Revenue & Taxation- House

People here. Forty seven. Representative I believe you have an amendment you're recognized to present your amendment. Okay members The Amendment For in all intents and purposes is a new bill. So would without having explained it twice I'd like to make a motion to adopt the amendment this time and then I'll explain the the Bill. We have a motion do pass. Any questions on the amendment. Two nine all in favor. Any opposed. Your right uh recognized to present your bill. All right my present the bill as amended Members this bill came about if you remember the plant board bill that we just recently ran it talks about how appointments can be made to these boards the way it was in the past for at least in the plant board the the the industry groups with one select in these positions and I think that was found unconstitutional so what this bill does very soon to the plant board it makes modifications to those appointments so if you recall there three commissioner positions with different qualification requirements in this bill there's an attorney position a CPA position and currently there is an attorney and CPA position a combine combine position. Each of those positions would be shortlisted by the association that represents so for example the attorneys will be represented are shortlisted by the Bar Association the CPA's by the CPA society and then the attorney and CPA position would be shortlisted by the Supreme Court so this amendment makes two more changes the attorney and CPA position becomes attorney or CPA reason for that it's very difficult apparently to find someone who is an attorney and also a CPA. so this will broaden the pool of potential appointees it will continue to be shortlisted by the Supreme Court and then the governor can designate the chief commissioner from the tax appeals commission from any among those three commissioners. And representative of Warren but deflation I gave you earlier is correct but I wanted to clarify one thing on that the governor can select from the pool of candidates from each of those associations but they also will provide the governor to pick from outside though short lived if desired but they must meet the same qualifications so would be the same it be a CPA would be an attorney it but they she could pick from outside the it's you if you desire to do so so papajohns FOR the incorrect information or. That I'll be happy to answer any questions. Are there any questions from committee. The one from the audience to speak for against the bill. C. none. Close for your bill yep I'm closer my bill when I make an motion do pass as amended we have a motion do pass all those in favor. Hi eighty opposed congratulations you passed your bill. As amended. Our members are gonna be skipping over Senate bill two O. seven they're still. Doing some things I don't know justice on that bill we're gonna move down house bill fourteen seventy five representative. And this also has a member as well so just give us a second we'll have that a member not to you the. Good. A representative Beatty you are recognized to present your amendment. Thank you Mr chairman have an amendment to house bill fourteen seventy five the Amendment would add representatives Gazaway hall and Morris co sponsors of the bill. Members any questions on the amendment. Our seeing none. You would like to make a motion presented one. Your motion do pass on the intimate to adopt the amendment thank you all those in favor signify by saying aye. Oppose the ayes have it all right you're members adopt you can present your bill. Mr chairman committee on I'm here to present house bill fourteen seventy five in title only as an act to amend the property tax exemption for in tangible personal property and identify the tangible personal property of self storage facilities that is exempt from property tax and to require the county assessor to provide an explanation related to a taxpayers and tangible personal property and for other purposes In short the purpose of fourteen seventy five this ensure that non real estate assets primarily in tangible personal property that those assets are excluded from property tax assessments for self storage facilities I will tell you that this morning right before committee we have one agreed upon amendment to the bill on page two online to a page two this so this will be amended on the Senate in with the with the words with respect to a self storage facility will be removed from the bill so that so these procedures will apply to all property tax assessments and with that I'd I think we're all in agreement there's no opposition this bill and senator he'll handle that amendment on the Senate in I have with me today Dan Lusk that is a representative of I'll let Dan introduce himself if that's okay yes Sir if you would just introduce yourself for the record good morning a committee member some down low sky and the current president of the Arkansas self storage association. Did you have any of you want to add to this presentation of the bill. We just open questions okay all right members you for the presentation of the bill or any questions. President Burch you're recognized thank you Mr chairman could you explain what it means by future development opportunities. Yes I'd be happy to that came about because it was brought to our attention by the national self storage association that in Colorado specifically in Denver that assessors were considering many warehouses and warehouses as if they were future marijuana dispensaries and by doing that it allow them to tax or increase the value of this property significantly so what we're asking is that we don't want the assessor to look at our property and say well we're going to assess you as something differently than what what you're currently use this because in the future you might be able to construct something of that nature on the property. Follow Mr you don't have to ask one go ahead thank you so if for example it was a five acres and close to downtown little rock or something that would have commercial value that piece of property would but it wouldn't necessarily have if it were in another location so the fact that it has that potential commercial value and because of its location doesn't warrant a different level of assessment and that piece of land someplace else. I think what what they were trying to say was that they don't want the business that they don't want to. Be considered something other than what it currently is. because we most of us are small business owners we're not in we're not in the the business of selling our storage facility so we don't want it to be considered for something that it may never even be. And and I'll just add in a follow up on that is when you look at valuations are appraisals you know it's it's as is highest and best use of the property so I think it would take that into consideration you'd also be looking that that similar properties are appraised and assessed on the same basis and level so to consider a future use of a property you know again that creates exponential problems in the appraisal assessment or it's the the current the current utilization that property okay so future development opportunities though wouldn't exclude treating that piece of land us assessing it based on its commercial value of verses a piece of land someplace else at I think the commercial value of that lands accounted for when when the appraise the because it's all the land in that area you know and and so you're going to appraise that based on the the the the the three approaches on commercial land well to the approaches of one more quick question I think we all and I appreciate this bill and I appreciate the amendment so that we're not just developing a carve out for one special industry but I think we all understand that in tangible personal property should never have been taxed and maybe we've had a situation in Arkansas where that's happened so I appreciate the definition what about security system does that mean hardware cameras things like that we're okay it and I think the point is that and this bill just specifically defines the intangible assets that we're we have been just discussing or that was a concern in some of the assessments on self storage facilities in the past where you may have assessors that are are looking at some of these intangibles including them in the assessment on the property so specifically identify some of those are those not tangible items that would be normally given value. The cameras and the the hard assets. I. I don't I don't know on that I I think that you know from an appraisal standpoint that would probably be meal under the fixtures of that facility involved all facilities had similar fixtures that would be included on that side I don't think there's ever of a specific line this card out that would include a security system or something along those lines but I would think that also storage facilities would have have security you know to protect the the assets of the clients that are that are raining in storing items. I don't know if this is appropriate time to ask does anyone from the state assessor's office. Here. Is there anyone from the assessor's here. Good morning. You just push a button and then introduce yourself for the record and then we'll we'll get you on you're going good morning Mister chair members of the committee I'm no longer a county assessor but I'm Senator Carter the director for assessment coordination and I will do my best to try to answer questions appreciate that representative Burch and go ahead thank you Mr chair Sir just on this point I I completely agree with the function of Burch I'm sorry have you would you upon that might down just a little bit we have trouble here you'll hear thank you Sir thank you. Again I completely agree with the finding within ten property is but could you speak to maybe have security systems have been treated in some of the other items that are listed in this bill if in your opinion they would fall under intangibles so most commercial businesses especially do have some type of security systems those will usually be listed under their business personal assessment because they are movable and you know in that but they can include anything from TV monitors to computer systems DVRs all kinds of things and yes that would be considered tangible personal property. Thank you. They get it that's it thank you all right. Presented right you're recognized. Thank you thank you Mr chairman you know this is good this is good bill but you know. Inside our manuals that we use from this session special coordination apartment. You can have two buildings and one will be used for one case one used for another but it's gonna be a little bit higher by square foot by certain things that that you for let's just say if it was a grocery store for it was a jewelry store so you know they may be built out of the same material on mold but that grading and that the amount of of a violation that would come on there would be a all are due to that type of a business that it is when you say so. Thank you representative right so when your value in commercial property you value of do you have classes and so if you have a let's just say you have a twenty five thousand square foot building five thousand of that is office space well it's going to have different flooring it's going to have air conditioning heating those kind of things the other twenty thousand is warehouse so yes it would be valued under a different class and all of this is value used in Marshall and swift manuals which is a nationally recognized commercial appraisal company. Thank you a lot thank you senator after representative Burke's you're recognized thank you this maybe for the sponsor also I know the language in the bill says that it dates back to nineteen seventy six if this were to pass as it is how does that impact. assess any assessments in Arkansas that have been done since nineteen seventy six are we gonna see a situation where cities of money back to property owners. Where they've. I did not sleep the effective date it would start from January of twenty twenty three going forward so it I don't think there would be any But about the law would say that ad valorem taxes shall not be assessed from nineteen seventy six forward and then we've just now to find these other items an ad valorem I just wanna make sure that we're not creating a problem there I don't think we're creating problems that's existing law now that's existing language that's not a change that we're making with this bill thank you. Thank you representative members any other questions. Ninety nine. I believe Mr lust you already kind of spoken for the building when the audience would like to speak for the bill. Or against the bill. Potdevin they have a position on this bill or anything you want to add to this you're good okay all right all right Sing Sing NO further comments on this representative Beatty would you like to close for your bill I would I I'd also like to apologize represent Berks on on the issue I was I was focused more on commercial real estate the evaluations and assessments and not thinking about the actual the property side of that were you identify all the assets of the business on personal property you'd be exactly a hundred percent correct on that side where the business would provide their their business assets was focus strictly on the valuation on the on the real property so thank you with that member side I would appreciate a good vote not close for my bill are members of the bill where the wishes of the committee. We have a motion do pass as amended all right all those any discussion on the motion. Hi seeing none all those in favor signify by saying aye. Opposed I separate congratulations you passed your bill thank you. there's a Texas down to House Bill fifteen twenty three representative more. Welcome to Revenue and Tax Committee way down there yes I feel like I need binoculars to see everyone you're recognized to present your bill thank you Mr chairman thank you Committee H. B. fifteen twenty three is just an update to a bill that was passed last session allowing nonprofit youth athletic organizations operating concession stands to be exempt from collecting sales tax this update removes the term athletic to allow for other non profit organizations to benefit from this exemption as well such as band boosters quiz bowl team six cetera. All right members you for the bill or any questions. Seeing none anyone at all it's going to speak for. Okay we'll catch I just say anyone in the audience likes before the bill or against the bill Oxenham Paul you want to add anything here on this. I'm sorry and just one second Paul apologize representative read and see you're recognized. Well this is this will be a question for Paul okay yeah the right ahead of you introduce yourself and we'll get to the question thank you Mr chair Paul Goehring DFA. Mr thank you Mister chair Mister Gary I'm. Vote I'm saying with the okay I was looking at the. Fiscal impact statement online and the amount was different than what I was in paper but I'm. Well this is embarrassing I'm now seeing that the papers two sign it so my question and answer my own question thank you. Okay well said your. All right Any other questions members appall you go ahead if you had anything to add to this bill you can't thank you Mr chair And thank you represent a more for and Mister chair for sponsoring this bill I think this will be very helpful for our youth that the youth organizations that operate concession stands to remove this ambiguity on what types of war school organizations would be able to operate their concession stands without the need to collect and remit sales tax happy to answer any questions about the bill or the fiscal impact. All right members any questions for Paul. Representative right you're recognized yes Sir thank you Mr chairman with this include like fairs county fairs. The so the these are these are concession stands that are operated by these the school organizations so they have to be operated by the the either volunteers or actual members of the organization's this is primarily going to be operated on school grounds at the whether they're having a and a game or maybe a quiz bowl competition or maybe of the concert that's that's what this is here to provide for all the reason I ask you there's a couple years ago they started of on county fairs collecting sales tax and I just wonder if you might have that included in it but since you don't that's okay yeah and I I would I would say that in terms of the the fiscal impact you know you know it's it I doubt that we're going to really see a tremendous amount of these organizations given that the law was already passed to cover youth athletic organizations that would. Really be kind of changing their processes there there probably lotteries concession stand are offering right now that maybe not be a clearly an athletic organization but they believe that the they've already fitting under the existing law this is really just to clarify that those type of school organizations that are operating concession stands that they can sell those items at the concession stand without paying but collecting sales tax from the customers and remitted to the state what what that'll help all thank you thank you and thank you Mr chairman. Thank you members any other questions. All right just double checking here anyone else on the on his one speak for or against the bill. Start seeing none would you like to close three bills yes Mister chairman I'm close from a bill that would appreciate a good vote represented Fortner you're recognized for motion is a motion to pass in the discussion. All those in favor signify by saying aye. Closed the eyes have it congratulations you pass your bill thank you Mr chairman thanks committee thank you. Thank you very much. I members nothing else on the agenda we will be meeting Thursday at ten AM so seeing no further business we are adjourned.