HJR H, passed by the House and Senate on the 18th of April, 1991, placed on the 1992 general election ballot a constitutional amendment that would accomplish the following:

  1. Provide an exception to the "uniformity clause" in Article IX, section 3, which currently requires that the legislature provide for "uniform general ad valorem taxation."

    Under the exception, the state equalized value of "each parcel of homestead property" would not increase each year by more than the rate of inflation or five percent, whichever is less, unless the parcel is sold. "Homestead" is currently defined in the income tax code as, generally, an owner-occupied or rented dwelling.[14] This provision would effectively change the method of assessing homestead property from a market-value system to an acquisition-value system.

  2. Modify the current limitation on property tax increases caused by assessment growth.

    The constitution currently limits tax increases caused by assessment growth on existing property to no more than the rate of inflation over the past year. Assessment increases greater than the rate of inflation force a reduction in the millage rate, so the total tax bill on existing property grows only at the rate of inflation. The reduction in the millage rate is known as a "Headlee rollback."

    The proposal would modify this such that:

    (i) In 1993, the allowable increase in property tax revenue would be the "combined increase in the general price level in 1991 and 1992;" and

    (ii) Beginning in 1993, the "Headlee rollback" calculation would be done separately for two categories of property: residential and agricultural, and all other classes, resulting in two separate millage rates.

    The complete text of the proposal is contained in Appendix V.