From the Executive Director – Week of March 18, 2024

House Ways & Means Committee Introduces New Assessment Burden of Proof Legislation

On Friday, March 15th, the House Ways & Means Committee introduced House Bill 717. House Bill 717 is a mashup of House Bill 701 and House Bill 625. House Bill 701 is sponsored by Representative Ned Burns and seeks to codify a uniform process for the proration of property taxes on new homestead exemptions. House Bill 701 cleared the House Revenue & Taxation Committee but has subsequently stalled out on House General Orders. House Bill 625 was sponsored by Representative Jeff Ehlers and sought to shift the burden of proof from the property owner and onto the county assessor during valuation appeals. House Bill 625 was held in committee after compelling testimony in opposition to the bill by county assessors. A subsequent RS along the lines of House Bill 625 also failed in committee and was returned to the sponsor.

House Bill 717 includes language from House Bill 701 (see Section 3 of the bill) which was negotiated over the last two sessions by county assessors, county treasurers, Realtors, and other stakeholders. This language would require the county to prorate the property taxes paid on new homestead exemptions uniformly throughout the state.

Where House Bill 717 becomes problematic for counties is in the incorporation of language regarding the burden of proof from House Bill 625. House Bill 717 upends the current appeals process, eliminating the burden of proof that currently is placed on the property owner and shifting it to the county assessor. House Bill 717 states that if a property owner provides evidence that an assessment is inaccurate, the assessment is presumed to be inaccurate; however, the bill fails to define what evidence is sufficient to yield the assessment of the county assessor inaccurate. Without a clear definition of the information required to disprove an assessment, county assessors and county boards of equalization will be left with very little information to respond to in providing “clear and convincing evidence” as required by the proposed legislation.

Additionally, House Bill 717 goes beyond altering who has the burden of proof in appeals of property assessments as the bill restricts the information that a county assessor may use when determining an accurate assessed value. House Bill 717 ties the hands of county assessors, prohibiting them from using statistical information commonly used in determining market value by preventing the county assessor from using “other analyses of property values generally that do not directly and specifically evaluate the subject property.” County assessors rely on market statistics from the MLS, self-reported sales data, and other market information, including market rents as required by House Bill 230 (enacted in 2023) to arrive at fair and equitable assessments. If county assessors are unable to use market data to refute the evidence of an appellant, the task of overriding an appeal is next to impossible.

House Bill 717 will be heard in the House Revenue & Taxation Committee tomorrow morning (March 19th) and is likely to be fast tracked through the House. Because it is likely to move quickly, county officials are encouraged to reach out to their House and Senate members and encourage them to vote NO on House Bill 717.