Alabama toughens property protection

The Alabama Legislature, meeting late this summer in a special session, passed a bill that protects private property rights. Legislators also approved the state's general fund budget and approved a constitutional amendment that requires city and county school systems to have a minimum of 10 mills of property taxes for public education.

A recent ruling by the U.S. Supreme Court could have given cities wide power to condemn property for private development in order to generate tax revenue. The original bill introduced in the special session by Gov. Bob Riley to remedy the adverse effects of the court ruling still would have allowed the state to condemn property for non-governmental purposes, such as industrial development. However, a call to action from the Alabama Farmers Federation resulted in more than 1,400 calls in one day to legislators, resulting in a bill that goes even further to protect property rights.

“A dramatic change came within 24 hours that resulted in amendments to significantly strengthen the original bill,” says Federation Executive Director Mike Kilgore. “This would not have happened without the rapid response of the leaders of our organization at the local level who took time to call their legislators.”

The federation, says Kilgore, was successful in making the restrictions include the state as well as counties, and added “industrial development” to the restrictive language. As passed, the bill prohibits the state, county and municipalities from condemning property for non-governmental retail, office, commercial, residential, or industrial development.

Federation Governmental Affairs Director Freddie Patterson says a constitutional amendment will be introduced in the regular session of the legislature next year to give the bill more permanent footing. “The groundswell of grassroots support generated by our organization has cemented the support of many legislators for future passage of the constitutional amendment,” he says.

The new $1.55 billion general fund budget passed by the Alabama Legislature includes a 6 percent pay raise for state employees as well as funding for several agricultural projects, including $550,000 that will be used to match federal funds for the Farm and Ranch Lands Protection Program.

In the Alabama Department of Agriculture and Industries budget, legislators approved $25,000 to promote rabbit production in Alabama, $25,000 for the promotion of inland shrimp production, and $200,000 for fire ant control. The Alabama Department of Environmental Management budget included $350,000 for the regulation of Concentrated Animal Feeding Operations in Alabama.

Voters will decide the 10-mill property tax constitutional amendment on Nov. 7, 2006 — the date of the next general election. Currently, 24 county school systems and six city systems have less than 10 mills of property tax. County school systems affected are Autauga, Barbour, Bibb, Blount, Chilton, Conecuh, Covington, Crenshaw, Cullman, Dale, Elmore, Fayette, Hale, Houston, Jackson, Lamar, Lawrence, Limestone, Marengo, Marion, Montgomery, Pike, Tuscaloosa and Walker. City school systems affected are Andalusia, Arab, Athens, Daleville, Dothan and Linden.

Other states

In other state legislative news from the Southeast, a state and local sales tax exemption for fuel used to operate irrigation systems exclusively used for the irrigation of crops went into effect in Georgia on July 1. The exemption was outlined in House Bill 487 passed by the 2005 Georgia General Assembly and signed into law by Gov. Sonny Perdue. Previously, the sales tax exemption only applied to electricity used to operate the irrigation system.

To purchase fuel for irrigation purposes tax exempt, farmers must provide their fuel distributor with a properly executed Agricultural Certificate of Exemption, Form ST-A1. Fuel delivered and stored in a tank that will be used for both taxable and exempt farm use may qualify for a partial exemption when the farmer provides a good faith estimate of the amount of fuel that will be used exclusively to operate a farm irrigation system. The good faith estimate should be noted on the Agricultural Certificate of Exemption, Form ST-A1, and given to the fuel distributor at the time of sale.

The distributor's acceptance of a properly executed Form ST-A1 shall be deemed to be in good faith and the quantity of exempt fuel indicated on the form will qualify for the exemption. The fuel distributor must separately invoice the taxable and exempt fuel based on the estimate provided on Form ST-A1. The farmer will be liable for any tax, penalty and interest due on any fuel determined to be taxable as a result of an incorrect estimate or improperly executed form.

For more information or to obtain the Agricultural Certificate of Exemption, contact the Tax Law and Policy Section of the Georgia Department of Revenue at (404) 417-6649.

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