MONTGOMERY — On Wednesday, Senate General Fund Budget Committee members approved legislation capping the increase in property values on annual reappraisals at 7%.
House Bill 73 by State Rep. Phillip Pettus (R-Killen) and State Sen. David Sessions (R-Grand Bay) would cap yearly property tax increases after a reappraisal.
The legislation sunsets after three years, meaning the legislature will have to re-approve the bill after those three years.
"In three years we'll have to come back and look at it and see if there's problems with it, if it needs adjusting or whatever. We also have a study commission through the Department of Revenue. They'll study it and report back to legislators if they see any problem with it," Pettus told 1819 News on Wednesday. "Small businesses are behind it. They do their budgets, well then at the end of the year, their taxes went way up. You can't budget for that. Now, they know it's capped at 7% and they know how much it will be."
Exceptions to the 7% cap include:
real property that has never been assessed
additions or improvements to real property, including new construction, not including repairs to or ordinary maintenance of an existing structure or the grounds of the property
changes to the classification of the property
changes in ownership of the property, except for transfers between spouse or family members for no or nominal consideration, including upon death of the owner and transfers due to redemption after foreclosure of a mortgage, tax sale, or tax lien
property located in a tax increment district
If passed into law, it would take effect on October 1. The bill was approved by the House last week and now goes to the full Senate for consideration.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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