Bill Text: MS HB835 | 2013 | Regular Session | Introduced
Bill Title: Ad valorem tax; revise manner of determining true value of affordable rental housing and exempt portion of true value from.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2013-02-27 - Died In Committee [HB835 Detail]
Download: Mississippi-2013-HB835-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Ways and Means
By: Representative Smith (39th)
House Bill 835
AN ACT TO AMEND SECTION 27-35-50, MISSISSIPPI CODE OF 1972, TO REVISE THE METHOD OF DETERMINING THE TRUE VALUE OF AFFORDABLE RENTAL HOUSING FOR THE PURPOSES OF AD VALOREM TAXATION; TO PROVIDE THAT SIXTY-FIVE PERCENT OF THE TRUE VALUE OF AFFORDABLE RENTAL HOUSING SHALL BE EXEMPT FROM AD VALOREM TAXATION; TO AMEND SECTION 27-35-113, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE DEPARTMENT OF REVENUE TO PLACE INTO ESCROW THE HOMESTEAD EXEMPTION REIMBURSEMENT OF A COUNTY FOR FAILURE TO COMPLY WITH THE METHOD OF DETERMINING THE TRUE VALUE OF AFFORDABLE RENTAL HOUSING AS PROVIDED FOR IN THIS ACT; TO AMEND SECTION 11-51-77, MISSISSIPPI CODE OF 1972, TO REVISE THE AMOUNT OF THE BOND REQUIRED FOR THE APPEAL OF THE ASSESSMENT OF TAXES; 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%). 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 * * *
following
methods: (i) For new affordable rental housing, the true
value shall consist of the sum total of the following costs reflected in the
independent cost certification:
1. Hard construction costs indicated in the Contractor's Certificate of Actual Cost portion of the independent cost certification; and
2. Land costs.
(ii) For rehabilitated affordable rental housing, the true value shall consist of the sum total of the following costs reflected in the independent cost certification:
1. Hard construction costs indicated in the Contractor's Certificate of Actual Cost portion of the independent cost certification;
2. Land costs; and
3. Acquisition costs.
The owner of affordable rental housing shall provide to the county tax assessor on or before April 1 of each calendar year, a copy of the independent cost certification for affordable rental housing placed into service and/or such property subject to ad valorem taxation during the preceding calendar year. 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) "Independent cost certification" means the independent cost certification that is:
1. Required to be prepared and to be submitted to the Mississippi Home Corporation under Section 42 of the United States Internal Revenue Code;
2. Prepared by an independent certified public accountant; and
3. Submitted to the Mississippi Home Corporation, for which the submission to and receipt by the Mississippi Home Corporation has been verified by the Mississippi Home Corporation.
( * * *iii) "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.
(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. From and after January 1, 2013, sixty-five percent (65%) of the true value of affordable rental housing shall be exempt from ad valorem taxation. For the purposes of this section, the term "affordable rental housing" means and has the same definition as that term has in Section 27-35-50.
SECTION 3. Section 27-35-113, Mississippi Code of 1972, is amended as follows:
27-35-113. (1) It shall be the duty of the Department of Revenue to carefully examine the recapitulations of the assessment rolls of the counties, when received, to compare the assessed valuation of the various classes of property in the respective counties, to investigate and determine if the assessed valuation of any classes of property in any one or more counties of the state is not equal and uniform with the assessed values fixed upon the same classes of property in other counties of the state, and to ascertain if any class of property in any one or more counties is assessed contrary to law.
(2) The department shall, by regulation, establish performance standards and acceptable parameters for evaluation of the accuracy of assessments. These standards shall include, but not be limited to, the following:
(a) Assessment level: The ratio of assessments to current true value or market value;
(b) Assessment uniformity: The test of uniformity or fairness of individual assessments; and
(c) Assessment equity: The test of price-related bias.
(3) To perform its examination of the recapitulations of the assessment rolls of the counties, the department shall annually conduct assessment/ratio studies of each county or utilize other means, as determined appropriate by the department, to determine if each county's assessment records comply with acceptable performance standards. The department shall send notice of the results of this examination to the assessor and the board of supervisors of each county no later than thirty (30) days after receipt of the board of supervisors' recapitulation. Any county not in compliance with the acceptable performance standards shall, within ninety (90) days from the date of the notice concerning the department's examination of the county's assessments records, adopt and submit to the department for approval a plan for achieving compliance and begin the implementation of the plan so that compliance can be achieved by the second succeeding year's assessment roll after the tax year for which the department's notice of noncompliance with performance standards was issued. Failure to adopt and submit an approved plan for achieving compliance or failure to properly implement and follow an approved plan shall cause the department to withhold the county's homestead exemption reimbursement monies until such time as the county has complied with this provision. In the event the county has not complied with this provision by the end of the state's fiscal year, then the department shall place the funds so held in a special escrow account. All interest shall accrue to the benefit of the county on this account.
(4) The department shall approve the recapitulation of the assessment rolls and the property tax rolls of any county operating under a supervised plan to achieve compliance within the first two (2) roll years as provided for in the paragraph above, notwithstanding that the county may be failing a test or tests of the accuracy or equity of assessment.
(5) Any county failing to achieve such compliance for the second succeeding year's assessment roll as outlined above shall be subject to the following restrictions until such time as said tax rolls come into compliance:
(a) The department shall place into escrow all homestead exemption reimbursements;
(b) The county shall levy and pay over to the department, for purposes of being placed in the escrow account, the proceeds of the one (1) mill levy provided for in Section 27-39-329(1)(b). All interest shall accrue to the benefit of the county on any funds placed in an escrow account; and
(c) The department shall identify the class or classes of property whose assessment level is not in conformity with the regulation of the department governing same, and shall have the authority to adjust and equalize that class or classes of property by, either requiring a fixed percent (1) to be added to the assessed valuation of any class of property in any county found too low; or (2) to be deducted from the assessed valuation of any class of property found too high; in order that the class or classes of property are being assessed in conformity with the department's regulation.
(6) Once the county achieves compliance with the standard of performance as to assessment level, uniformity and equity as established by the rules and regulations of the Department of Revenue, the department shall release to the county all funds held in escrow on its behalf during the period of noncompliance.
(7) The board of supervisors of any county aggrieved by the decision of the department regarding the department's examination of the recapitulations of its assessment rolls may appeal such decision to the Board of Tax Appeals within thirty (30) days from the date of the notice from the department advising the county of the results of the department's examination of the recapitulation of the assessment rolls of the county. The Board of Tax Appeals shall hear the objections by the board of supervisors and grant whatever relief it deems appropriate; however, the Board of Tax Appeals shall not have the authority to grant relief which is inconsistent with this section. The decision of the Board of Tax Appeals shall be final.
(8) In addition to any other authority granted under this section, if a county fails to comply with the provisions of Section 27-35-50 regarding the determination of true value of affordable rental housing, the department may place into escrow all homestead exemption reimbursements otherwise due to the county. For the purposes of this subsection, the term "affordable rental housing" means and has the same definition as that term has in Section 27-35-50.
( * * *9) It is the intent of this section
and that of this chapter to vest the Department of Revenue with authority to
investigate and determine the assessed valuation of classes of property, and to
further establish and/or clarify that tax assessors and the boards of
supervisors are vested with the absolute authority to investigate and determine
the assessed valuations of individual parcels of property located in their
particular county in a manner consistent with the laws of this state.
SECTION 4. Section 11-51-77, Mississippi Code of 1972, is amended as follows:
11-51-77. Any person
aggrieved by a decision of the board of supervisors or the municipal
authorities of a city, town or village, as to the assessment of taxes, may,
within ten (10) days after the adjournment of the meeting at which such
decision is made, appeal to the circuit court of the county, upon giving
bond,with sufficient sureties, in * * * the amount of the matter in dispute, but
never less than One Hundred Dollars ($100.00), payable to the state, and
conditioned to perform the judgment of the circuit court, and to be approved by
the clerk of such board, who, upon the filing of such bond, shall make a true
copy of any papers on file relating to such controversy, and file such copy
certified by him, with said bond, in the office of the clerk of the circuit
court, on or before its next term. The controversy shall be tried anew in the
circuit court at the first term, and be a preference case, and, if the matter
be decided against the person who appealed, judgment shall be rendered on the
appeal bond for damages at the rate of ten percent (10%) on the
amount in controversy and all costs. If the matter be decided in favor of the
person who appealed, judgment in his favor shall be certified to the board of
supervisors, or the municipal authorities, as the case may be, which shall
conform thereto, and shall pay the costs. The county attorney, the district
attorney, or the Attorney General, if the state, county or municipality be aggrieved
by a decision of the board of supervisors or the municipal authorities of a
city, town, or village as to the assessment of taxes, may, within twenty (20)
days after the adjournment of the meeting at which such decision is made, or
within twenty (20) days after the adjournment of the meeting at which
the assessment rolls are corrected in accordance with the instructions of the * * * Department of Revenue,
or within twenty (20) days after the adjournment of the meeting of the
board of supervisors at which the approval of the roll by the * * * Department of Revenue
is entered, appeal to the circuit court of the county in like manner as in the
case of any person aggrieved as hereinbefore provided, except no bond shall be
required, and such appeal may be otherwise governed by the provisions of this
section.
SECTION 5. This act shall take effect and be in force from and after January 1, 2013.
