§ 26-26-402 - Procedure for adjustment of taxes after reappraisal or reassessment of property.
26-26-402. Procedure for adjustment of taxes after reappraisal or reassessment of property.
(a) (1) Whenever a countywide reappraisal or reassessment of property subject to ad valorem taxes, made in accordance with procedures established in this subchapter and with regulations of the Assessment Coordination Division of the Arkansas Public Service Commission, or its successor agency, adopted pursuant to the authority granted in this section shall result in an increase in the aggregate value of taxable real and personal property in any taxing unit in this state of ten percent (10%) or more over the previous year, the rate of city or town, county, school district, and community college district taxes levied against the taxable real and personal property of each taxing unit shall, upon completion of the reappraisal or reassessment, be adjusted or rolled back by the governing body of the taxing unit for the year for which levied as provided.
(2) The adjustment or rollback of tax rates or millage for the base year as defined in subdivision (5) of this subsection shall be designed to assure that each taxing unit will receive an amount of tax revenue from each tax source no greater than ten percent (10%) above the revenues received during the previous year from each tax source, adjusted for any lawful tax or millage rate increase or reduction imposed in the manner provided by law for the year for which the tax adjustment or rollback is to be made, and after making the following additional adjustments:
(A) By excluding from calculation the assessed value of, and taxes derived from, tangible personal property assessed in the taxing unit and all real and tangible personal property of public utilities and regulated carriers assessed in the taxing unit; and
(B) (i) By computing the adjusted or rollback millage rates on the basis of the reassessed taxable real property for the base year that will produce an amount of revenue no greater than ten percent (10%) above the revenues produced from the assessed value of real property in the taxing unit after making the aforementioned adjustments for personal properties and properties of public utilities and regulated carriers as provided in subdivision (a)(2)(A) from millage rates in effect in the taxing unit during the base year in which the millage adjustment or rollback is to be calculated;
(ii) In calculating the amount of adjusted or rollback millage necessary to produce tax revenues no greater than ten percent (10%) above the revenues received during the previous year, the governing body shall separate from the assessed value of taxable real property of the taxing unit, newly discovered real property and new construction and improvements to real property, after making the adjustments for personal property or property of public utilities and regulated carriers as provided in subdivision (a)(2)(A), and shall compute the millage necessary to produce an amount of revenues equal to, but no greater than, the base year revenues of the taxing unit from each millage source. Such taxing unit may elect either to obtain an increase in revenues equal to the amount of revenues that the computed or adjusted rollback millage will produce from newly discovered real property, new construction, and improvements to real property, or, if the same is less than ten percent (10%), the governing body of the taxing unit may recompute the millage rate to be charged to produce an amount no greater than ten percent (10%) above the revenues collected for taxable real property during the base year.
(3) The amount of revenues to be derived from taxable personal property assessed in the taxing unit for the base year, other than personal property taxes to be paid by public utilities and regulated carriers in the manner provided, shall be computed at the millage necessary to produce the same dollar amount of revenues derived during the current year in which the base year adjustment or rollback of millage is computed, and the millage necessary to produce the amount of revenues received from personal property taxes received by the taxing unit, for the base year shall be reduced annually as the assessed value of taxable personal property increases until the amount of revenues from personal property taxes, computed on the basis of the current year millage rates, will produce an amount of revenues from taxable personal property equal to or greater than that received during the base year, and thereafter the millage rates for computing personal property taxes shall be the millage rates levied for the current year.
(4) The taxes to be paid by public utilities and regulated carriers in the respective taxing units of the several counties of this state during the first five (5) calendar years in which taxes are levied on the taxable real and personal property as reassessed and equalized in each of the respective counties as a part of a statewide reappraisal program shall be the greater of the following:
(A) The amount of taxes paid on property owned by such public utilities or regulated carriers in or assigned to the taxing unit, less adjustments for properties disposed of or reductions in the assessed valuation of such properties in the base year as defined below; or
(B) The amount of taxes due on the assessed valuation of taxable real and tangible personal property belonging to the public utilities or regulated carriers located in or assigned to the taxing unit in each county at millage rates levied for the current year.
(5) As used in this section, the term "base year" shall mean the year in which a county completes reassessment and equalization of taxable real and personal property as a part of a statewide reappraisal program and extends the adjusted or rolled back millage rates for the first time, as provided in subdivision (1) of this subsection, for the respective taxing units in that county for collection in the following year.
(A) In the event the amount of taxes paid the taxing unit in a county in the base year, as defined in this subdivision, is greater than the taxes due to be paid to such taxing unit for the current year of any year of the second period of five (5) years after the base year, the difference between the base-year taxes and the current year taxes for any year of the five-year period shall be adjusted as follows: Click here to view image.
(B) If the current-year taxes of a public utility or regulated carrier equal or exceed the base-year taxes due a taxing unit during any year of the first ten (10) years after the base year, the amount of taxes to be paid to the taxing unit shall thereafter be the current-year taxes, and the adjustment authorized in this section shall no longer apply in computing taxes to be paid to such taxing unit.
(6) In the event the requirement for payment of taxes by public utilities and regulated carriers, or any class of utilities or carriers for the ten-year period as provided in subdivision (a)(5)(B) shall be held by court decision to be contrary to the constitution or statutes of this state or of the federal government, all utilities and all classes of carriers shall receive the same treatment provided or required under the court order for a particular type of carrier or utility if deemed necessary to promote equity between similar utilities or classes of carriers.
(b) If it is determined that the adjustment or rollback of millages as provided for in this section will render income from millages pledged to secure any bonded indebtedness insufficient to meet the current requirements of all principal, interest, paying agents' fees, reserves, and other requirements of a bond indenture, any pledged millage shall be rolled back or adjusted only to a level which will produce at least a level of income sufficient to meet the current requirements of all principal, interest, paying agents' fees, reserves, and other requirements of the bond indenture.
(c) Pursuant to the application of Arkansas Constitution, Amendment 74, to the rollback provisions of Arkansas Constitution, Amendment 59, for millage rates levied by the various school districts within the county, if it is determined that the adjustment or rollback of millages as provided in Amendment 59 will result in a tax rate available for maintenance and operation of less than the uniform rate of tax, then the millage shall be rolled back only to the uniform rate of tax plus debt service millage required, and no further.