Assembly Joint Resolution No. 19–Assemblymen Gustavson, Angle, Knecht, Beers, Christensen, Claborn, Geddes, Gibbons, Mabey, Mortenson, Sherer and Weber

 

May 13, 2003

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Referred to Committee on Constitutional Amendments

 

SUMMARY—Proposes amendment to Nevada Constitution to limit amount of property tax and provide for retention of taxable value on real property until transfer of ownership. (BDR C‑234)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                   Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

Assembly Joint RESOLUTION—Proposing to amend the Nevada Constitution to limit the total amount of tax ad valorem on real property and to permit the retention of taxable value on real property until the ownership of the property is transferred.

 

1-1  Resolved by the Assembly and Senate of the State of Nevada, Jointly, That a new section, designated Section 6, be

1-2  added to Article 10 of the Nevada Constitution to read as follows:

1-3  Sec. 6.  1.  The maximum amount of tax ad valorem

1-4  that may be levied on real property is 1 percent of the

1-5  taxable value of the property. This limit does not apply to

1-6  taxes ad valorem levied to pay the interest and principal of

1-7  any indebtedness incurred before this section became

1-8  effective or approved thereafter by two-thirds of the votes

1-9  cast by voters voting on the question in the taxing district to

1-10  which it applies.

1-11      2.  Except as otherwise provided in subsections 3 and 4,

1-12  the taxable value of real property is the taxable value from

1-13  which the assessed value for the Fiscal Year 2001-2002 was

1-14  calculated but, if the property was not appraised or

2-1  reappraised for that fiscal year, the taxable value

2-2  determined by appraisal or reappraisal for a subsequent

2-3  Fiscal Year may be appropriately adjusted to determine the

2-4  taxable value as of the Fiscal Year 2001-2002.

2-5  3.  If the ownership of real property is transferred to the

2-6  extent of one-half or more of the total interest in the

2-7  property, except a transfer to or between spouses, to or from

2-8  a separate legal entity of which the transferor is the

2-9  beneficial owner, or to a child or grandchild of the

2-10  transferor, the taxable value of the property must be

2-11  redetermined as of the date of transfer of the property. If

2-12  new improvements to real property are constructed, except

2-13  to replace existing improvements destroyed by natural

2-14  disaster or other casualty, or existing improvements are

2-15  materially enhanced, the taxable value of the property must

2-16  be increased by the full cash value of the new improvement

2-17  or enhancement. If real property is converted to another

2-18  use, the taxable value of the property must be redetermined

2-19  after the conversion by appraisal at its full cash value in

2-20  accordance with the new use of the property.

2-21      4.  The taxable value of real property must be increased

2-22  from year to year by the lesser of:

2-23      (a) The percent of increase in the Consumer Price Index

2-24  for All Urban Consumers compiled by the Federal Bureau

2-25  of Labor Statistics for the preceding calendar year, if that

2-26  Index increases; or

2-27      (b) Two percent.

2-28  The taxable value must be decreased from year to year by

2-29  the percent of decrease in the Consumer Price Index for All

2-30  Urban Consumers compiled by the Federal Bureau of

2-31  Labor Statistics for the preceding calendar year, if that

2-32  Index decreases. The Legislature shall provide by law for

2-33  another appropriate method of determining a percentage of

2-34  increase or decrease in the average annual cost of living if

2-35  the Index specified in this section ceases to be compiled.

2-36      5.  The Legislature may provide by law the

2-37  circumstances under which:

2-38      (a) An owner domiciled in this state who has attained

2-39  the age of 62 years may replace his principal residence with

2-40  another of comparable value and transfer to the new

2-41  residence the taxable value of the old residence for the

2-42  purpose of limiting the ad valorem tax on the property.

2-43      (b) A new improvement may be constructed, or an

2-44  existing improvement enhanced, without change in the

2-45  taxable value of real property if the construction or

3-1  enhancement is appropriate to protect the safety of the

3-2  occupants or improve accessibility to the disabled.

3-3  (c) An owner whose real property is taken by the

3-4  exercise of eminent domain may replace that property with

3-5  property of comparable value and transfer to the new

3-6  property the taxable value of the old property for the

3-7  purpose of limiting the ad valorem tax on the property.

3-8  6.  No tax may be imposed on the sale or other transfer

3-9  of real property which did not exist on the date this section

3-10  becomes effective.

3-11  And be it further

3-12      Resolved, That Section 1 of Article 10 of the Nevada

3-13  Constitution be amended to read as follows:

3-14      Section 1.  1.  [The] Except as otherwise provided in

3-15  Section 6 of this Article, the legislature shall provide by law

3-16  for a uniform and equal rate of assessment and taxation, and

3-17  shall prescribe such regulations as shall secure a just

3-18  valuation for taxation of all property, real, personal and

3-19  possessory, except mines and mining claims, which shall be

3-20  assessed and taxed only as provided in section 5 of this

3-21  article.

3-22      2.  Shares of stock, bonds, mortgages, notes, bank

3-23  deposits, book accounts and credits, and securities and choses

3-24  in action of like character are deemed to represent interest in

3-25  property already assessed and taxed, either in Nevada or

3-26  elsewhere, and shall be exempt.

3-27      3.  The legislature may constitute agricultural and open-

3-28  space real property having a greater value for another use

3-29  than that for which it is being used, as a separate class for

3-30  taxation purposes and may provide a separate uniform plan

3-31  for appraisal and valuation of such property for assessment

3-32  purposes. If such plan is provided, the legislature shall also

3-33  provide for retroactive assessment for a period of not less

3-34  than 7 years when agricultural and open-space real property is

3-35  converted to a higher use conforming to the use for which

3-36  other nearby property is used.

3-37      4.  Personal property which is moving in interstate

3-38  commerce through or over the territory of the State of

3-39  Nevada, or which was consigned to a warehouse, public or

3-40  private, within the State of Nevada from outside the State of

3-41  Nevada for storage in transit to a final destination outside the

3-42  State of Nevada, whether specified when transportation

3-43  begins or afterward, shall be deemed to have acquired no

3-44  situs in Nevada for purposes of taxation and shall be exempt

3-45  from taxation. Such property shall not be deprived of such

4-1  exemption because while in the warehouse the property is

4-2  assembled, bound, joined, processed, disassembled, divided,

4-3  cut, broken in bulk, relabeled or repackaged.

4-4  5.  The legislature may exempt motor vehicles from the

4-5  provisions of the tax required by this section, and in lieu

4-6  thereof, if such exemption is granted, shall provide for a

4-7  uniform and equal rate of assessment and taxation of motor

4-8  vehicles, which rate shall not exceed five cents on one dollar

4-9  of assessed valuation.

4-10      6.  The legislature shall provide by law for a progressive

4-11  reduction in the tax upon business inventories by 20 percent

4-12  in each year following the adoption of this provision, and

4-13  after the expiration of the 4th year such inventories are

4-14  exempt from taxation. The legislature may exempt any other

4-15  personal property, including livestock.

4-16      7.  No inheritance tax shall ever be levied.

4-17      8.  The legislature may exempt by law property used for

4-18  municipal, educational, literary, scientific or other charitable

4-19  purposes, or to encourage the conservation of energy or the

4-20  substitution of other sources for fossil sources of energy.

4-21      9.  No income tax shall be levied upon the wages or

4-22  personal income of natural persons. Notwithstanding the

4-23  foregoing provision, and except as otherwise provided in

4-24  subsection 1 of this section, taxes may be levied upon the

4-25  income or revenue of any business in whatever form it may

4-26  be conducted for profit in the state.

4-27      10.  The legislature may provide by law for an abatement

4-28  of the tax upon or an exemption of part of the assessed value

4-29  of a single-family residence occupied by the owner to the

4-30  extent necessary to avoid severe economic hardship to the

4-31  owner of the residence.

 

4-32  H