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Senate | March 2, 2013 | Committee Room | Finance

Full MP3 Audio File

Lets have the Finance Committee come to order. First thing first, it says the Sargent in Arms who helps us run a very smooth and orderly meeting, Steve Wilson, Anderson Meadows and Justin Owens. Thank you folks for your help. We've got pages today. Dee Anthony, Senator Hunt. Dee? Am I missing... Thank you, appreciate you being here. I've got Sara Finney, Senator Tucker, very good. Jackson Yelvetin, is that correct? Yelvesin, I'm sorry. Probably should probably put my glasses on. Senator Pate, Jenna Johnson, Senator Rabin, Mattie Tarte, Senator Rabin, Spencer Hutchison, Senator McKissick, and Davis Colton, excuse me, thank you. Senator Woodrick. Thank you very much. We appreciate it. I hope you enjoy your stay here and find it very rewarding. I know Senator Rabin's Bill is first but we'll go ahead and we will take up Senate Bill 159, which is requires certain general reappraisals. Senator Tarte. SPEAKER CHANGES: Thank you Mr. Chair. Can everyone hear me okay? For those are missing out on and waiting for Season 4 of Downtown Abbey, two books that we are going to be working from today is Chris McLoughlin's The Fundamentals of Property Tax, which is fascinating reading, and I know Mr. David Baker from DOR here, appreciate you being here today David, is dealing with the Machinery Act. What we have is a Bill before you that is to address three objects. One is not to impede the current work from Pearson Appraisal that they're doing on a number of appeals of property tax valuation work in Mecklenburg County. The second action item is for Mecklenburg County to go through a process to update and validate the tax data base records for all the residents in Mecklenburg County, and then the third action item is to compel them to redo the 2011 property valuation. The basis for that is an independent review that was conducted by an outside appraisal firm that has determined we had major flaws in that reappraisal work, which has led to a number of invalid valuations. As a basis of this going forward, we really have three purposes to see achieved from this action in this Bill. One, is again, to see this reevaluation corrected, as I mentioned, to restore literally the trust and confidence in our county governments over this process, and the last thing really the bottom line, is to ensure that every property owner has a fair and accurate value determined for their properties. To give you a little background on this Bill, I think this is a classic example where going forward we finally break down the partisan lines. This has gotten support, and I reach out to my colleague Senator Joel Ford, who has been a prime, primary supporter of this Bill. I thank you for that support for all of our residents. On the House side there is a companion Bill that is being run by Representative Bill Brawley and Trish Cotham is the primary sponsors so we have both parties represented. For background, also note that the Mecklenburg County Board of Commissioners chaired by Pat Cauthen, who is a Democrat, and all nine members of that Board have come and asked in a resolution that we provide the vehicle so that they can redo this and refund as appropriate on inappropriately assessed properties. So, that is the basis of this Bill and I would entertain any questions at this point. SPEAKER CHANGES: I'm Senator Hise. Just looking at Section 1 of the Bill. SPEAKER CHANGES: Yes Sir. SPEAKER CHANGES: It puts out a lot of qualifications for the county that this applies to. SPEAKER CHANGES: Correct. SPEAKER CHANGES: Kind of summarize all that...does this apply to any county other than Mecklenburg? SPEAKER CHANGES: Well, it potentially has the ability to apply to all the counties in the state but when all four applied, at least to my knowledge right now, Mecklenburg is the only county impacted. SPEAKER CHANGES: Any additional questions? SPEAKER CHANGES: Senator Clodfelter.

I need to be able to answer this question when it's asked of me, what happens if on this reappraisal it's determined that values were too low on properties? [SPEAKER CHANGES] Well let me answer both sides of that, Senator. If properties were overvalued, then refunds will be due with interest, and if properties were undervalued and increase, they will be assessed additional taxes for those without interest. So you will owe back taxes if you are undervalued. [SPEAKER CHANGES] Sen. Clodfelter. [SPEAKER CHANGES] I have been asked the question which I need to ask it to be sure I know the right answer. There are taxpayers who contested their evaluations and got them substantially lowered under the process of review. If the new appraisal as of 2011 goes and raises that back up, there will not get the benefit of that process they went to to get it lowered? [SPEAKER CHANGES] Well what happens in this process is you will get an accurate and fair value for your property, and you will have the ability per statute to appeal that to determine or if you disagree with that valuation. But it would, to your prior question, it will undo potentially or change the value from what you had agreed to through any prior appeal process. [SPEAKER CHANGES] I think because of the fact that this decision, the database was flawed because it hasn't been updated in 17 years, and I hope everyone in this audience takes close attention to the fact that there were serious mistakes made, and it was flawed, and therefore it's almost like a brand new re-evaluation to make sure everybody's treated fairly. [SPEAKER CHANGES] May I? [SPEAKER CHANGES] Yes sir. Follow up. [SPEAKER CHANGES] I just think we need to be sure that folks know what's going to happen on that. I'm supporting your bill by the way, but I just wanted to know what kind of answers I need to give when we're asked, and I guess I'd be interested in- do we have any sort of body who said it's okay to retroactively collect additional taxes from people? ?I know you can give the refunds, but are we convinced that it's okay to go back and collect more tax for a year that's already in the past? [SPEAKER CHANGES] Sure. Senator, here's the conversation we had with a number of sources. I know Mr. Coen may be here, I thought I saw Jerry earlier, we talked with Jerry from legal counsel, we talked with folk from the school of government because our original intent was not to allow them to go back and do that. Whether we can do that later on, but we've been told you can't treat groups of citizens by different categories, therefore we're required to go through that step. [SPEAKER CHANGES] Dan, do you have anything you would like to add to that? [SPEAKER CHANGES] That pretty much covers it. We did have discussions, as Sen. Tarte mentioned, with the school of government specifically with Chris McLaughlin who wrote the book, and it s a very good book, a useful book. We talked with him, and we've had osme conversation with the dept. of revenue and I think there were conversations with Jerry Coen. [SPEAKER CHANGES] Okay. Sen. Blum. [SPEAKER CHANGES] Okay, you probably answered this already Sen. Tarte, but the county commissioner's association have any position at all on this? [SPEAKER CHANGES] You know, I really haven't heard from them one way or the other, and I think that part of that was predicated on the fact that Mecklinburg county board of commissioners. They're a full board on an aye/no vote, endorsed going through a process that would enable them to re-fund. [SPEAKER CHANGES] Any additional questions? I've got Sen. Walters. [SPEAKER CHANGES] Yes Mr. Chair. On the question of going back when the property's been appraised and it's been determined the value is too low, how many years can you go back in arrears and collect your taxes for? [SPEAKER CHANGES] Dan, would you can help us with that please? [SPEAKER CHANGES] Well you'd only be able to go back to 2011, the year of the reval. [SPEAKER CHANGES] Yeah, your question answered? [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Okay. Alright. Sen. McKissick, question. [SPEAKER CHANGES] Let me ask this: Under current law, I mean there's obviously the appeals process through the board of equalization, but is there anything that prevents a county from going in and doing the appraisals on a mass inventory within their boundaries? I mean they don't have to wait 8 years, I've heard of people going in after 4 years and reappraising it, is there some minimum window of time within which they cannot conduct the reappraisal. See I know in Virginia, they're doing it like every 18 months, every 2 years. Fairfax county and other places in Virginia, so what is it under our current law that would prohibit them going back and doing the math reappraisal that this bill apparently allows for? [SPEAKER CHANGES] This is a great question, because I've got a Yale law grad and a Duke law grad asking somebody who's never been to law school. I don't know the specifics, other than that you have

Perform the revalue within 8 year period. I don’t think you can necessarily go back retrospectively, which is the purpose and part of the reason for this particular piece of legislation to enable that to occur. [SPEAKER CHANGES] Wait a second, you got a question. Go ahead. [SPEAKER CHANGES] A county can do a reevaluation as often as they like. Every year, if they want. Practically speaking it would be difficult to do that because of the amount of data. Usually they require at least two years. In terms of retroactive changes that is specifically disallowed under current statute. If you look at your summary, the first footnote addresses that 1.5 287c, any change in appraisals and non general rebound year may take effect in the current tax year only, and not retroactively. GS105 296i, changes made informally by the assessor prior to the first meeting of the Board E&R may effect only current year appraisals. GS105 322, authorizes a board of E&R to make changes as permitted by G105 287, as needed to result in timely filed appeals of the current years appraisal in GS105 325 authorizes boards of county commissioners to make changes only to the current year appraisals. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] You have a follow up. [SPEAKER CHANGES] So it seems like right now if the county has authority to have retroactive application which is what this Bill will help accomplish. And the commissioners all support it and they want the authority to do it. [SPEAKER CHANGES] Think so. Daniel, anything you would add? [SPEAKER CHANGES] In terms of the authority, that’s true. I couldn’t speak to the county commissioners. [SPEAKER CHANGES] Appropriate time. I’ll move for a favorable report. if it hadn’t been moved for all ready. [SPEAKER CHANGES] Okay. Let’s go see if there’s any additional questions by the Committee. Alright, see none. Anyone in the audience would like to spend a minute or two in any comments. Alright, see none. I have a favorable report for Senate Bill 159 from Senator McKissick. Any questions? Comments? See none. All in favor of Senate Bill 159 favorable report, please say “Aye”. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed “Nay”. Ayes have it. [SPEAKER CHANGES] Mister Chair, one comment, if I may. [SPEAKER CHANGES] Comment. [SPEAKER CHANGES] I would like to thank all of you today for what you’ve done. Because you send a huge message to the residents of North Carolina that we are committed to doing the right thing by our citizens and being responsible for our actions. This is a big day for the state as well as Mecklenburg County. We have a number of residents from Cornelius and Mecklengburg county here today, that have invested a year and a half of their time ensuring this gets corrected. So I tip my hat and I thank you guys as colleagues. Appreciate it. [SPEAKER CHANGES] Thank you, Senator Tarte. Okay, Senator Rabin. We have Senate Bill 268. Sunset Beach Canal dredging maintenance fee. We should at least let him say “hello”. [SPEAKER CHANGES] Thank you, Mister Chairman. This is a local bill that adds to the list of four already so doing municipalities in our area and up the coast who charge a maintenance fee for dredging and maintaining their canals on the beach property. That’s it. [SPEAKER CHANGES] I do have a favorable report from a Senator Jenkins on Senate Bill 268. Any questions or comments? See none. All in favor Report for Senate Bill 268, please say “Aye”. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] All opposed “Nay”. Ayes have it. Tomorrow we will have, I believe it’s 263, Senator Brock and it will be for discussion. Thank you very much. Meeting’s adjourned.