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Show For Against O O - $6 Official Ballot Title: Shall Article XIII, Section 2 be amended to allow farm equipment and farm machinery as defined by the Legislature to be exempt from property tax; and to provide for implementation of the exemption over a Proposition No. 2 period of time as provided Legislature? by the PROPERTY TAX EXEMPTION FOR FARM EQUIPMENT AND FARM MACHINERY Vote cast by the members of the 1986 Legislature on final passage: HOLSE (75 members): Yeas, 50; Nays, 21; Absent or not voting, 4. SENATE (29 members): Yeas, 21; Nays, 6; Absent or not voting, 2. - rrrSTr 5 wrr ' gryg 6 IMPARTIAL ANALYSIS Proposal Effective Date The state constitution provides for the taxation of property. Any exemption from the property tax must also be included in the constitution. Present agricultural exemptions from the property tax If approved by the voters, this amendment would take effect on January 1, 1987. However, since the amendment allows the Legislature to implement the tax exemption over a period of time, the exemption may not be fully implemented during the 1987 tax year. include: irrigation equipment, powerplants and electrical equipment used to provide power for irrigation, and livestock. Farmers now pay personal property taxes, like the taxes paid on cars or industrial machinery, on all farm equipment and machinery. If Proposition 2 passes, farm equipment and machinery as defined by the Legislature would be exempt from property tax. If it fails, farmers would continue to pay taxes on their farm equipment and machinery. The proposed amendment allows the Legislature to apply the exemption for farm equipment and machinery gradually. Fiscal Impact The annual loss in property tax revenues from this amendment will depend on the schedule of implementation adopted by the Legislature. Based on current State Tax Commission definitions for farm equipment and farm machinery, it is estimated that this exemption, when fully implemented, would reduce property tax revenue for local governments and school districts by $1 .75 million to $2.0 million per year. Page 17 |