GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

S	1 

SENATE BILL 128*

Short Title:  Review of Exempt Property.	(Public)
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Sponsors: Senators Winner, Ballance, Goldston, Hunt, Odom, Raynor, and Shaw.
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Referred to:  Finance.
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February 20, 1991

A BILL TO BE ENTITLED
AN ACT TO PROVIDE FOR THE SYSTEMATIC REVIEW OF PROPERTY EXEMPTED OR EXCLUDED FROM PROPERTY TAXATION AND TO ALLOW PROPERTY THAT WAS ERRONEOUSLY EXEMPTED OR EXCLUDED TO BE TREATED AS DISCOVERED PROPERTY.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-282.1(a) is rewritten to read:
"(a)	Every owner of property claiming exemption or exclusion from property taxes under the provisions of this Subchapter has the burden of establishing that the property is entitled thereto. Except as provided below, an owner claiming exemption or exclusion shall annually file an application for exemption or exclusion during the listing period.  If the property for which the exemption or exclusion is claimed is appraised by the Department of Revenue, the application shall be filed with the Department.  Otherwise, the application shall be filed with the assessor of the county in which the property is situated.  An application must contain a complete and accurate statement of the facts that entitle the property to the exemption or exclusion and must indicate the municipality, if any, in which the property is located. Each application filed with the Department of Revenue or an assessor shall be submitted on a form approved by the Department.  Application forms shall be made available by the assessor and the Department, as appropriate.
(1)	The United States government, the State of North Carolina and the counties and municipalities of the State are exempted from the requirement that owners file applications for exemption.
(2)	Owners of the special classes of property excluded from taxation under G.S. 105-275(5), (15), (16), (26), (31), (33), or (34), or exempted under G.S. 105-278.2 are not required to file applications for the exclusion or exemption of that property.
(3)	After an owner of property entitled to exemption under G.S. 105-278.3, 105-278.4, 105-278.5, 105-278.6, 105-278.7, or 105-278.8 or exclusion under G.S. 105-275(3), (7), (12), or (39), G.S. 105-277.1, or G.S. 105-278 has applied for exemption or exclusion and the exemption or exclusion has been approved, the owner is not required to file an application in subsequent years except in the following circumstances:
a.	New or additional property is acquired or improvements are added or removed, necessitating a change in the valuation of the property; or
b.	There is a change in the use of the property or the qualifications or eligibility of the taxpayer necessitating a review of the exemption or exclusion.
(4)	After an owner of property entitled to exclusion under G.S. 105-277.10 has applied for the exclusion and the exclusion has been approved, the owner is not required to apply for the exclusion in subsequent years so long as the classified property, including classified property acquired after the application is approved, is used or held for use directly in manufacturing or processing as part of industrial machinery.
(5)	Upon a showing of good cause by the applicant for failure to make a timely application, an application for exemption or exclusion filed after the close of the listing period may be approved by the Department of Revenue, the board of equalization and review, the board of county commissioners, or the governing body of a municipality, as appropriate.  An untimely application for exemption or exclusion approved under this subdivision applies only to property taxes levied by the county or municipality in the calendar year in which the untimely application is filed."
Sec. 2.  G.S. 105-296 is amended by adding a new subsection to read:
	"( l) The assessor shall annually review at least one-eighth of the parcels in the county exempted or excluded from taxation to verify that these parcels qualify for the exemption or exclusion.  By this method, the assessor shall review the eligibility of all parcels exempted or excluded from taxation in an eight-year period.  The assessor may require the owner of exempt or excluded property to submit any information needed by the assessor to verify that the property continues to qualify for the exemption or exclusion."
Sec. 3.  G.S. 105-312(a) is rewritten to read:
"(a)	Definitions. – For purposes of this Subchapter:
(1)	The phrase ‘discovered property' includes:
a.	Property that was not listed during a listing period.
b.	Property that was listed but the listing included a substantial understatement.
c.	Property that has been granted an exemption or exclusion from taxation under an application for exemption or exclusion and does not qualify for the exemption or exclusion.
(2)	The phrase ‘failure to list property' includes:
a.	Failure to list property during a listing period.
b.	A substantial understatement of listed property.
c.	Failure to notify the assessor that property granted an exemption or exclusion under an application for exemption or exclusion does not qualify for the exemption or exclusion.
(3)	The phrase ‘to discover property' means to determine that:
a.	Property has not been listed during a listing period.
b.	A taxpayer made a substantial understatement of listed property.
c.	Property was granted an exemption or exclusion and the property does not qualify for an exemption or exclusion.
(4)	The phrase ‘substantial understatement' means the omission of a material portion of the value, quantity, or other measurement of taxable property; the determination of materiality in each case shall be made by the assessor, subject to the taxpayer's right to review of the determination by the county board of equalization and review or board of commissioners and appeal to the Property Tax Commission."
Sec. 4.  This act is effective upon ratification.