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Alert: Changes On The Horizon For Philadelphia Board of Revision of Taxes
01.13.10
The Ordinance and Ballot Referendum
Shall the Board of Revision of Taxes be abolished, and its powers, functions and duties be reassigned to a new Office of Property Assessment (with respect to the making of assessments) and to a Board of Property Assessment Appeals (with respect to appeals from such assessments), with the members of the Board appointed from nominations made by a Board of Property Assessment Appeals Nominating Panel?
If the ballot referendum is approved, the BRT would cease to exist as of September 30, 2010, and, effective October 1, 2010, all powers, functions and duties previously performed by the BRT would be transferred to one of the two newly created agencies.
Structure and Management of the New Agencies
The Office of Property Assessment would be part of the Executive branch of city government with a Chief Assessment Officer appointed by the Mayor to serve a four year term beginning July 1, 2010. In contrast with present requirements, this Ordinance proposes certain minimum professional credentials for the Chief Assessment Officer. Specifically, the Chief Assessment Officer would need at least ten years of experience in the management of property valuation, and would be required to either be an International Association of Assessing Officers (IAAO) Certified Assessment Evaluator (CAE) or hold the highest-ranking appraiser’s license offered in the Commonwealth.
The Board of Property Assessment Appeals (“Board of Appeals” or “Board”) would consist of seven members, two of whom would be certified real estate appraisers or assessors with at least ten years’ experience in this field, two of whom would be practicing attorneys with at least ten years’ experience in the area of residential or commercial valuation, and at least one of whom must be a property owner in Philadelphia. The members would be appointed by the Mayor from among nominations submitted by a newly created Board of Property Assessment Appeals Nominating Panel (“Nominating Panel”). City Council would have final approval of the Mayor’s appointments. This Ordinance would also significantly reduce the annual compensation of members of the Board of Appeals to $50,000 for the Chair, $45,000 for the Secretary, and $150 per hearing day attended (up to a maximum of $40,000 per year) for each remaining member.
The Nominating Panel would consist of seven members with one member each appointed by the Mayor, the Council President, the Philadelphia Bar Association, the Building Industry Association of Philadelphia, the Housing Association of Delaware Valley, the Greater Philadelphia Association of Realtors, and the Southeast Chapter of the Assessors’ Association of Pennsylvania.
Each of the new agencies would also be required to promulgate regulations governing its activities and procedures.
What These Changes Would Mean for Property Owners
This Ordinance contains a provision to transfer existing BRT employees to one of the two new agencies based on the functions each employee currently performs. This means that, most likely, the BRT employee currently charged with assessing the value of your property will be the same under the new system.
Although this Ordinance does not directly address the much publicized “Actual Value Initiative” that the BRT has been working toward, it would require annual reassessment for all properties through a “Computer Assisted Mass Appraisal” system (“CAMA”). This does not necessarily mean that a particular property would see its assessment increase each year, but that its assessment would be reviewed annually to make sure that it is current. This is, in fact, already a requirement of the BRT under state statute, but one that has not been carried out with much consistency and, as a result, has led to many of the problems with non-uniformity of property tax assessments throughout the city.
With regard to assessment appeals, the new Board of Appeals would begin hearing cases for the 2011 tax year. Appeals could be heard by one or more members of the Board, or by a hearing officer appointed by the Board. The results of each appeal would be posted online within seven days of the Board’s decision.
Conclusion
While this Ordinance, if approved by the electorate, would lead to significant changes in the administration of the property tax assessment system in Philadelphia, it does not directly address the issue of non-uniformity of assessments throughout the city. To complete the overhaul of the assessment system in Philadelphia, property owners should expect to see subsequent legislation proposed to better address valuation uniformity and millage rates. Finally, this Ordinance does not propose any changes to the tax abatement programs that are currently in place throughout the city but would make the Office of Property Assessment responsible for reviewing applications for tax abatement and exemption.
Philadelphia City Council Passes Ordinance Proposing
Abolition of BRT
Abolition of BRT
The Ordinance and Ballot Referendum
On December 17, 2009, Philadelphia City Council voted 15-2 in favor of Bill No. 090706 which proposes to abolish the Board of Revision of Taxes (“BRT”) and establish, in its place, two separate agencies to perform the property tax assessment and appeal functions in Philadelphia. This Ordinance will take effect only if approved by the electorate in a ballot referendum to take place in the next primary election on May 18, 2010. The following question will be placed on the May 18, 2010 ballot to be answered “Yes” or “No” by the electors:
Shall the Board of Revision of Taxes be abolished, and its powers, functions and duties be reassigned to a new Office of Property Assessment (with respect to the making of assessments) and to a Board of Property Assessment Appeals (with respect to appeals from such assessments), with the members of the Board appointed from nominations made by a Board of Property Assessment Appeals Nominating Panel?
If the ballot referendum is approved, the BRT would cease to exist as of September 30, 2010, and, effective October 1, 2010, all powers, functions and duties previously performed by the BRT would be transferred to one of the two newly created agencies.
Structure and Management of the New Agencies
The Office of Property Assessment would be part of the Executive branch of city government with a Chief Assessment Officer appointed by the Mayor to serve a four year term beginning July 1, 2010. In contrast with present requirements, this Ordinance proposes certain minimum professional credentials for the Chief Assessment Officer. Specifically, the Chief Assessment Officer would need at least ten years of experience in the management of property valuation, and would be required to either be an International Association of Assessing Officers (IAAO) Certified Assessment Evaluator (CAE) or hold the highest-ranking appraiser’s license offered in the Commonwealth.
The Board of Property Assessment Appeals (“Board of Appeals” or “Board”) would consist of seven members, two of whom would be certified real estate appraisers or assessors with at least ten years’ experience in this field, two of whom would be practicing attorneys with at least ten years’ experience in the area of residential or commercial valuation, and at least one of whom must be a property owner in Philadelphia. The members would be appointed by the Mayor from among nominations submitted by a newly created Board of Property Assessment Appeals Nominating Panel (“Nominating Panel”). City Council would have final approval of the Mayor’s appointments. This Ordinance would also significantly reduce the annual compensation of members of the Board of Appeals to $50,000 for the Chair, $45,000 for the Secretary, and $150 per hearing day attended (up to a maximum of $40,000 per year) for each remaining member.
The Nominating Panel would consist of seven members with one member each appointed by the Mayor, the Council President, the Philadelphia Bar Association, the Building Industry Association of Philadelphia, the Housing Association of Delaware Valley, the Greater Philadelphia Association of Realtors, and the Southeast Chapter of the Assessors’ Association of Pennsylvania.
Each of the new agencies would also be required to promulgate regulations governing its activities and procedures.
What These Changes Would Mean for Property Owners
This Ordinance contains a provision to transfer existing BRT employees to one of the two new agencies based on the functions each employee currently performs. This means that, most likely, the BRT employee currently charged with assessing the value of your property will be the same under the new system.
Although this Ordinance does not directly address the much publicized “Actual Value Initiative” that the BRT has been working toward, it would require annual reassessment for all properties through a “Computer Assisted Mass Appraisal” system (“CAMA”). This does not necessarily mean that a particular property would see its assessment increase each year, but that its assessment would be reviewed annually to make sure that it is current. This is, in fact, already a requirement of the BRT under state statute, but one that has not been carried out with much consistency and, as a result, has led to many of the problems with non-uniformity of property tax assessments throughout the city.
With regard to assessment appeals, the new Board of Appeals would begin hearing cases for the 2011 tax year. Appeals could be heard by one or more members of the Board, or by a hearing officer appointed by the Board. The results of each appeal would be posted online within seven days of the Board’s decision.
Conclusion
While this Ordinance, if approved by the electorate, would lead to significant changes in the administration of the property tax assessment system in Philadelphia, it does not directly address the issue of non-uniformity of assessments throughout the city. To complete the overhaul of the assessment system in Philadelphia, property owners should expect to see subsequent legislation proposed to better address valuation uniformity and millage rates. Finally, this Ordinance does not propose any changes to the tax abatement programs that are currently in place throughout the city but would make the Office of Property Assessment responsible for reviewing applications for tax abatement and exemption.
For more information regarding property tax assessment, appeal, abatement and non-profit exemption matters, please contact: Carl S. Primavera (215.569.1663 or cprimavera@klehr.com) or Nicole R. Faux (215.569.4539 or nfaux@klehr.com).
