Property tax-assessed value.

11LSO-0169.L3

                                                         

FISCAL NOTE

 

This bill contains an appropriation of $7,500,000 from the GENERAL FUND to the State Treasurer.  This appropriation is effective immediately.

 

This bill contains an appropriation of $15,000 from the GENERAL FUND to the Department of Revenue.  This appropriation is effective immediately.

 

DETAIL OF APPROPRIATION

Agency #:  004     Agency Name:  State Treasurer

Unit:  (new) Property Tax Exemption

 

EXPENDITURE BY SERIES AND YEAR       FY 2011         FY 2012         FY 2013

0600  Grant & Aid Payments                          $3,750,000      $3,750,000

 

Total Expenditure Per Year:                         $3,750,000      $3,750,000

 

Grand Total Expenditure:           $7,500,000

Total Appropriated to Agency:      $7,500,000

Total Appropriated by Fund

GENERAL FUND             :         $7,500,000

 

Description of appropriation:

 

Funds are only being appropriated to the Treasurer’s office to disburse as pass-through revenue to local governments for reimbursement of property tax exemption once notified by the Dept. of Revenue of the amount requested by the local governments.  Above simply assumes the appropriation is split evenly between the two years, however, this may not actually be how the counties request the funds.

 

Agency #:  011     Agency Name:  Department of Revenue

Program:  0301 Property Tax Division

 

EXPENDITURE BY SERIES AND YEAR       FY 2011         FY 2012         FY 2013

0900  Contractual Services Costs      $15,000                                  

 

Total Expenditure Per Year:           $15,000                                 

 

Grand Total Expenditure:              $15,000

Total Appropriated to Agency:         $15,000

Total Appropriated by Fund

GENERAL FUND             :            $15,000

 

Description of appropriation

 

The above expenditure represents the estimated cost of re-programming CAMA software by a third party contractor.

 

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This bill creates a property tax exemption for property assessed at 9.5% (residential, commercial, personal, and agricultural property), on any amount of property tax levied as a result of the assessed valuation exceeding the average of the assessed valuation for that same property for the current year and the immediately preceding two calendar years. This property tax exemption would apply to any property which has not been substantially improved since the most recent on-site inspection. In the event the assessed valuation for the two preceding calendar years is not available, then the exemption shall not apply.

 

The fiscal impact, in the form of decreased property tax revenues, is indeterminable. It is not possible to accurately determine the amount of the exemption for future years, as it is predicated on future market values of the properties assessed at 9.5%.

 

The purpose of the $7.5 million appropriation in the bill is to reimburse local governments for the decrease in property tax revenue for property taxes levied and assessed in calendar year 2012, except for the 12 mills levied and paid to the School Foundation Program.

 

The $7.5 million appropriation is based on an estimate prepared by the Department of Revenue of the impact of the exemption if the exemption had applied to property taxes imposed on improved and nonimproved residential parcels in the 2010 tax year, based on the average assessed values from tax years 2008, 2009 and 2010. When preparing the estimate, there was no feasible way to determine which parcels had substantial change during this period.

 

This bill shall apply to property taxes imposed on or after January 1, 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepared by:   Dean Temte, LSO  Phone: 777-7881

(information provided by Sharon Garland, Treasurer’s Office; 777-7475:

Marvin Applequist, Dept. of Revenue; 777-5235)

 

 

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