Valuation adjustment for destroyed property amended, advanced

A bill intended to provide tax relief to those whose property has been destroyed by a natural disaster was advanced to the final round of debate May 21 after lawmakers amended it to address constitutionality concerns.

Sponsored by Elkhorn Sen. Lou Ann Linehan, LB512 would make several technical changes to state tax law requested by the state Department of Revenue.

The bill was amended on general file to include a proposal by Sen. Steve Erdman of Bayard that would require a county assessor to report to the county board of equalization all real property that is destroyed by fire or other natural disaster between Jan. 1 and Oct. 1 of any year.

The county board then would adjust the value of the destroyed property based in part on the portion of the year during which the property was intact.

Erdman filed an amendment on select file, adopted 34-0, that he said is intended to address problems identified in an attorney general’s opinion on the bill’s constitutionality.

The amendment would define destroyed real property as real property that suffers significant property damage as a result of a calamity—a fire, earthquake, flood, tornado or other natural event—that occurs on or after Jan. 1, 2019, and before July 1 of the current assessment year.

It would define significant property damage as damage exceeding 20 percent of a property’s assessed value in the current tax year if the property is located in a disaster area and has been deemed uninhabitable.

Under the amendment, the owner of destroyed real property would file a report with the county assessor and county clerk before July 15 of the current assessment year.

The county board of equalization then would adjust the assessed value of the property to its assessed value on the date it suffered significant damage and the county assessor would correct the current year’s assessment roll. Any change in the assessed value of destroyed real property would be for the current assessment year only.

The amendment also would require the board of equalization to give notice of the destroyed real property’s assessed value to the record owner or agent at his or her last known address.

After voting to adopt Erdman’s amendment, senators advanced LB512 to final reading by voice vote.