2007 House Bill 4375 (Revise commercial rental property assessment occupancy formula )

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• Introduced by Rep. Paul Condino on March 1, 2007, to eliminate a cap on the maximum amount that tax assessors can raise the assessment of rental property due to a higher occupancy rate, if the assessment had been previously lowered as a result of a lower occupancy rate. A 2002 Supreme Court ruling (WPW vs. Troy) held that raising these assessments faster than inflation violates the Constitutional tax cap put in place by Proposal A in 1994, which limits assessment increases to five percent or the rate of inflation, whichever is less. This bill exempts commercial rental property from the regular property tax law, and instead subject it to a new property tax law which taxes this property at the same rate as the current law. Note: The effect of the bills in some sense would be retroactive, requiring property owners to pay higher taxes in the future to compensate governments for past tax savings under the WPW ruling.
  • Referred to the House Tax Policy Committee on March 1, 2007.
    • Reported in the House on March 28, 2007, without amendment and with the recommendation that the bill pass.
  • Substitute offered by Rep. Paul Condino on April 17, 2007, to replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described. The substitute passed in the House by voice vote on April 17, 2007.
  • Substitute offered by Rep. Fulton Sheen on April 17, 2007, to replace the previous version of the bill with one that eliminate the retroactive nature of the bill, which would require property owners to pay higher taxes in the future to compensate governments for past tax savings under the WPW ruling. The substitute failed in the House (51 to 57) on April 17, 2007. [Vote Details and Comments]
• Passed in the House (59 to 49) on April 17, 2007. [Vote Details and Comments]
• Received in the Senate on April 19, 2007.
  • Referred to the Senate Finance Committee on April 19, 2007.

Comments

Introduced by Rep. Paul Condino on March 1, 2007. Passed in the House (59 to 49) on April 17, 2007. New Comment