capitalization rate of not less than ten percent (10%) and a
moving average of not more than ten (10) years. However, for the year 1990,
the moving average shall not be more than five (5) years; for the year 1991,
not more than six (6) years; for the year 1992, not more than seven (7) years;
for the year 1993, not more than eight (8) years; and for the year 1994, not
more than nine (9) years; and for the year 1990, the variation up or down from
the previous year shall not exceed twenty percent (20%) and thereafter, the
variation, up or down, from a previous year shall not exceed ten percent (10%) through
the year 2018; and for the year 2019 and thereafter, the variation, up or down,
from a previous year shall not exceed four percent (4%). The land shall be
deemed to be used for agricultural purposes when it is devoted to the
commercial production of crops and other commercial products of the soil,
including, but not limited to, the production of fruits and timber or the
raising of livestock and poultry; however, enrollment in the federal
Conservation Reserve Program or in any other United States Department of
Agriculture conservation program shall not preclude land being deemed to be
used for agricultural purposes solely on the ground that the land is not being
devoted to the production of commercial products of the soil, and income
derived from participation in the federal program may be used in combination
with other relevant criteria to determine the true value of such land. The
true value of aquaculture shall be determined in the same manner as that used
to determine the true value of row crops.
(c) In determining the true value based upon current use, no consideration shall be taken of the prospective value such property might have if it were put to some other possible use.
(d) In arriving at the
true value of affordable rental housing, the assessor shall use the appraisal
procedure set forth in land appraisal manuals of the * * * Department of Revenue.
Such procedure shall prescribe that the appraisal shall be made according to
actual net operating income attributable to the property, capitalized at a market
value capitalization rate prescribed by the * * * Department of Revenue
that reflects the prevailing cost of capital for commercial real estate in the
geographical market in which the affordable rental housing is located adjusted
for the enhanced risk that any recorded land use regulation places on the net
operating income from the property. The owner of affordable rental housing
shall provide to the county tax assessor on or before April 1 of each year, an
accurate statement of the actual net operating income attributable to the
property for the immediately preceding year prepared in accordance with
generally acceptable accounting principles. As used in this paragraph:
(i) "Affordable rental housing" means residential housing consisting of one or more rental units, the construction and/or rental of which is subject to Section 42 of the Internal Revenue Code (26 USC 42), the Home Investment Partnership Program under the Cranston-Gonzalez National Affordable Housing Act (42 USC 12741 et seq.), the Federal Home Loan Banks Affordable Housing Program established pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 (Public Law 101-73), or any other federal, state or similar program intended to provide affordable housing to persons of low or moderate income and the occupancy and maximum rental rates of such housing are restricted based on the income of the persons occupying such housing.
(ii) "Land use regulation" means a restriction imposed by an extended low-income housing agreement or other covenant recorded in the applicable land records or by applicable law or regulation restricting the maximum income of residents and/or the maximum rental rate in the affordable rental housing.
(e) In arriving at the true value of ground leases on real property leased by the Mississippi State Port at Gulfport, the assessor shall use the appraisal procedure set forth in land appraisal manuals of the Department of Revenue. Such procedure shall prescribe that the appraisal shall be made according to actual net ground rent attributable to the leased premises, capitalized at a market value capitalization rate prescribed by the Department of Revenue that reflects the prevailing cost of capital of commercial real estate in the geographical market in which the Mississippi State Port at Gulfport is located. As used in this paragraph (e):
(i) "Ground leases" means those leases of land where the Mississippi State Port at Gulfport is the landlord and a person or business entity is the tenant.
(ii) "Ground rent" means the rent paid to the Mississippi State Port at Gulfport in a set amount for a specific length of tenancy where the amount of rent may be adjusted from time to time based upon market indices, such as the consumer price index. Ground rent does not include percentage rent and rent based on improvements or any other type of rental payment.
(iii) "Percentage rent" means the rent paid to the Mississippi State Port at Gulfport that is calculated based upon revenue generated by the tenant by virtue of the ground lease.
(iv) "Rent based on improvements" means the rent paid to the Mississippi State Port at Gulfport that is calculated based upon investments in improvements to the leased premises made by tenant.
(5) The true value of each class of property shall be determined annually.
(6) The * * * Department of Revenue
shall have the power to adopt, amend or repeal such rules or regulations in a
manner consistent with the Constitution of the State of Mississippi to
implement the duties assigned to the * * * department in this section.
SECTION 2. This act shall take effect and be in force from and after July 1, 2017.
