On Thursday, March 8^th, the House unanimously passed a bill that addresses the process used for commercial property valuations.

SB 182, sponsored by Senator Phil Williams (R–Rainbow City), was filed as a response to taxpayer appeals of the taxable value of commercial property, a value that is fixed by the Board of Equalization. In so-called “dark store” challenges, property owners argue that the value of their property should be the value of the building as if it were not a going concern, but rather a “dark store.” The argument for this valuation is that the buildings cannot be used for anything but the specific business, or company, for which the building was designed and built. In other words, once a building has served as a Lowe’s or Home Depot, the building is useless for anything else, diminishing the value of the building.

Originally, the bill sought to address this issue by prohibiting the property owner from presenting certain comparable sales as evidence at the taxpayer appeal. The Alabama REALTORS® worked with stakeholders and the bill sponsor to amend the bill so that it did not unduly impact smaller commercial property owners. The amendment protects these small business owners, who may not have the resources available to big, retail stores, by allowing the comparable sales to be presented but requiring certain other evidence to accompany the comparable sale. The accompanying evidence includes whether the comparable sale was occupied or unoccupied when sold and whether the comparable property was subject to use, deed or lease transactions when sold.

According to the Legislative Services Agency, SB 182 could increase ad valorem receipts to the Public School Fund, the State General Fund, the Alabama Historical Commission, the Alabama Veteran's Assistance Fund, and county and municipal governments by an undetermined amount dependent on the number of comparable sales or leases of vacant or deed restricted properties.

SB 182 now awaits the governor’s signature.