Alabama Legislature passes bill to cap property tax increases

On Wednesday, the Alabama Legislature passed legislation to cap ad valorem tax increases on homes at seven percent per year.

House Bill 73 is sponsored by State Representative Phillip Pettus (R-Killeen). It was carried in the Senate by Senator David Sessions (R-Grand Bay).

"This is a cap this is not a tax cut," said Sen. Sessions. "Recently in the last few years inflation has been hitting real hard. Housing has been at a deficit and property taxes have been increasing substantially and this just puts a stability cap of 7 percent per year as the most that it can go up."

"I have an amendment," said Sessions. "This amendment takes care both of the issues that were floating for this piece of legislation."

"It takes the sunset from 3 years to 5 years," Sessions explained. "Most of the incentives expire in three years. I am not trying to hurt anyone's county. All I want is a stable environment for class 1 and class 2 property."

"The Revenue Department has to have an annual report on what the effect of this is by county," added Sessions.

"I am bound to listen to my county commissioners and my probate judges,"

"When we start talking about taxes and percentages everybody likes to talk percentages, but not what the actual number is."

"Our property taxes is the lowest in the nation and even if you doubled it right now, it would still be the lowest in the nation," said Senate Minority Leader Bobby Singleton. "So I don't see why people are crying about taxes."

"All the rich folks don't want to pay taxes and somebody who owns a million dollar home is gonna cry about their taxes or owns a thousand acres is going to cry if their taxes go up a percentage," said Singleton. "It is the rich people who want to control everything in this state; but don't want to pay taxes."

"Senator, this is not for the rich," said Sessions. "This is for everybody.:

"Most of us are living the American nightmare, not the American dream," Singleton said. "Most of my folks don't even own the place they stay at."

"I was going to vote for this bill if the sunset is three years," said Singleton. "I can't support it if is five years."

"If you will put the sunset back on it for three years, I will go with it," said Singleton.

Sessions agreed to withdraw the amendment to decrease the sunset if Singleton would withdraw his opposition.

"I am ok with a sunset," said Sessions. "Three years to me is reasonable. There were groups that wanted five. Now there was an advisory commission on here that was really redundant. I would like to take that off the bill. That is a totally agreed to amendment by everyone. If I withdraw that amendment and ask to take the amendment so it still has a three-year sunset."

"I am good with that," said Singleton.

"I really hate to see you pull that five-year sunset," said Sen. Keith Kelley (R-Anniston). "A lot of people rent property. They rent it as an investment. So as property taxes continue to go up, that is passed on in the rent. There is no other way around it."

Kelley owns and manages a real estate company.

"I have seen a property myself in the company that we manage, increase 108% this year," said Sen. Kelley. "Three at 28%, so you do that in two or three years. The tax assessment is supposed to go along to have a true value of the property. This is not what is going on. I hate to see. I would have preferred the five percent, not the seven percent, but I kind of backed away on that."

"A lot of counties are going be hit with that four year adjustment," warned Sessions. "It is going to be 30 – 40 percent, 50 percent," said Sessions. "I want to get this done this year. Something is better than nothing."

"I applaud what you are trying to do," said Kelley. "What has gotten missed in all of this is that the assessment is supposed to get it in the proximity of a true market value and tax on that true market value."

The amendment to extend the sunset to five years was withdrawn and the amendment to remove the commission was adopted.

HB73 passed the Senate as amended 30 to 3.

It then went back to the House which concurred with the minor Senate changes. The legislation has now gone to the Governor for her consideration.

Thursday will the 30th and final day of the 2024 regular legislative session.

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