OLR Bill Analysis

sHB 5399

AN ACT CONCERNING STATE REIMBURSEMENT FOR TAX ABATEMENTS AND PAYMENTS IN LIEU OF TAXES.

SUMMARY:

This bill gives financial relief to certain housing providers on whose behalf the Department of Housing (DOH) made payments to municipalities in FY 15. It (1) establishes a two-year real property tax abatement for certain privately-owned low- or moderate-income housing developments and (2) extends by two years the requirement that municipalities waive certain payments due from certain state-financed housing authorities.

EFFECTIVE DATE: Upon passage

TAX ABATEMENT FOR PRIVATELY-OWNED DEVELOPMENTS

Existing law authorizes (1) municipalities to provide tax abatements to privately-owned low- or moderate-income housing developments and (2) DOH to reimburse municipalities for some of this revenue loss as part of its Tax Abatement Subsidy Program.

The bill requires, in FY 17 and FY 18, municipalities to abate the taxes on property that received an abatement in FY 15. The FY 17 and FY 18 abatements must (1) have the same dollar value as the FY 15 abatement and (2) be reduced by the amount of any federal funds made available to the development for such taxes. Under the bill, municipalities need not abate taxes owed by a development that no longer qualifies as low- or moderate-income housing.

WAIVER OF PAYMENTS DUE FROM STATE-FINANCED HOUSING AUTHORITIES

Existing law requires tax-exempt state-financed housing authorities for moderate rental housing projects to make payments to municipalities in lieu of paying property taxes, special benefit assessments, and sewer system use charges. The law authorizes DOH to make payments on authorities' behalf as part of its Payment in Lieu of Taxes Subsidy Program.

PA 15-5, June Special Session ( 495) prohibits municipalities from requiring an authority to make these payments to municipalities in FY 16 if DOH made a payment on the authority's behalf in FY 15. The bill expands this prohibition for two more years, through FY 18. Under both existing law and the bill, no waiver is required if federal funds are made available for the payments.

COMMITTEE ACTION

Housing Committee

Joint Favorable Substitute

Yea

9

Nay

2

(03/08/2016)