Bill > A1942

Introduced Session

This bill, the "Technology-Based Real Property Assessment Transition Act," would revise the process of real property assessment into a process that includes the use of modern technology in every municipality, statutory revisions to the assessment calendar, a mandatory district-wide annual reassessment requirement to set real property assessments at true value, the internal inspection of recent property sales as evidenced by the filing of the deed with the county and the charging of an inspection fee to cover the cost thereof to be paid at the time the deed is filed, and a mandatory 10-year cycle of internal inspections of all real property in every municipality in the State. The provisions of the "Technology-Based Real Property Assessment Transition Act" would establish a program to be followed by every assessor in the State in order to more equitably distribute the property tax levy among all property taxpayers, provide a more accurate assessment of each parcel of real property in the State, ensure transparency in the real property assessment process, and reduce local costs related to the assessment of real property. Currently, many municipalities do not perform regular revaluations, or in-house reassessments of real property, which leads to properties being over-valued or under-valued, and in turn, property owners either over-paying or under-paying property taxes. The intent of the "Technology-Based Real Property Assessment Transition Act" is to ensure that property owners pay property taxes based on the true value of their properties, not on old or incorrect values, and to provide transparency to the public about the real property assessment process. The real property assessment program proposed by the bill would require every county board of taxation to adopt an implementation schedule which reflects the actions required to be taken by each assessor in order to meet the requirements of the "Technology-Based Real Property Assessment Transition Act," over a ten-year period, including the transition to assessors performing annual reassessments of all real property in their respective jurisdictions. The implementation schedule shall be approved by the county board of taxation and submitted to the Director of the Division of Taxation. The county board of taxation is required to hold at least one public meeting to hear from the public and municipal officials regarding concerns associated with the proposed implementation schedule. The implementation schedule would be a public document that provides a 10-year plan outlining the tax years in which the municipal assessor is to revise assessments to the current director's ratio, or to 100 percent if the director's ratio exceeds 100 percent, the tax year in which all assessments are to be set to 100 percent of true value, and the annual requirement of reassessment each year thereafter. The municipality may petition the county board of taxation to modify the adopted schedule during the course of the 10-year plan, but all municipalities are required to set assessments equal to true value no later than the 10th year of implementation. Not later than April 1 next following the enactment of the bill, the county tax administrator of every county board of taxation is required to certify to the Director of the Division of Taxation in the Department of Treasury that the county board of taxation is either a State-certified vendor of MOD-IV technology, including computer assisted mass appraisal (CAMA) software, or that the county has contracted with a single State-certified MOD-IV vendor to provide MOD-IV technology, including CAMA software, to all of the municipalities in the county. The county tax administrator shall file with the director a copy of its MOD-IV/CAMA certification, or a copy of a valid contract with a State-certified MOD-IV vendor for MOD-IV/CAMA services. Each county tax board shall pay all of the costs associated with the conversion to the county-based MOD-IV/CAMA system and the associated expansion of the technology infrastructure required to support the centralized system. Each county tax board shall annually provide technical training and financial support for the advancement of the local assessment function through education and technology expansion. Under the bill, no direct appropriation of State funds would be used to effectuate the provisions of the "Technology-Based Real Property Assessment Transition Act." The technical costs of the law are to be paid by each county board of taxation using assessment appeal filing fees collected by the county board taxation pursuant to section 18 of P.L.1979, c.499 (C.54:3-21.3a). Each county board of taxation is required to provide MOD-IV technology and CAMA software to each municipality that does not use the software, at no cost to those municipalities, and shall provide, at no cost to those municipalities, training in the use of the technology and the software to the assessors of those municipalities and to their respective staff members. Thereafter, each municipality shall pay an annual fee per each taxable line item in the municipality to the county board of taxation to cover the cost of the county providing the MOD-IV and CAMA service to the municipality. The amount of the annual fee shall be set by the county board of taxation. Annual MOD-IV/CAMA service fees paid by municipalities shall be used exclusively by county boards of taxation to defray costs associated with the administration and advancement of the "Technology-Based Real Property Assessment Transition Act" and its associated services and technologies. On October 1 next following the enactment of the bill, every county shall operate under the countywide implementation schedule developed by the county tax administrator or county assessor, utilizing the same property assessment software as is used by the county tax board, and provided to the municipalities by the county tax board pursuant to the bill. Every real property assessment function required to be performed by an assessor by law, or by rule or regulation adopted pursuant to law, shall be performed using the MOD-IV technology and the CAMA software provided by the county board of taxation to the assessor. Under the bill, every county board of taxation shall publicly adopt a transition schedule for each municipality within the county. The transition schedule shall not exceed 10 years. Beginning in the first year of the transition and every year thereafter, every assessor shall attempt to internally inspect no less than 10 percent of the districts line items so that the inspection of 100 percent of all line items are attempted every 10 years. The municipality may accelerate the initial internal inspection rate, including performing 100 percent of the inspections in the first year. Also, beginning in the first year of transition and in every year thereafter, the assessor shall internally inspect every new property sale that is believed to reflect current market value, the cost of which shall be covered by the municipality's share of an increased fee for the recording of a deed for the conveyance or transfer of real property. Beginning in the first year of transition up until the submission of the first preliminary tax list which reflects assessments set equal to 100 percent of true value, the assessor shall annually review and revise each assessment to the current director's ratio. Every year following the implementation of 100 percent of true value, the assessor shall review and revise every assessment to 100 percent of current true value. The bill would also revise various statutes in order to require assessors and county boards of taxation to utilize technology in assessment-related processes and effectuate the provisions of the bill. The bill would also require every municipality and county in the State to operate, on a permanent basis, under the alternative real property assessment dates established for municipalities participating in the "Real Property Assessment Demonstration Program," P.L.2013, c.15 (C.54:1-101 et al.). The alternative real property assessment calendar implemented as part of the "Real Property Assessment Demonstration Program" is designed to specifically address the systemic costs which result from losses due to successful assessment appeals by property owners, which reduce the property tax base, and which require municipalities to refund large amounts of property taxes previously collected from those property owners. Under current law, every assessor files the tax list with the county board of taxation, which subsequently sets the local tax rates. Assessment appeals are filed by property owners on April 1 of each year, or on May 1 in the case of a municipality that has undergone a municipal-wide revaluation or reassessment of real property. Appeals are heard by the county tax board and generally decided by the end of July. Successful appeals that late in the tax year result in reduced assessments, which reduces the municipal tax base. Because the county tax board has already apportioned the tax levy, a decrease in the tax base will result in the under-collection of property taxes to fund current year operations. The real property assessment calendar enacted as part of the "Real Property Assessment Demonstration Program" re-schedules the property assessment appeal process to dates prior to the calculation of the local property tax rate, which allows for a more accurate local property tax rate to reflect local budgetary needs and the true value of the tax base that provides the property tax revenue to fund the local budget. The chart below sets forth the current statutory dates relative to the individual functions that comprise the real property assessment process, and the dates for those functions under the "Real Property Assessment Demonstration Program." DATES RELATIVE TO CERTIFICATION OF THE TAX LIST, ASSESSMENT APPEALS, AND THE CALCULATION OF LOCAL TAX RATES IN MUNICIPALITIES THAT ADOPT THE REAL PROPERTY ASSESSMENT CALENDAR UNDER THE "REAL PROPERTY ASSESSMENT DEMONSTRATION PROGRAM" Description of Function Current Date Proposed Date Assessing Date October 1 of pre-tax year October 1 of pre-tax year Certification of Preliminary Assessment N/A November 1 of pre-tax year Notification of Assessment Postcards February 1 November 15 of pre-tax year Assessment Appeal Filing Deadline April 1; May 1 in municipalities wherein revaluation of real property has occurred January 15 Assessment Appeals Heard May, June and July February, March and April Tax List Filed January 10 May 5 County Preliminary Equalization March 10 May 15 County Final Equalization March 10 May 25 Municipal Budget to Tax Board March 31 May 15 County Budget to Tax Board April 1 May 15 School Budget to Tax Board May 19 May 15 Certified Tax Rates May 20 May 31 Tax Duplicates June 3 June 3 Tax Bills June 14 June 14

AI Summary

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Serena DiMaso (R)*, 

Introduced, Referred to Assembly State and Local Government Committee (on 01/14/2020)

Official Document