HB 7109

1	A bill to be entitled
2	An act relating to taxation; amending s. 193.155, F.S.;
3	revising exceptions applicable to damaged or destroyed
4	homestead property to a requirement that changes,
5	additions, or improvements to homestead property be
6	assessed at just value under certain circumstances;
7	providing for application to certain changes, additions,
8	and improvements; providing for assessment of homestead
9	property after substantial completion of changes,
10	additions, and improvements; providing criteria; amending
11	s. 196.031, F.S.; providing for the continued granting of
12	a homestead exemption for certain damaged or destroyed
13	homestead property under certain circumstances; specifying
14	circumstances for abandonment of property as homestead;
15	requiring the Department of Revenue to study the state's
16	property tax structure; providing the contents of the
17	study; requiring the Office of Economic and Demographic
18	Research to prepare a report; requiring that the report
19	recommend changes to achieve specified principles of
20	taxation; providing deadlines; requiring a report to the
21	Governor and the Legislature; repealing s. 12, ch. 2005-
22	187, Laws of Florida, relating to dissolving the
23	Communications Services Tax Task Force; providing
24	appropriations; providing for reversion of unused funds to
25	the General Revenue Fund; providing for retroactive
26	application; providing effective dates.
27
28	Be It Enacted by the Legislature of the State of Florida:
29
30	Section 1.  Subsection (4) of section 193.155, Florida
31	Statutes, is amended to read:
32	193.155  Homestead assessments.--Homestead property shall
33	be assessed at just value as of January 1, 1994. Property
34	receiving the homestead exemption after January 1, 1994, shall
35	be assessed at just value as of January 1 of the year in which
36	the property receives the exemption.
37	(4)(a)  Except as provided in paragraph (b), changes,
38	additions, or improvements to homestead property shall be
39	assessed at just value as of the first January 1 after the
40	changes, additions, or improvements are substantially completed.
41	(b)  Changes, additions, or improvements that replace all
42	or do not include replacement of a portion of homestead real
43	property damaged or destroyed by misfortune or calamity shall
44	not increase the homestead property's assessed value when the
45	square footage of the homestead property as changed or improved
46	does not exceed 110 percent of the square footage of the
47	homestead property before the damage or destruction just value
48	of the damaged or destroyed portion as replaced is not more than
49	125 percent of the just value of the damaged or destroyed
50	portion. Additionally, the homestead property's assessed value
51	shall not increase if the total square footage of the homestead
52	property as changed or improved does not exceed 1,500 square
53	feet. Changes, additions, or improvements that do not cause the
54	total to exceed 110 percent of the total square footage of the
55	homestead property before the damage or destruction or that do
56	not cause the total to exceed 1,500 total square feet shall be
57	reassessed as provided under subsection (1). The homestead
58	property's assessed value shall be increased by the just value
59	of that portion of the changed or improved homestead property
60	any replaced real property, or portion thereof, which is in
61	excess of 110 125 percent of the square footage of the homestead
62	property before the damage or destruction or of that portion
63	exceeding 1,500 square feet just value of the damaged or
64	destroyed property shall be deemed to be a change, addition, or
65	improvement. Homestead Replaced real property damaged or
66	destroyed by misfortune or calamity which, after being changed
67	or improved, has a square footage with a just value of less than
68	100 percent of the homestead original property's total square
69	footage before the damage or destruction just value shall be
70	assessed pursuant to subsection (5). This paragraph applies to
71	changes, additions, or improvements commenced within 3 years
72	after the January 1 following the damage or destruction of the
73	homestead.
74	(c)  Changes, additions, or improvements that replace all
75	or a portion of real property that was damaged or destroyed by
76	misfortune or calamity shall be assessed upon substantial
77	completion as if such damage or destruction had not occurred and
78	in accordance with paragraph (b) if the owner of such property:
79	1.  Was permanently residing on such property when the
80	damage or destruction occurred;
81	2.  Was not entitled to receive homestead exemption on such
82	property as of January 1 of that year; and
83	3.  Applies for and receives homestead exemption on such
84	property the following year.
85	(d)(c)  Changes, additions, or improvements include
86	improvements made to common areas or other improvements made to
87	property other than to the homestead property by the owner or by
88	an owner association, which improvements directly benefit the
89	homestead property. Such changes, additions, or improvements
90	shall be assessed at just value, and the just value shall be
91	apportioned among the parcels benefiting from the improvement.
92	Section 2.  Subsection (7) is added to section 196.031,
93	Florida Statutes, to read:
94	196.031  Exemption of homesteads.--
95	(7)  When homestead property is damaged or destroyed by
96	misfortune or calamity and the property is uninhabitable on
97	January 1 after the damage or destruction occurs, the homestead
98	exemption may be granted if the property is otherwise qualified
99	and if the property owner notifies the property appraiser that
100	he or she intends to repair or rebuild the property and live in
101	the property as his or her primary residence after the property
102	is repaired or rebuilt and does not claim a homestead exemption
103	on any other property or otherwise violate this section. Failure
104	by the property owner to commence the repair or rebuilding of
105	the homestead property within 3 years after January 1 following
106	the property's damage or destruction constitutes abandonment of
107	the property as a homestead.
108	Section 3.  (1)  The Department of Revenue shall conduct a
109	study of the state's property tax structure to analyze the
110	impact of the current homestead exemptions and homestead
111	assessment limitations on different types of property.
112	(a)  The study shall include:
113	1.  An analysis of the effects of Save Our Homes provisions
114	of s. 4(c), Art. VII of the State Constitution on the
115	distribution of property taxes among and between homestead
116	properties as well as between homesteads and other types of
117	property;
118	2.  An analysis of the effect of the Save Our Homes
119	provisions of s. 4(c), Art. VII of the State Constitution on
120	affordable housing, as evidenced by the differential tax burden
121	on first-time homestead property owners and long-term homestead
122	property owners and the amendment's effect on property taxes
123	paid by nonhomestead residential property owners.
124	3.  The identification and analysis of the impact of the
125	differential under the Save Our Homes provisions of s. 4(c),
126	Art. VII of the State Constitution on each county;
127	4.  An analysis of the effects of the Save Our Homes
128	provisions of s. 4(c), Art. VII of the State Constitution on the
129	distribution of the school property taxes, including the
130	required local effort levy for the Florida Education Finance
131	Program, and other school levies;
132	5.  An analysis of the fiscal impacts of allowing the
133	assessments under the Save Our Homes provisions of s. 4(c), Art.
134	VII of the State Constitution to be transferred to newly
135	acquired homes, the resulting changes in the relative taxes
136	levied on all other classes of property, including other
137	homestead properties, nonhomestead properties and properties
138	purchased by first-time homestead owners, and in the
139	distribution of the required local effort for school funding;
140	and
141	6.  An analysis of the millage rates adopted by local
142	governments compared to the rolled back rate as advertised in
143	the Truth In Millage (TRIM) Notices required under s. 200.069,
144	Florida Statutes.
145	(b)  The Department of Revenue shall prepare a draft of the
146	study by November 15, 2006, and conclude the study by January 2,
147	2007.
148	(2)  The Office of Economic and Demographic Research shall
149	prepare a report summarizing the study conducted by the
150	Department of Revenue. The report must also contain findings and
151	policy options that may be available to the state. In preparing
152	the report, the Office of Economic and Demographic Research may
153	consider other available information.
154	(a)  In addition to findings and policy options, the report
155	must include:
156	1.  An evaluation of the assessment differentials under the
157	Save Our Homes provisions of s. 4(c), Art. VII of the State
158	Constitution on homeowners' willingness to purchase a new
159	homestead.
160	2.  An evaluation of the effects of the Save Our Homes
161	provisions of s. 4(c), Art. VII of the State Constitution on
162	local government budget decisions, including whether the Truth
163	In Millage (TRIM) notification process under s. 200.069, Florida
164	Statutes, adequately informs taxpayers of local governments' tax
165	and budget decisions.
166	3.  An evaluation of the effectiveness of the notice of
167	proposed property taxes and non-ad valorem assessments created
168	under s. 200.069, Florida Statutes. If the current notice is
169	deemed ineffective, the evaluation should propose alternative
170	methods of conveying the information contained in the notice.
171	(b)  The findings and policy options must apply and
172	consider the following principles of taxation described in the
173	2002 Florida State Tax Reform Task Force Final Report:
174	1.  Equity.--The Florida tax system should treat
175	individuals equitably. It should impose similar tax burdens on
176	people in similar circumstances and should minimize
177	regressivity.
178	2.  Compliance.--The Florida tax system should facilitate
179	taxpayer compliance. The system should be simple and easy to
180	understand so as to minimize compliance costs and increase the
181	visibility and awareness of the taxes being paid. Enforcement
182	and collection of tax revenues should be accomplished in a fair,
183	consistent, professional, predictable, and cost-effective
184	manner.
185	3.  Pro-competitiveness.--The Florida tax system should be
186	responsive to interstate and international competition in order
187	to encourage savings and investment in physical plants,
188	equipment, people, and technology in this state.
189	4.  Neutrality.--The Florida tax system should affect
190	competitors uniformly and not become a tool for social
191	engineering. The system should minimize government involvement
192	in investment decisions, making any such involvement explicit,
193	and should minimize pyramiding.
194	5.  Stability.--The Florida tax system should produce, in a
195	stable and reliable manner, revenues that are sufficient to fund
196	appropriate governmental functions and expenditures.
197	6.  Integration.--The Florida tax system should balance the
198	need for integration of federal, state, and local taxation.
199	(c)  The Office of Economic and Demographic Research shall
200	submit a progress report to the President of the Senate and the
201	Speaker of the House of Representatives by February 15, 2007.
202	The progress report may include preliminary findings and any
203	policy options that may be considered during the 2007 regular
204	legislative session.
205	(d)  The final report must be submitted to the Governor,
206	the President of the Senate, the Speaker of the House of
207	Representatives, and the chair of the Taxation and Budget Reform
208	Commission no later than September 1, 2007.
209	(e)  The Office of Economic and Demographic Research may
210	contract with state universities or a nationally recognized
211	property appraisal education and certification organization for
212	the purpose of developing findings and policy options to be
213	included in the report.
214	Section 4.  Section 12 of chapter 2005-187, Laws of
215	Florida, is repealed.
216	Section 5.  The sum of $300,000 in nonrecurring general
217	revenue is hereby appropriated to the Department of Revenue for
218	the purpose of conducting the study required by this act.
219	Section 6.  The sum of $500,000 in nonrecurring general
220	revenue is hereby appropriated to the Office of Economic and
221	Demographic Research for the purpose of preparing the report
222	required by this act.
223	Section 7.  The unexpended balance of funds appropriated in
224	section 13 of chapter 2005-187, Laws of Florida, shall revert
225	immediately to the General Revenue Fund.
226	Section 8.  Sections 1 and 2 of this act shall apply
227	retroactively to homestead property replaced on or after January
228	1, 2006.
229	Section 9.  Except as otherwise expressly provided in this
230	act, this act shall take effect upon becoming a law.

CODING: Words stricken are deletions; words underlined are additions.