Sources of Revenue:

General Fund,Other Fund Local Government Funds

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The stated purpose of this bill is to amend provisions relating to challenges to increases in valuation and assessment of property for ad valorem property taxation. The bill allows a real property owner to submit an independent appraisal of the property to the assessor. It provides for notice to an owner of an increase in the assessed value that is greater than sixty percent of the value determined by an independent appraisal. The bill also provides that the assessor bear the burden of proof to show that the value of the independent appraisal is incorrect before the board of equalization and review and that the board assess the property based on the independent appraisal if found correct. The bill also establishes burden and degree of proof necessary to challenge an assessment or appraisal of property for ad valorem property taxation to be proof by a preponderance of the evidence. The State Tax Department is unable to estimate the potential revenue impact of this bill as the number of Taxpayers likely to file independent appraisals is unknown. However, both the provision shifting the burden of proof from the Taxpayer to the Assessor and the provision lowering the burden of proof from “clear and convincing evidence” to only a “preponderance of the evidence” would likely result in reduced local Property Tax revenue. Additional administrative costs to the State Tax Department and to local governments would likely be significant.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2014 Increase/Decrease (use"-")	2015 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	0	0
Personal Services	0	0	0
Current Expenses	0	0	0
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	0	0
2. Estimated Total Revenues	0	0	0

Explanation of above estimates (including long-range effect):

The stated purpose of this bill is to amend provisions relating to challenges to increases in valuation and assessment of property for ad valorem property taxation. The bill allows a real property owner to submit an independent appraisal of the property to the assessor. It provides for notice to an owner of an increase in the assessed value that is greater than sixty percent of the value determined by an independent appraisal. The bill also provides that the assessor bear the burden of proof to show that the value of the independent appraisal is incorrect before the board of equalization and review and that the board assess the property based on the independent appraisal if found correct. The bill also establishes burden and degree of proof necessary to challenge an assessment or appraisal of property for ad valorem property taxation to be proof by a preponderance of the evidence. The State Tax Department is unable to estimate the potential revenue impact of this bill as the number of Taxpayers likely to file independent appraisals is unknown. However, both the provision shifting the burden of proof from the Taxpayer to the Assessor and the provision lowering the burden of proof from “clear and convincing evidence” to only a “preponderance of the evidence” would likely result in reduced local Property Tax revenue.. Additional administrative costs to the State Tax Department and to local governments would likely be significant.

Memorandum

The stated purpose of this bill is to amend provisions relating to challenges to increases in valuation and assessment of property for ad valorem property taxation. The bill allows a real property owner to submit an independent appraisal of the property to the assessor. It provides for notice to an owner of an increase in the assessed value that is greater than sixty percent of the value determined by an independent appraisal. The bill also provides that the assessor bear the burden of proof to show that the value of the independent appraisal is incorrect before the board of equalization and review and that the board assess the property based on the independent appraisal if found correct. The bill also establishes burden and degree of proof necessary to challenge an assessment or appraisal of property for ad valorem property taxation to be proof by a preponderance of the evidence. As written, the bill provides that a property owner may have an “independent appraisal’ made of his (or her) real estate “in lieu of a visit by a member of the assessor’s staff.” The independent appraisal could possibly be used to impede an assessor in the performance of his or her statutory duties by preventing a proper inspection of property by the assessor’s staff. The proviso added to W. Va. Code §11-3-24 states, in part: “That in cases where the increase in assessed value of the property is greater than sixty percent of the fair market value of the property as determined by an independent appraisal provided to the assessor pursuant to section nine, article one-c of this chapter, the assessor bears the burden of proof, by a preponderance of the evidence, to demonstrate that the independent appraisal is incorrect ...” As written, the “increase in the assessed value” is compared to sixty percent of the fair market value, when the comparison probably should be comparing the assessed value of the property to sixty percent of the fair market value.

Person submitting Fiscal Note: Mark B. Muchow
Email Address: Roger.D.Cox@wv.gov