This bill pertains to the ad valorem taxation of real property in Alabama and seeks to limit the increase in assessed value of certain properties for tax purposes, with specific exceptions. The bill stipulates that after each county-wide reappraisal, tax assessors must compare the new assessed value of real property to the previous year's value. If there is an increase, the assessed value is adjusted according to the bill's provisions. Specifically, the bill limits the increase in assessed value for Class III and Class II properties to no more than seven percent from the previous year's assessed value.

However, the bill outlines exceptions where these limitations do not apply. These exceptions include real property that has never been assessed, additions or improvements to real property (excluding repairs or ordinary maintenance), changes to the property's classification, changes in ownership (with certain transfers between family members or due to foreclosure/redemption exceptions), and property located in a tax increment district. The limitations are set to take effect on October 1, 2024, and will continue through the fiscal year beginning October 1, 2027. Additionally, the Alabama Department of Revenue is tasked with analyzing the impact of the cap on assessed values and, along with the Alabama Ad Valorem Advisory Committee, must submit findings and recommendations by December 31, 2026. The act will become effective on October 1, 2024.

Statutes affected:
Engrossed: 40-8-1