AMENDMENT HELPS SAVE CURRENT USE FOR ALABAMA FARMERS
MONTGOMERY, Ala. -- An amendment to Gov. Bob Riley's proposed property tax increase that was adopted by the House Education Finance and Appropriations Committee could soften the blow for farmers if it is approved by voters later this year. HB 3 was set to be considered by the full House on Friday. However, at press time the vote had not taken place.
Sponsored by Rep. Mike Hubbard, R-Auburn, HB 3 would raise more than $400 million a year by changing Alabama's property tax laws. The bill passed the House Education Finance and Appropriations Committee Thursday afternoon with four amendments, including the one proposed by Rep. Lindsey.
"We are pleased that, under the leadership of Rep. Richard Lindsey, D-Centre, the House Education Finance and Appropriations Committee amended HB 3 to restore the current use law in its original form," said Alabama Farmers Federation Executive Director Mike Kilgore. "This formula has been tested in court and has proven to be effective in placing a fair value on land based on its productivity and profitability."
The committee rejected a substitute offered by Rep. Joe Carothers, D-Dothan, which would have restored classification to farm, home and timberland to its current 10 percent ratio of assessment.
In addition, Carothers' substitute would have increased the current state millage of 6.5 mills to a total of 18.5 mills (a 12-mill increase statewide). This substitute would have produced revenue levels sought by the governor's proposed ad valorem changes.
Rep. Jeremy Oden, R-Vinemont, successfully offered an amendment approved by the committee that would give farmers a tax exemption up to $150,000 annually of the assessed value for improvements on farm buildings and facilities.
Rep. Oden also offered an amendment that was passed by the committee which would allow farm corporations (such as Limited Liability Entities and Limited Liability Partnerships) along with individuals to utilize the 200 non-contiguous acreage exemption.
Rep. Robert Bentley, R-Tuscaloosa, sponsored an amendment that was passed by the committee which would allow a farmstead exemption for up to 200 non-contiguous acres.
"This in no way means that farmers will not take a direct hit from the ad valorem package that passed committee," Kilgore said. "Under the amended plan, state property taxes still would increase by more than 430 percent on cropland and by almost 400 percent on a $150,000 home. We remain concerned that the ad valorem portion of the governor's package places a disproportionate burden on homeowners and family farms."
This week, the Alabama Farmers Federation has responded in good faith to requests from legislators to engage in meaningful discussions with the Riley administration in an attempt to arrive at more equitable ad valorem tax changes.
Proposals made by the Federation would not have had such a disproportionate impact on homeowners and family farmers. The Federation suggested that the additional property tax revenues sought in the governor's plan could be raised without changing current use or classification. Those suggestions were rejected by the governor's representatives.
"We had no other choice but to pursue changes to the governor's property tax bill in the legislative process," Kilgore said. "The Alabama Farmers Federation understands that education and necessary state services must be adequately funded. But, we have a responsibility to our members and the citizens of Alabama to pursue fairer, more equitable property tax alternatives."