Proposed Property Tax Reform Bill Drafts Presented at House Select Committee Meeting
The House Select Committee on Property Tax Reduction and Reform met on Wednesday, March 18, to hear four proposed bills aimed at modifying various aspects of property tax law. The first bill proposes placing a constitutional amendment on the ballot during the November general election, directing the General Assembly to set levy limits on property taxes, though it is intentionally vague as to what form those limits would take. Committee members discussed the proposal at length. Some raised concerns that a levy limit would negatively impact local government budgets and impede their ability to deliver services, while others voiced support for the bill and offered various suggestions to the proposed legislation. Despite the conversation, no modifications were adopted.
The committee also reviewed a set of proposed bills affecting nonprofit hospital tax exemptions — the first on property taxes, the other on state and local sales tax refunds. These bills stem from legislative concerns that state rules supporting charitable health care have become outdated and are no longer tailored well enough to accomplish their original intent. Conversation largely revolved around what the bills’ financial implications would be forcounty and regional hospital systems.
The last bill implements robust eligibility requirements for entities seeking property tax exemptions for affordable housing developments, or that preserve existing below-market units that provide naturally occurring affordable housing. The bill stems from an accelerating trend of for-profit companies leveraging a 2013 court decision allowing them to give a very small minority ownership stake to a nonprofit organization, and then, as a result, claim large property tax deductions on profits. NCACC has been working to close this loophole, so that only entities actively engaged in providing affordable housing can benefit.
The committee session concluded with a presentation on impact fees and local governments’ authority to charge these fees for new development. No action was taken on the topic.
While no formal votes have been taken during the meeting, if these bills are successfully reported out of the committee, they will be eligible for introduction in the short session. Committee leadership announced they expect votes during the next meeting on Wednesday, April 15, at 10:00 a.m. Meeting agendas and presentations are available here.
The NCACC will continue to advocate for counties, educate legislators on the value of the services they provide, and the need for adequate funding to continue their work. For more information on property taxes, please visit the NCACC Property Tax Information & Resources page. If you have questions, please contact the NCACC Advocacy and Policy team at [email protected].