Senate Bill No. 1445 allows municipalities to adopt ordinances that exempt motor vehicles from property taxation, a significant change from current law. This exemption can be phased in over a period of up to five years, during which municipalities may increase the assessment ratio for other property types (real property and non-vehicle personal property) to offset the revenue loss from the motor vehicle exemption. The bill mandates that municipalities notify the Office of Policy and Management (OPM) within 30 days of adopting such an ordinance, detailing the assessment year for the exemption and the assessment rates for subsequent years. Additionally, the OPM is required to submit an annual report to the legislature starting January 1, 2027, summarizing the municipalities that have adopted the exemption and providing relevant details about the ordinances.

The bill also makes conforming changes to existing law, specifically repealing subsections (a) and (b) of section 12-62a, which established a uniform assessment rate of 70% for property taxation. The new language specifies that this uniform rate does not apply to municipalities that adopt the motor vehicle exemption ordinance. Overall, the bill aims to provide municipalities with greater flexibility in managing their property tax structures while ensuring that any revenue losses from motor vehicle exemptions can be compensated through adjustments to the assessment rates of other property types. The effective date for these changes is set for October 1, 2025.