While overall there is little activity in the General Assembly, the House Revenue Committee is meeting today for a hearing on an interesting piece of property tax legislation. The hearing is on HB4363, which would create the Vacancy Fraud Act. According to the text of the bill, “Some owners of vacant properties do not actively seek tenants, yet continue to receive property tax relief for the term of the property’s vacancy. This practice has led to neighborhoods blighted with vacant commercial or industrial properties. The General Assembly finds that this practice is against public policy, burdens homeowners and actively operating businesses, and lessens taxing districts’ tax base.”
Under the Vacancy Fraud Act, any taxing body would be allowed to file a complaint with the county board of review alleging that a property owner is not actively attempting to lease, sell, or alter the vacant property. The Act also sets forth several procedural and evidentiary standards for the hearing of these complaints. The penalties for those violating the Act include prohibiting any future vacancy relief and requiring payment of three times the amount of back taxes owed for the vacancy relief received, plus interest. Those who have been penalized twice under the Act within a five-year period could also be required to pay a penalty of 25% of the amount of back taxes paid.
Given the large number of commercial and industrial property owners who seek reductions in their assessments based on vacancy, this legislation has the potential to significantly impact the practices at county boards of review throughout the State. Should this legislation eventually pass, it would give school districts and other public bodies another tool to protect their tax bases.