2019 - 2020 LEGISLATURE
ASSEMBLY AMENDMENT 1,
TO ASSEMBLY BILL 901
February 17, 2020 - Offered by Representative Petersen.
70.32 (1) of the statutes is amended to read:
Real property shall be valued by the assessor in the manner specified 7
in the Wisconsin property assessment manual provided under s. 73.03 (2a) from 8
actual view or from the best information that the assessor can practicably obtain, at 9
the full value which could ordinarily be obtained therefor at private sale. In Subject
10to subs. (1b) and (1c), in
determining the value, the assessor shall consider recent 11
arm's-length sales of the property to be assessed if according to professionally 12
acceptable appraisal practices those sales conform to recent arm's-length sales of 13
reasonably comparable property; recent arm's-length sales of reasonably
comparable property; and all factors that, according to professionally acceptable 2
appraisal practices, affect the value of the property to be assessed.
70.32 (1b) and (1c) of the statutes are created to read:
For purposes of sub. (1), property may not be considered reasonably 5
comparable to the property being assessed under any of the following circumstances:
(a) Either property has physical deterioration due to extended vacancy or is 7
otherwise physically deteriorated and the other property does not have physical 8
deterioration due to extended vacancy or is not similarly otherwise physically 9
(b) The comparable property is subject to a deed restriction, placed by the seller 11
at or before the time of sale, that prohibits any use of the property that is reasonably 12
comparable to the highest and best use of the property being assessed and the 13
property being assessed is not subject to a similar restriction, unless credible 14
adjustment can be made to account for the difference between the properties.
(c) The property being assessed is subject to a deed restriction that prohibits 16
any use of the property that is reasonably comparable to the highest and best use of 17
the comparable property and the comparable property is not subject to a similar 18
restriction, unless credible adjustment can be made to account for the difference 19
between the properties.
(a) In this subsection, “operating lease” means a lease that does not have 21
any of the following characteristics:
1. Is entered into as part of or connected to a sale-leaseback transaction.
2. Has a purpose of facilitating or financing the construction, purchase, 24
financing, or acquisition of the leased property or other tangible or intangible asset.
(b) In valuing property under sub. (1), the assessor shall value the fee simple 2
estate as if unencumbered but subject to any effect from the exercise of police powers 3
or other governmental action and shall comply with all of the following:
1. If the property being assessed is subject to one or more operating leases, the 5
assessor may consider the lease provisions and rental income generated by the 6
property only to the extent that the rental income does not exceed the rental income 7
that would be expected if the rents were consistent with local market rents for 8
reasonably comparable properties and the overall lease provisions, including the 9
creditworthiness of the tenants, are not more favorable to the property's owner than 10
is typical in the local market.
2. If the property being assessed is subject to one or more operating leases, the 12
assessor may not rely on the rental income generated by the property or the lease 13
provisions unless the assessor has actual knowledge of the material terms of all the 14
operating leases and the creditworthiness of all the tenants as of the assessment 15
3. If the property being assessed is subject to a lease that is not an operating 17
lease, the assessor may not rely on the rental income generated by the property or 18
the lease provisions.
4. The assessor may rely on the sale of reasonably comparable property that 20
is subject to one or more operating leases only if all of the following conditions are 21
a. At the time of the sale of the reasonably comparable property, the rental 23
income generated by the reasonably comparable property did not exceed the rental 24
income that would be expected if the rents were consistent with market rents for 25
reasonably comparable properties in that property's local market.
b. At the time of the sale of the reasonably comparable property, the overall 2
lease provisions, including the creditworthiness of the tenants, are not more 3
favorable to the reasonably comparable property's owner than is typical in that 4
property's local market.
c. The assessor has actual knowledge of the material terms of all the operating 6
leases and the creditworthiness of all the tenants as of the date of the sale of the 7
reasonably comparable property.
5. The assessor may not rely on the sale of reasonably comparable property that 9
is subject to a lease that is not an operating lease.”.
The treatment of s. 70.32 (1), (1b), and (1c) first applies to the property tax 13
assessments as of January 1, 2021.”.