Senate Bill No. 1445 authorizes municipalities to adopt ordinances that exempt motor vehicles from property taxation, allowing them to phase in this exemption over a period of up to five years. To offset the revenue loss from this exemption, municipalities can increase the assessment ratio for all other property types, including real property and non-vehicle personal property. The bill requires municipalities to 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, OPM is mandated to report annually to the legislature on municipalities that have adopted these ordinances, starting January 1, 2027.

The bill also makes conforming changes to existing law, specifically repealing subsections (a) and (b) of section 12-62a, which previously mandated a uniform assessment rate of 70% for all property types. The new language specifies that this uniform rate does not apply to municipalities that adopt the motor vehicle exemption ordinance. The bill is set to take effect on October 1, 2025, and it is expected to have a fiscal impact on municipalities that choose to implement the exemption, potentially leading to a decrease in their grand lists and requiring adjustments in assessment ratios for other property types.