Limit on annual special tax increases for residential parcels

(a) The special tax on a residential parcel in a district shall be levied in a manner which complies with the following: (1) A maximum annual special tax amount for the residential parcel shall be established and expressed in dollars; (2) The special tax amount for the residential parcel shall not be increased by more than 2 percent annually, unless a greater increase is required because of a change in use, development, improvement, subdivision, or consolidation of the parcel; and (3) The special tax amount for the residential parcel in any year shall not be more than that established or calculated under subdivision (1) or (2), unless a higher amount is warranted because of a change in use, development, improvement, subdivision, or consolidation of the parcel. If the change in use, development, improvement, subdivision, or consolidation of the parcel warrants a higher special tax amount for a year than that established or calculated under subdivision (1) or (2), then the higher amount shall be collected for that year. After that year, however, the special tax amount shall not be increased by more than 2 percent annually, unless the parcel is again subject to a change in use, development, improvement, subdivision, or consolidation. This subsection shall be included in the applicable ordinance of formation. (b) For the purposes of this section, “residential parcel” means a parcel classified as residential for real property tax purposes.