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<br />
<br /> "At the regular council meeting of May t4, 1974, you referred to me the general
<br />question of the legality of the proposed "freeze" of taxes for senior citizens. A related
<br />question was propounded which dealt with the issue of when the tax freeze would be ef-
<br />fective. This opinion ms submitted in r~sponse to council's assignment.
<br />
<br /> The portion of the tax relief ordinance which gave rise to the issues at hand is the
<br />following paragraph:
<br />
<br /> 'Furthermore, persons qualifying for and~claiming exemptions shall have exempted
<br />that additional portion of the real estate tax levied on the qualifying dwelling and land
<br />which is attributable to an increase in assessment, assessment ratio and/or tax rate
<br />taking place after January t, 1974. The amount of real estate or any portion thereof
<br />levied on the qualifying dwelling and land prior to January i, 1974 shall be exempted only
<br />according to the above schedule.'
<br />
<br /> The first issue to be confronted is: 'At what level does the tax freeze become ef-
<br />fective when it goes into operation?' Under the present wording, a senior citizen who
<br />is eligible for tax relief wilt have his assessment, assessment ratio and tax rate frozen
<br />at the level prevailing on January 1, 1974. Thus, if a senior citizen becomes eligible
<br />for tax relief in 1975 or any subsequent year, his basic tax liability will be computed
<br />according to the assessment and rate in effect on January l, 1974. Even if the assessment
<br />and tax rate may be higher in a subsequent year when a senior citizen becomes eligible
<br />for tax relief, his taxes would not be f~Ozen at that level, but would revert to the level
<br />of January 1, 1974.
<br />
<br /> A brief review of the language used in the current proposed paragraFh demonstrates
<br />why this is true. The paragraph states that eligible persons
<br />
<br />'...-shall have exempted that additional portion of the real estate tax
<br />levied on the qualifying dwelling and lan~ which is attributable to an
<br />increase in assessment, assessment ratio.anJ~6-~ tax rate taking place
<br />a--ir, ter January ~,1974.' (Emphasis
<br />
<br />Therefore, any increase in rate, assessment or ratio occurring between January 1, 1974
<br />and the date eligibility attached would be negated. I have been informally advised that
<br />the original intent of this ordinance was to freeze taxes at the point in time at which
<br />the citizen becomes eligible for such relief. Therefore, I have tedrafted the paragraph
<br />in question and attached a copy of such draft to this letter as Exhibit A. As worded tn
<br />the redraft, the ordinance is effective to-freeze assessment, ratio and tax rate as of
<br />the time eligibility for relief first attaches. The redrafted paragraph, if adopted, woul(
<br />probably result in less loss of revenue to the city, but ft~would be more difficult to
<br />administer. Finally, a tax freeze at the point of eligibility could result in multiple
<br />assessment levels, multipel assessment ratios and multiple tax rates within the city.
<br />
<br /> The more serious question posed by council's inquiry in this matter is whether a
<br />freeze of taxes for certain elderly persons is both constitutional and valid. The
<br />Constitution of Virginia (1971), Article X, Section 6(b), provides basic authority for
<br />exemption or deferral of taxes for certain elderly persons. The statutory law exercises
<br />this authority by granting localities the right to pass such tax exemption ordinance;
<br />this is accomplished by §58-760.1 of the~Code of Virgigia (1950), as amended. The
<br />Constitution and'the statute speak of exemption or deferral of taxes, but neither source
<br />directly addresses the question of a tax freeze.
<br />
<br /> In order to resolve this question, it is necessary to construe the tax exemption laws
<br />in the light of the entire structure of taxation in Virginia, applying recognized rules
<br />of legislative construction. One of the most well settled and clearly established rules
<br />of interpretation is that taxation of property is the rule, and exemption from taxation is
<br />the exception, thus requiring a strict and narrow interpretation of all tax exemption
<br />statues. Another principle to be kept in mind is the constitutional requirement for uni-
<br />formity of taxation. The Constitution of Virginia (1971), states, in Article X, Section 1:
<br />
<br />'Ail taxes shall be levied and collected under general laws and shall be uniform
<br />upon the same class of subject's within the territorial limits of the authority
<br />TerMing the tax ...'
<br />
<br />The concept of uniformity in taxation is probably the single most important principle
<br />which taxing authorities and officials must observe. The Virginia Supreme Court commented
<br />upon this principle in the case of Skyline Swannanoa v.Nelson, 186 Va. 878, 881, 47 S.E.
<br />2d 437 (1947); the court stated:
<br />
<br />'Sections 168 and 169 of the Constitution of Virginia [Article X, Sections 1 and 2
<br />of the 1971 Constitution] provide that all real'estate and tangible personal property
<br />shall be assessed at its fair market value and that all taxes shall be unfZorm
<br />upon the same class of subjects within the territorial limits of the-authority
<br />levying the taxes. The two sections must be construed together. The dominant
<br />pqrpose of these provisions is to distribute the burden of taxation, so a~-a~- as
<br />is p~-g~t~al, eve.~l¥ and equi-~aB-~y. If it is~-q-~p~a% or impossible to -e~orce
<br />~-~th the standar~ t--~-~e'~a--~/-6~nd the standard of uniformity and equality, the
<br />latter provision is to be preferred as the just and ultimate end to be obtained.'
<br />(Emphasis added)
<br />
<br />In a more recent case, the. Virginia Supreme Court stated:
<br />
<br />'The courts, in trying to resolve this problem [of~the inexact nature of the
<br />science of assessment]while recognizing the general custom of undervaluing
<br />
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