HB 68 — Real property; effect on rate when assessment results in tax increase, consideration of inflation.

+OFFERED 2027FOR SESSIONCONSIDERATION 1/27/2026 + INTRODUCED+ + + + 26101665D+ I+ + HOUSE BILL NO.

68 Offered+ January+ 14,AMENDMENT 2026IN NTHE NATURE OF A SUBSTITUTE + + (Proposed by the House Committee on Finance + on ________________) + + (Patron Prior to Substitute—Delegate McNamara) + A BILL to amend and reenact §§ 58.1-3321 and 58.1-3330 of the Code of Virginia, relating to local taxation of real property;

T ————— R Patron—McNamara O ————— D Referred to Committee on Finance ————— U Be it enacted by the General Assembly of Virginia:

C § 58.1-3321.

E A.

When any annual assessment, biennial assessment, or general reassessment of real property by a county, city, or town would result in an increase of one percent or more in the total real property tax levied, such county, city, or town shall reduce its rate of levy for the forthcoming tax year so as to cause such rate of levy to produce no more than 101 percent of the previous year's real property tax levies after reducingadjusting the total of the value of the real property assessed valueby excluding any increase in the total that is attributable to inflation by referring to the greater of (i) the change in the United States Average Consumer Price Index for all items, all urban consumers (CPI-U), as published by the Bureau of Labor Statistics for the U.S.

AnIf additionalreassessments assessmentare ornot reassessmentperformed dueannually, toinflation the construction of new or other improvements, including those improvements and changes set forth in § 58.1-3285, to the property shall not be antaken annualinto assessmentaccount orby generalcombining reassessment within the meaningrate of thisinflation section,for noreach shallfiscal theyear assessedsince valuethe oflast suchassessment improvementswas Hperformed, Bas becalculated includedby in calculating the newCPI-U. tax levy for purposes of this section.

SpecialAn leviesadditional assessment or reassessment due to the construction of new or other improvements, including those improvements and changes set forth in § 58.1-3285, to the property shall not be included8inan anyannual calculationsassessment providedor general reassessment within the meaning of this section, nor shall the assessed value of such improvements be included in calculating the new tax levy for underpurposes of this section.

Special levies shall not be included in any calculations provided for under this section.

Notice of any public hearing held pursuant to this section shall be given at least seven days before the DRAFT OFFERED FOR CONSIDERATION 1/27/2026 date of such hearing by the publication of a notice in (i) at least one newspaper of general circulation in such county or city and (ii) a prominent public location at which notices are regularly posted in the building where the governing body of the county, city, or town regularly conducts its business.

Additionally, in a county, city, or town that conducts its reassessment more than once every four years, the notice for any public hearing held pursuant to this section shall be published on a different day and in a different notice from any notice :published for the annual budget hearing.

35Any publishedsuch fornotice shall be at least the annualsize budgetof hearing.one-eighth page of a standard size or a tabloid size newspaper, and the headline in the advertisement shall be in a type no smaller than 18-point.

AnyThe such notice shalldescribed bein atclause least(i) theshall sizenot ofbe one-eighthplaced pagein ofthat aportion, 36if standardany, sizeof or a tabloid size newspaper, and the headlinenewspaper inreserved thefor advertisementlegal shallnotices beand inclassified aadvertisements. type no smaller 37 than 18-point.

The notice described in clauseclauses (i) shalland not(ii) shall be placed in thatthe portion,following ifform any,and ofcontain the newspaperfollowing 38information, reservedin foraddition legalto noticessuch andother classifiedinformation advertisements.as the local governing body may elect to include:

The notice described in clauses (i) and (ii) shall be in 39 the following form and contain the following information, in addition to such other information as the local governing body may elect to include:

HB68DRAFT 2OFFERED ofFOR 2CONSIDERATION 1/27/2026 D.

In addition, whether or not the tax rate applicable to the new assessed value has been established, the notice DRAFT OFFERED FOR CONSIDERATION 1/27/2026 shall set out the tax rates for the immediately prior two tax years, the total amount of the new tax levy, based on the current tax rate at the time the notices are prepared, and the amounts of the total tax levies for the immediately prior two tax years, based on the final tax rates for those tax years multiplied by the final assessed values of land and improvements for those tax years, and the percentage changes in the new tax levy from the tax levies in the immediately prior two tax years.

Department of Labor, as described in subsection A of § 58.1-3321 and excluding additional assessments due to new construction or improvements to real property, would result in an increase of one percent or more in the total real property tax levied in the locality, the notice shall set forth the tax rate that would levy the same amount of real estate tax as the previous year when multiplied by the new total assessed value of real estate, excluding additional assessments due to new construction or improvements to real property.