HB458 Alabama 2014 Session

This bill would provide further for appraisals of the fair and reasonable market value of rented or leased Class II real property constituting affordable rental housing

This bill would provide that appraisals for Class II property restricted either by law or by a restrictive covenant that runs with the land would be required to take into account the net operating income attributable to the property based on the restrictions, utilizing capitalization rates annually determined by the Department of Revenue

This bill would provide that, for ad valorem tax appraisal purposes, the impact on fair and reasonable market value of Class II property of legal restrictions and binding covenants of record on occupancy and rentals with respect thereto shall be considered by tax assessors, boards of equalization, and others charged with appraisal of property for ad valorem tax purposes, and that the value of any tax credit becoming available as a result of the restrictions would not be considered in the appraisal except in certain circumstances

This bill would clarify the ad valorem tax status of the tax credits

This bill would require the Department of Revenue to promulgate rules for its implementation

Relating to the ascertainment of the fair and reasonable market value for ad valorem tax purposes of certain Class II property; to provide that appraisals of the fair and reasonable market value for ad valorem tax purposes of rented or leased Class II real property the occupancy or rentals for which are restricted by law or restrictive covenant running with the land by reason of the use of such property in providing affordable rental housing in the State of Alabama shall be ascertained, as of October 1 of each year, commencing with the ad valorem tax year commencing October 1, 2014, taking into account the actual net operating income attributable to the property for the then immediately preceding year, capitalized at market value capitalization rates for such year to be determined annually by the Department of Revenue pursuant to certain criteria set forth in and consistent the purposes of this act; to provide that every county tax assessor or other county or state officer charged with the duty of assessing property for ad valorem tax purposes, as well as each county board of equalization and each agent of the Department of Revenue, in forming judgments as to the proper appraisal of the fair and reasonable market value of such Class II real property, would be required to consider the impact on the value of all applicable legal restrictions and restrictive covenants of record on the occupancy and rentals thereof, and would be prohibited from considering the value of federal or state income tax credits utilized in connection with such restrictions by any person or persons other than the person or persons in whom title shall vest and required to make return of the property for ad valorem tax purposes, nor the replacement cost approach to the appraisal of such Class II property except in cases where the value produced by such an approach is less than the value produced by the income approach for the property and deemed reflective of the fair and reasonable market value thereof; to require the Department of Revenue annually to determine capitalization rates for use by county tax assessors or other county or state officers charged with the duty of assessing property for ad valorem tax purposes, as well as by county boards of equalization and agents of the Department of Revenue, in making appraisals of such Class II property taking into account the net operating income therefrom; and to promulgate rules consistent with this act and for its implementation, and to provide for the application of certain of the act's provisions to the final determination of appraisals of such Class II property as shall not, as of its effective date, become final and unappealable.