A bill that would limit annual increases in the assessed value of property for tax purposes overwhelmingly passed the Alabama House of Representatives on Tuesday.

HB73, by Rep. Phillip Pettus, a Republican from Lauderdale County, would cap the increase in assessed value for residential, commercial, farm, and timber property at 7% as compared to the previous year.

“Today, there is no cap,” Pettus said. “They can raise your property taxes to any value they want to. Lately it’s been just going skyrocketing, and that’s the reason I brought this bill.”

The caps would take effect Oct. 1, 2024 and expire Oct. 1, 2027.

Rep. Jim Hill, R-Moody, disagreed with the assertion by Pettus that tax assessors can raise property values to any level they want. Hill noted that taxpayers who disagree with the assessment of their property’s value can appeal to their county’s board of equalization. If they are still not satisfied, they can appeal the board of equalization’s decision in circuit court.

Hill said he was concerned about the impact of Pettus’ bill on revenues for cities, counties, and schools. He proposed an amendment to make the bill apply only to revenue that goes to the state. Pettus opposed the amendment and the House rejected it by a vote of 69-19.

A fiscal note estimating how much HB73 would reduce revenues was not immediately available. A fiscal note on an earlier version of the bill, when the cap was 5% instead of 7%, estimated it would reduce tax revenues by $58 million, an estimate based on the average annual growth in assessed values for Class II (commercial) and Class III (residential, agricultural, and forest) properties between 2019 and 2022.

Education groups, including the Alabama Association of School Boards, have raised concerns about the property tax bill and about the cumulative effect of other bills that will divert money from the Education Trust Fund.

One of those is the CHOOSE Act, already signed into law by Gov. Kay Ivey, which will require the Legislature to appropriate at least $100 million a year for education savings accounts that parents can use to pay up to $7,000 a year for private school and other education-related expenses.

Other pending bills that would reduce money going to the ETF include a bill to repeal the state sales tax on baby products and feminine hygiene products, a bill to provide two sales tax holiday weekends every year on camping, hunting, boating, and outdoor supplies, and a bill to allow up to $80 million in tax credits for donations to rural hospitals.

The House passed HB73 by a vote of 97-1. Rep. Berry Forte, D-Eufaula, cast the only vote against it. The bill moves to the Senate.