Property Tax Fairness and Relief Act
The Property Tax Fairness and Relief Model Act reins in rising property taxes by capping annual revenue growth and returning excess collections directly to taxpayers. It restores balance by eliminating narrowly tailored corporate carve-outs that shift costs onto homeowners and small businesses, while preserving local services through responsible funding. The Act prioritizes predictability, fairness, and transparency for taxpayers.
Key Provisions
Annual Cap on Property Tax Revenue Growth. Limits yearly growth in total property tax revenue for taxing entities, adjusted for inflation and population changes.
Refund or Credit of Excess Collections. Requires automatic refunds or bill credits when collections exceed the allowable cap.
Elimination of Corporate Property Tax Carve-Outs. Repeals or sunsets property tax exemptions and abatements for large businesses unless justified by clear public benefit.
Voter-Approved Override Authority. Allows local voters to approve temporary increases above the cap for specific purposes.
Transparency and Public Reporting. Mandates clear, accessible reporting on tax collections, refunds, and incentive impacts.
Model Language
Section 1. Short Title. This Act shall be known and may be cited as the “Property Tax Fairness and Relief Act.”
Section 2. Definitions. As used in this Act:
(a) “Taxing entity” means any state, county, municipality, school district, or other political subdivision authorized to levy property taxes.
(b) “Base year revenue” means the total property tax revenue levied by a taxing entity in the immediately preceding fiscal year, excluding revenue attributable to newly constructed, newly improved, or newly annexed property.
(c) “Refund mechanism” means a method of returning excess property tax revenue to taxpayers through direct payments, tax bill credits, or equivalent means.
(d) “Corporate property tax carve-out” means any exemption, abatement, credit, or preferential assessment granted to a business entity exceeding thresholds for size, revenue, or market share, unless conditioned on demonstrable and measurable public benefit.
Section 3. Property Tax Revenue Growth Cap.
(a) Beginning in fiscal year [insert year], no taxing entity shall increase its total property tax revenue by more than a fixed percentage above base year revenue.
(b) The allowable growth percentage shall be adjusted annually to reflect: (1) Inflation, as measured by a recognized consumer price index; and (2) Net population growth within the taxing entity’s jurisdiction.
(c) Revenue attributable to new construction or substantial improvements shall not count toward the cap.
Section 4. Refund of Excess Property Tax Collections.
(a) If a taxing entity collects property tax revenue in excess of the amount permitted under Section 3, the excess amount shall be returned to taxpayers through a refund mechanism within twelve months.
(b) The administering agency shall oversee refund distribution and ensure proportional benefit to taxpayers.
Section 5. Elimination of Corporate Property Tax Carve-Outs.
(a) On or after [insert date], corporate property tax carve-outs shall be repealed or sunset unless renewed through an affirmative legislative finding of net public benefit.
(b) Any new or renewed carve-out shall include measurable performance standards, public reporting requirements, and a defined expiration date.
Section 6. Property Tax Relief Fund.
(a) A Property Tax Relief Fund is established to receive revenues recovered from repealed or expired corporate property tax carve-outs.
(b) Monies in the Fund shall be used exclusively for property tax refunds, credits, or rate reductions.
(c) The Fund shall be subject to annual audit and public disclosure.
Section 7. Local Voter Override.
(a) A taxing entity may exceed the revenue cap only if a majority of voters approve a ballot measure specifying: (1) The purpose of the increase; (2) The duration of the increase; and (3) The maximum revenue impact.
(b) Any approved increase shall expire as stated in the ballot measure.
Section 8. Transparency and Public Reporting.
(a) Each taxing entity shall publish an annual property tax transparency report detailing: (1) Total property tax revenue collected; (2) Compliance with the revenue cap; (3) Refunds or credits issued; (4) Revenue impacts of corporate property tax carve-outs.
(b) Reports shall be made publicly available online in a searchable format.
Section 9. Severability. If any provision of this Act is held invalid, such invalidity shall not affect other provisions that can be given effect without the invalid provision.
Section 10. Effective Date. This Act shall take effect on [insert date] and apply to property tax levies and incentive programs beginning in the next fiscal year.