PA 09-60—sSB 997

Finance, Revenue and Bonding Committee

Planning and Development Committee


SUMMARY: This act allows a municipality to (1) delay a revaluation scheduled for the 2008, 2009, or 2010 assessment year until the 2011 assessment year and (2) suspend a current revaluation phase-in for up to three years, also until the 2011 assessment year.

It also allows two or more municipalities to agree to revalue their property for property tax purposes according to the same schedule, even if it requires some to revalue later than their individual statutory schedules require. The Office of Policy and Management (OPM) secretary must approve a regional revaluation schedule and any delay in a municipality's scheduled revaluation to accommodate a regional schedule.

Finally, the act repeals a law that allowed municipalities to adjust, with the approval of their legislative bodies, real property values in the assessment years between revaluations. They could do so by calculating an average annual adjustment based on sales data instead of performing an annual revaluation based on the methods the law authorizes. Municipalities that chose to adjust the values in this manner had to continue doing so until the next revaluation and still had to revalue property every five years as the law requires.

EFFECTIVE DATE: July 1, 2009 and applicable to assessment years starting on or after October 1, 2008. (PA 09-196 changed the effective date of the revaluation delay provisions of this act to upon passage and applicable to assessment years starting on or after October 1, 2008. )


Delay Procedure

The act allows municipalities that, under prior law, revalued or must revalue real property in the October 1, 2008, October 1, 2009, or October 1, 2010 assessment years to delay revaluation to the October 1, 2011 assessment year (see BACKGROUND). In other words, these municipalities may continue taxing property based on its value as of October 1, 2007 until October 1, 2011, after which the municipality must revalue the property.

The act allows a similar delay for towns phasing in assessment increases from earlier revaluations. Towns scheduled to implement a phase-in step may suspend the phase-in for up to three years. In other words, a town scheduled to increase the assessment under a phase-in may suspend the increase and continue taxing property based on current values until the October 1, 2011 assessment year.

Before a town may implement either type of delay, it must be approved by its legislative body. The existing statutory five-year revaluation or phase-in schedule for any town that adopts a delay must resume after the delay at the point where the delay started. But a town whose regular statutory five-year schedule requires it to implement a revaluation before a resumed phase-in ends must do so when the statute requires it, even if that means it does not complete all the remaining phase-in steps.

2008 Grand Lists In Towns That Delay Revaluation

The act requires the assessor or board of assessors in a municipality that delays a revaluation or suspends a phase-in for the 2008 assessment year to prepare a revised grand list for 2008 that reflects the assessments for the 2007 assessment year, subject only to changes in ownership, new construction, and demolitions. The assessor must send to the affected person's last-known address, notice of (1) any increase in the valuation of real estate over its 2007 valuation or (2) for new real estate, the valuation that will appear on the 2008 grand list. The person can appeal the increase or valuation during the next regular session of the board of assessment appeals at which appeals may be heard.

The act allows the person or entity authorized by law to prepare rate bills in a municipality that has delayed a revaluation or suspended a revaluation phase-in under the act to prepare new rate bills, notwithstanding any law or municipal charter to the contrary.


Interlocal Agreements

By law, all municipalities must revalue property at least once every five years, but may do so according to different schedules. This act allows two or more municipalities to revalue property according to a regional schedule by entering into an interlocal agreement.

Existing law already allows municipalities to enter into interlocal agreements to perform any function they can perform separately, including revaluing property. But, under prior law, municipalities could postpone a scheduled revaluation only for certain specific reasons. The act allows them to do so to accommodate a regional revaluation schedule. By law, the municipalities' legislative bodies must approve any interlocal agreement the same way they approve ordinances or annual budgets.

Under the act, interlocal agreements implementing a regional revaluation schedule must:

1. establish or designate an entity, which may be a regional planning organization, to coordinate the revaluation;

2. indicate how the participating municipalities will hire and oversee a state-certified revaluation company;

3. include a schedule listing any changes that must be made to each municipality's revaluation schedule;

4. identify the administrative and procedural processes that will be used to implement the revaluation; and

5. estimate how much the regional revaluation program will save the participating municipalities.

Regional Revaluation Schedule

Under the act, an interlocal revaluation agreement must require either (1) approximately one-fifth of the parcels in the participating municipalities to be revalued over the five-year period or (2) all of the parcels to be revalued at the same time according to the same five-year schedule. In either case, the parcels must be revalued according to the same criteria and procedures that apply when municipalities separately revalue property.

OPM Secretary's Approval

In preparing the regional schedule, the participating municipalities must indicate if it requires them to deviate from their individual five-year schedules by revaluing property sooner or later than scheduled. Before entering into the agreement, they must submit that analysis to the OPM secretary for review and approval. The secretary has up to 45 days to notify the municipalities of his decision. If he disapproves the changes that must be made to each municipality's revaluation schedule, he must explain why and recommend necessary revisions. If any of the changes requires a municipality to postpone its next scheduled revaluation, the secretary must expressly approve that postponement when he notifies the municipalities about the schedule.

Withdrawing from the Interlocal Agreement

The act requires municipalities to notify the secretary if they decide to withdraw from the agreement before or after it is executed. If a municipality withdraws before the agreement is executed, it must resume revaluing property according to its original five-year schedule. If it withdraws after the property has been revalued under the agreement, it must start a new five-year cycle, using the date of the last regional revaluation as its starting point.


Implementing Revaluation

The law requires municipalities to tax property based on its fair market value as of October 1 annually. Municipalities begin taxing property based on those values during the fiscal year starting the following July 1. Thus, towns that revalued their property in the 2008 assessment year must implement the revaluation starting July 1, 2009.

OLR Tracking: JSL: KM: PF: DF