HSB 65

21 generally governs the assessment of property for property tax purposes and provides that the actual value of all property subject to assessment and taxation shall be the fair and reasonable market value of such property except as provided in that Code section. “Market value” is defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. Sale prices of the property or comparable property in normal transactions reflecting market value, and the probable availability or unavailability of persons interested in purchasing the property, shall be taken into consideration in arriving at its market value. However, sale prices of property in abnormal transactions not reflecting market value shall not be taken into account. This bill modifies the definition of “market value” to be the fair and reasonable value-in-exchange of the fee simple interest of property in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property, but excluding an exchange that is value-in-use. The bill includes a definition of fee simple. The bill also modifies the conditions under which transactions that do not reflect market value may be used by the assessor. Under the bill, in arriving at market value, sale prices of property in transactions not reflecting market value shall not be taken into account. If, however, transactions reflecting market value of the property or comparable property are not available, transactions not reflecting market value may be used, but shall be adjusted to eliminate the effect of factors which distort market value. _____ the provision governing the use of sales to immediate family of the seller.21(2), which specifies that in the event market value of the property being assessed cannot be readily established using transaction data, then the assessor may determine the value of the property using the other uniform and recognized appraisal methods including its productive and earning capacity, if any, industrial conditions, its cost, physical and functional depreciation and obsolescence and replacement cost, and all other factors which would assist in determining the fair and reasonable market value of the property, so long as the actual value is not to be determined by use of only one such factor. The bill adds to the prohibited considerations the value-in-use or present use of the property, intangibles, or going concern value of a business which uses the property. The bill also adds property insurance policies; loan, mortgage, or other financing information; and franchise agreements to the list of prohibited considerations and things that may not be requested by the assessor and modifies conditions for other items prohibited under current law.