Committee hears bill to delay tax increases on home improvements for four years

State Representative Carolyn Caton (District 33) presented House Bill 2,923 to the Special Committee on Tax Reform, proposing a temporary exemption from increases in property taxes for homeowners who make qualifying improvements.

Under the bill as explained by Caton, a homeowner who files a homestead improvement exemption intent form before a building permit is issued (or within 60 days of starting work when no permit is required) could be exempt from any tax increase attributable to that improvement for up to four consecutive years. The bill specifies a minimum exempted improvement of $7,500 and a cap of $75,000; for catastrophic rebuilds the testimony described higher caps (see below). A homeowner must file a completion form with supporting documentation within 180 days after finishing the work.

Supporters told the committee the measure aims to remove a disincentive in the current assessment code that discourages repairs and post-disaster rebuilding. Sean Smith, a Jackson County legislator, said the bill would reduce ambiguity about what constitutes "new construction" and could turn field visits by assessors into a more-positive interaction with homeowners. Preston Smith, a Jackson County taxpayer who said he has studied local assessments, told the committee the bill would protect homeowners after tornadoes or floods and said the draft includes safeguards to keep assessors from immediately reaccelerating values when the exemption ends.

Preston Smith said the bill treats catastrophic rebuilds differently: in his testimony he said the exemption cap under catastrophic loss would be $75,000 for insured dwellings and $200,000 for uninsured dwellings, and that the exemption would run for four consecutive years and could carry to a new owner if the property is sold while the exemption remains in effect. He also said the draft shifts the burden of proof for denial to the assessor when adequate preapproval documentation is provided.

Committee members pressed the sponsor and witnesses on several points. Members asked whether assessor or collector organizations had reviewed the bill; Caton said she had not yet received feedback and planned to meet with them. Lawmakers also sought clarity on whether routine maintenance would be eligible, how the bill treats properties with multiple dwellings, and whether qualifying improvements could cause seniors to lose existing property tax freezes. Witnesses and the sponsor acknowledged gray areas—particularly the boundary between "routine maintenance" and "improvement"—and recommended follow-up with assessors and local taxing districts.

A member noted the bill’s fiscal note appeared to report "no impact," and several lawmakers said they wanted a clearer fiscal analysis and confirmation about how and whether the state would reimburse local taxing jurisdictions for any revenue loss; the sponsor said the bill language allows for state reimbursement but that appropriations would be required and the fiscal answer depends on legislative action.

No witnesses identified themselves in opposition during the hearing; the sponsor said she planned to meet with school district leaders and other local officials for feedback.

The committee concluded the public hearing on HB 2,923 without taking a committee vote. The sponsor and several members said additional work with assessors and clearer fiscal estimates would be conducted before the bill advances.