Vote Smart's Synopsis:

Vote to pass a bill that establishes property tax exemptions for real estate taxed at the 6 percent rate.

Highlights:

-Authorizes an exemption of an amount of fair market value of a parcel of real property and improvements sufficient to eliminate any increase in fair market value as determined in the appraisal at the time of the assessable transfer of interest over the property tax value when the following is met (Sec. 1):

-The property is subject to the 6 percent assessment ratio and subject to property tax; and -The property undergoes an assessable transfer of interest in property tax year 2010.

-Authorizes a 20 percent exemption of fair market value of a parcel of real property and improvements as determined in the appraisal at the time of the assessable transfer of interest when the following is met (Sec. 1):

-The property is subject to the 6 percent assessment ratio and subject to property tax; and -The property undergoes an assessable transfer of interest after property tax year 2010.

-Exempts property from the tax exemption if the following conditions are present (Sec.1):

-The exemption would reduce the fair market value of a parcel of real property and improvements below the fair market value of the parcel as previously carried on the books of the property tax assessor; or -The fair market value of the parcel as determined in the appraisal at the time of the assessable transfer of interest is lower than the fair market value of the parcel as previously carried on the books.

-Specifies that the exemptions continue to apply until the parcel undergoes another assessable transfer of interest (Sec. 1). -Exempts from the exemptions the fair market value of additions or improvements made to the parcel not previously subject to property tax (Sec. 1). -Requires that the owner of the property or the owner's agent notify the county assessor that the property will be subject to the 6 percent assessment ratio before January 31 for the tax year for which the owner first claims eligibility for the exemption in order for the exemption to be applied (Sec. 1). -Specifies that the exemptions shall no longer be effective if the property does not remain subject to the 6 percent assessment ratio for at least 5 tax years following the assessable transfer of interest (Sec. 1). -Specifies that the above highlights apply to property tax years beginning after 2009 (Sec. 1). -Specifies that an assessable transfer of interest does not include the following (Sec. 2):

-A transfer of an undivided, fractional ownership interest in real estate in a single transaction or as a part of a series of related transactions, if the ownership interest or interests conveyed, or otherwise transferred, in the single transaction or series of related transactions within a 25 year period, is not more than 50 percent of the entire fee simple title to the real estate; -A transfer to a single member limited liability company, not taxed separately as a corporation, by its single member or a transfer from a single member limited liability company, not taxed separately as a corporation, to its single member; -A conveyance, assignment, release, or modification of an easement, including, but not limited to, the following:
-A conservation easement (Chapter 8 of Title 27); -A utility easement; or -An easement for ingress, egress, or regress;
-A transfer or renunciation by deed, release, or agreement of a claim of interest in real property for the purpose of quieting and confirming title to real property in the name of one or more of the existing owners of the real property or for the purpose of confirming or establishing the location of an uncertain or disputed boundary line; -The execution or recording of a deed to real property for the purpose of creating or terminating a joint tenancy with rights of survivorship, provided the grantors and grantees are the same; -A conveyance by deed, distribution under a will, or by intestate succession of real property, subject to the special 4 percent assessment ratio, to a child or children of the grantor or decedent; -A conveyance to a trust of real property, subject to the special 4 percent assessment ratio, and the sole present beneficiary or beneficiaries of the trust is a child or children of the settler; -A transfer of no more than a fifth of an interest in real property by an individual or individuals to another individual or individuals; or -A transfer of an ownership interest in a single transaction or as a part of a series of related transactions within a 25 year period in a corporation, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity if the ownership interest conveyed is more than 50 percent of the corporation, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity, unless the transfer is not subject to federal income tax.

-Authorizes any increase, allowed but not previously imposed, for the three property tax years preceding the year to which the current limit applies to be added to the operating millage by a local governing body (Sec. 3). -Specifies that rollback millage is calculated by dividing the prior year property taxes levied as adjusted by abatements, additions, and nulla bona returns by the adjusted total assessed value applicable in the year the values derived from a countywide equalization and reassessment program are implemented and that this amount of assessed value must be adjusted by deducting assessments added for property or improvements not previously taxed, for new construction, for renovation of existing structures, and assessments attributable to increases in value due to an assessable transfer of interest (Sec. 4). -Establishes the Index of Taxpaying Ability Study Committee for the purpose of examining the index of taxpaying ability and its relationship to Education Finance Act resources available to the individual school districts in support of the education foundation program required by the State, and the manner in which the index is calculated and the impact of this act on the calculations (Sec. 5). -Requires the Committee to be composed of the following (Sec. 5):

-4 members appointed by the President Pro Tempore of the Senate; and -4 members appointed by the Speaker of the House of Representatives.

-Requires the members to serve without compensation for per diem, mileage, and subsistence (Sec. 5). -Specifies that the issuance of a permit is not de facto proof of an addition or improvement and is not conclusive evidence of an assessable transfer of interest (Sec. 6). -Requires that the county assessor have the burden of proof of showing that the higher fair market value is appropriate for any appeal or protest of an appraisal resulting from an assessable transfer of interest due to a conveyance by deed (Sec. 7). -Requires a real estate agent to notify the purchaser of the property if the property tax would rise due to this act (Sec. 8).

Full Bill Text