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Program A: Property Taxation Regulatory/Oversight

Program Authorization: La. Constitution, Article VII, Section 18; R.S. 47:1701 et seq.

PROGRAM DESCRIPTION

The mission of the Property Taxation Regulatory/Oversight Program is to administer and enforce the Louisiana laws relating to local property tax assessments; determine tax assessments of public service properties; and formulate and implement a system that ensures uniformity of tax assessments throughout all parishes of the state.

The goal of the Property Taxation Regulatory/Oversight Program is to ensure a fair and equitable distribution of the tax burden among Louisiana property owners by the establishment of statewide uniformity of assessment values of property subject to ad valorem taxation.

The Property Taxation Regulatory/Oversight Program provides staff and support for the Louisiana Tax Commission (LTC). Public hearings are conducted by the commission: (1) on appeals from tax recipient bodies or assessors from the action of the parish board of review; (2) on protest of valuation set by the commission on public service properties; and (3) on appeals by assessors and tax recipients concerning ratio studies conducted by the commission. The commission measures the level of appraisals or assessments and the uniformity of assessments for each major class of property by parish throughout the state and annually notifies each assessor and tax recipient body of the results of its measurements; prepares and issues annual guidelines for use by local assessors, tax representatives, and taxpayers; develops, maintains and enforces a statewide system for preparation of assessment lists, tax rolls, and other necessary forms; and reviews and certifies assessment rolls. The commission also determines tax assessments of all insurance companies, financial institutions and bank stock companies and distributes assessment values statewide to local assessors for placement on roll books. The commission appraises and determines fair market value of all operating properties owned by public service companies in the State of Louisiana, distributes assessed valuations to various local taxing jurisdictions, and performs audits to assure compliance. Trained field personnel of the LTC provide direct assistance to the staffs of many local assessors. In addition, the commission provides information on ownership and location of certain movable property to assessors.

Ratio studies are used by the commission to establish whether assessment values of real property are proper and uniform. Ratio studies are conducted in each parish annually. Real estate appraisals used in the ratio study are representative of all different types of property found in the parishes. The estimates of values are determined and compared to the assessments. The assessed values should be within 10% of that indicated by the appraisals.

Appraisals and audits, for tax assessment purposes, are conducted with respect to owners of all public service properties in Louisiana. These properties are assessed by the LTC at the rate of 10% of fair market value of land, 25% of fair market value for all other property owned by public service companies, with the exception of airlines, railroads, private car companies, and electric co-ops, which are assessed at the rate of 15% of fair market value. Each company's assessed valuation is distributed to the various local taxing jurisdictions by the commission. Audits are performed to assure compliance as well as to verify financial information. Louisiana Tax Commission auditing personnel conduct audits with respect to assessments of personal property in each parish annually. An audit procedure allows commission staff to perform out-of-state audits and provides for self-generated expenses related thereto. Program staff also gather and analyze data for biennial reports issued by the commission.

The Property Taxation Regulatory/Oversight Program is composed of the following activities: Administrative, Supervision and Assistance to Local Assessors, Public Service/Audit, and Review of Assessments/Fiscal Affairs.

OBJECTIVES AND PERFORMANCE INDICATORS

1. In FY 1998-99, the Property Taxation Regulatory/Oversight Program, through the Administration activity, will hear 100% of all protest hearings within the tax year in which the protest was filed.

Explanatory Note: All hearings dealing with the promulgation of rules and regulations must be held annually before adoption of the rules and regulations.

2. In FY 1998-99, the Property Taxation Regulatory/Oversight Program, through its Supervision and Assistance to Local Assessors activity, will value 100% of all banks and insurance companies.

3. In FY 1998-99, the Property Taxation Regulatory/Oversight Program will complete ratio studies in all parishes to ensure fairness and equality for all taxpayers.

1 Each parish must pass their ratio study prior to their tax rolls being certified by the Louisiana Tax Commission.

4. In FY 1998-99, the Property Taxation Regulatory/Oversight Program will conduct as many appraisals requested by assessors throughout the state as possible.

1 Because of the limited number of appraisers employed by the Tax Commission and the expanding subdivisions and commercial properties throughout the state, the Louisiana Tax Commission is unable to complete all of the assessor requests for appraisals.

2 More complex narrative appraisals have been made to establish values on special purpose real estate. Property such as hotels, motels, and nursing homes are more effectively dealt wit in this manner rather than in the mass appraisal process.

3 Tax Commission staff continue to assist local governments to appraise major income-producing property, using the income approach to value method, and continue to expand the appraisal program by including industrial property such as paper mills, grain elevators, and petrochemical plants. Commission staff conduct complex appraisals of large statewide industrial facilities that are being added to parish roll books upon completion of their ten-year industrial tax exemptions.

5. In FY 1998-99, the Property Taxation Regulatory/Oversight Program, through its Public Service/Audit Section, will conduct an appraisal and assessment on every public utility company within the State of Louisiana.

1 The public service tax dollars increased for the current fiscal year because of the addition of two nuclear power plants to the tax rolls. While these large assessments caused the taxes to drastically increase over the last two years, these same assessment will decrease just as quickly as they increased. The deregulation of the electric industry is expected to cause decreases in the properties that will be state assessed by the Tax Commission and thus reduce the commission's assessed values significantly.

2 This section also performs audits on the utility companies to assure compliance with state law. The number of public service audits that will produce revenue has decreased to a minimum since all major industries have been audited and are now reporting correctly. The $60,000 public service fee was a one-time audit that will not be duplicated.

6. In FY 1998-99, the Property Taxation and Regulatory/Oversight Program will audit all personal property requests made by the 70 assessors of the state and any related industry audits.

1 While the number of audits will remain constant, the amount that will be derived from these audits will decrease due to the fact that most of the major businesses have already been audited and the majority of Louisiana Tax Commission audits will now be assessor requests.

7. The Property Taxation Regulatory/Oversight Program, through its Review of Assessment/Fiscal Affairs activity, will certify all 70 rolls before November 15, 1998, and process all change orders issued by the assessors.

1 Assessors are required by law to secure certification by the Louisiana Tax Commission before filing their assessment with the parish collectors for billing. Change orders provide for the changing and correcting of assessments in order to determine that each conforms to the true and correct values or to cancel erroneous or dual assessments.

Quality Indicator: The majority of the 64 parishes are now complying with rules and regulations governing taxpayer protests.

RESOURCE ALLOCATION FOR THE PROGRAM

SOURCE OF FUNDING

This program is funded from state general fund direct and statutory dedication. The dedication is the Louisiana Tax Commission Expense Fund. The Louisiana Tax Commission Expense Fund is comprised of fees assessed for audits and appraisals of public service properties, banking institutions, and insurance companies. (Per R.S.39:32B.(8), see table below for a listing of expenditures out of each statutory dedicated fund.)

ANALYSIS OF RECOMMENDATION

GENERAL FUND

TOTAL

T.O.

 

DESCRIPTION

 

 

 

 

 

$1,664,697

$2,139,697

36

 

ACT 18 FISCAL YEAR 1997-1998

 

 

 

 

 

 

 

 

 

BA-7 TRANSACTIONS:

$0

$0

0

 

None

 

 

 

 

 

$1,664,697

$2,139,697

36

 

EXISTING OPERATING BUDGET - December 10, 1997

 

 

 

 

 

($6,500)

($6,500)

0

 

Non-Recurring Adjustment for Biennial Publication

$0

$106,000

0

 

Equipment/Major Repairs Adjustment(s)

$26,802

$26,802

0

 

Annualization of 1997-'98 Merit Pay Adjustment(s)

$27,935

$27,935

0

 

1998-'99 Merit Pay Adjustment(s)

$45,400

$45,400

0

 

Attrition Adjustment(s)

($8,385)

($8,385)

0

 

Retirement Rate Adjustment(s)

$152

$152

0

 

Adjustment(s) for Civil Service, Training and Other Statewide Interagency Transfer Activities

($17,751)

($17,751)

0

 

Risk management Adjustment(s)

 

 

 

 

 

$1,732,350

$2,313,350

36

 

TOTAL RECOMMENDED

 

 

 

 

 

$67,653

$173,653

0

 

DIFFERENCE (TOTAL RECOMMENDED AND EXISTING OPERATING BUDGET)

The total means of financing for this program is recommended at 108.1% of the existing operating budget. It represents 93.6% of the total request ($2,470,936) for this program. The increase in the recommended level is primarily attributed to the attrition adjustment necessary to reflect an anticipated attrition factor of 2.4%. The increase in the amount of $106,000 in Statutory Dedications is attributed to the funding of a replacement telephone system and computer equipment utilizing the Louisiana Tax Commission Expense Fund.

PROFESSIONAL SERVICES

$142,873

 

Legal and technical appraisal services including rendering opinions, drafting legislation, establishing and advising the Tax Commission with respect to the procedure and conducting of public hearings and tax appeals hearings, and representing the commission in court in those instances where the Attorney General is unable to do so

 

 

 

 

 

$142,873

 

TOTAL PROFESSIONAL SERVICES

OTHER CHARGES

 

 

Interagency Transfers:

$4,198

 

Payments to the Department of Civil Service

$413

 

Comprehensive Public Training Program - personnel training services

 

 

 

$4,611

 

TOTAL INTERAGENCY TRANSFERS

ACQUISITIONS AND MAJOR REPAIR

$106,000

 

Replace telephone system and computer equipment

 

 

 

$106,000

 

TOTAL ACQUISTIONS AND MJAOR REPAIRS


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