Amends TCA Title 67, Chapter 5.

This bill authorizes a county to create a program by which an owner of real property in the county may apply for a classification of the property as zoning-exempt property. If a county creates such a program, then the owner of the real property must file an application with the assessor of property. The state board of equalization must provide a form to be used for such an application. Upon receiving an application, this bill requires the assessor of property to determine whether the real property is a zoning-exempt property. In determining whether real property is zoning-exempt property, the assessor of property must consider (i) the zoning classification that existed for the property when the owner came into possession of the property, (ii) if any changes have been made to the zoning classification since the owner came into possession of the property, (iii) whether the change in zoning classification has a tendency to increase the value of the property, and (iv) whether the owner of the property has made any improvements to the property after the change in zoning classification. This bill provides that a person aggrieved by the denial of an application has the same rights and remedies for appeal and relief as are provided in the general statutes for taxpayers claiming to be aggrieved by the actions of assessors of property or boards of equalization. ASSESSMENT This bill provides that if a parcel of real property has been classified as zoning-exempt property, then the property is assessed based on the zoning classification that existed at the time the owner came into possession of the property and its current use. If the use or the ownership of the parcel of real property that has been classified as zoning-exempt property changes such that it no longer qualifies, then the assessor must reclassify the property and value the property according to its current market value for subsequent tax years. It is the responsibility of the property owner to promptly notify the assessor of property of any change in use or ownership. For each tax year, this bill requires the assessor of property to compute the taxes each year based upon both the present value and the zoning-exempt property value. If the use or the ownership of the parcel of real property that has been classified as zoning-exempt property changes such that it no longer qualifies, then the assessor must compute the amount of taxes saved based on the difference between the taxes in the prior provision. This difference is the amount of rollback taxes, as applicable. If the real property is no longer classified as zoning-exempt property, then the property owner, or the purchaser of the property pursuant to a written contract is liable for three years of rollback taxes. GENERAL POLICY Present law provides the following: (1) The general assembly finds that the increased market value of certain residential property zoned for commercial use has caused an increase in taxes to the extent that citizens are faced with the necessity of selling dwelling houses in which they have lived for many years. As used in present law, a "dwelling house" means a residence occupied by the owner of an estate in that property, with such residence being zoned for commercial use, used solely for residential purposes, and occupied by that owner or a person to whom the current owner is a lineal descendant for a period of 25 years or more, together with the real estate upon which it is situated up to a maximum five acres. The general assembly finds that present use valuation has been extended to others, and is warranted under certain circumstances to relieve the burden of increased taxation to residential owners; (2) It is the policy of this state that the owners of residential property who have lived on that property for a significant period of time should be allowed to continue to live on that property without a disproportionate increase in taxes due to the property being zoned for commercial use; (3) Any owner of a dwelling house may make application to the assessor of property of the county in which the property is located for its classification under (1)-(6). Property that has been determined by the assessor of property to qualify must be valued for ad valorem tax purposes at its market value for residential purposes. The assessment on such property must include the entire year in which the land is so classified. Any person who is denied such classification has the same rights and remedies for appeal and relief as are provided taxpayers for any action of assessors of property; (4) Should the use or ownership of the property change so that it no longer qualifies, then the property owner has the duty of informing the assessor of property. Upon discovering that a property no longer qualifies for such classification, the assessor of property must reclassify the property and value the property according to its current market value for subsequent tax years. In the event such change in use or ownership does not timely come to the attention of the assessor of property, and upon the assessor discovering that the property no longer qualifies, such reclassification must affect each year that the property has failed to qualify, and the taxpayer is liable for the difference in taxes; (5) It is the legislative intent that the 25-year time period is an integral part of this law. If such provision is held by a court of competent jurisdiction to be an unreasonable classification or otherwise declared unconstitutional, then (1)-(6) are null and void; and (6) The unmarried spouse of a deceased owner, occupying the dwelling house as a surviving joint tenant or tenant by the entireties, may continue to reside in the dwelling house without disqualifying the property from the benefits of (1)-(6). The term of occupancy by that spouse must not be deemed to interrupt the 25-year time period required for continued eligibility of the property for such benefits. This bill deletes the provisions above. ASSESSMENT GUIDED BY MANUALS Present law provides that, except as provided in (1)-(6) above, in determining the value of all property of every kind, the assessor must be guided by, and follow the instructions of, the appropriate assessment manuals issued by the division of property assessments and approved by the state board of equalization. This bill removes the exception for (1)-(6) above from this provision.