Incentives Developers Facilitate Affordable Housing

List of nondeveloped real property - submission to capital development committee - report to general assembly - property tax - modification to administration of existing property tax exemption - certain affordable housing developments. Not later than October 15, 2019, the act requires each state agency and state institution of higher education to submit to the capital development committee (committee) a list of all nondeveloped real property owned by or under the control of the agency or institution. The act defines "nondeveloped real property" to mean unimproved real property that is not otherwise protected for or dedicated to another use such as an access or a conservation easement.

Not later than October 15 of each year thereafter, the act requires each agency or institution to submit to the committee any additions or deletions to the list identifying any nondeveloped real property the agency has acquired or disposed of during the preceding state fiscal year. The committee is required to include this information in an annual report published on the website of the general assembly. The division of housing within the department of local affairs (division) is required to provide a link to the report on the division's website. The act exempts the division of parks and wildlife in the department of natural resources from these requirements.

On a page on the website maintained by the department of local affairs that is dedicated to the division, the act requires the division to provide a link to the annual report that includes information on nondeveloped real property owned by or under the control of each state agency or institution of higher education. Not later than once annually by December 31 of each year, the division is required to update this link.

Under current law, certain property is exempt from the levy and collection of the real property tax if the property is owned by:

• A nonprofit corporation, the earnings of which do not inure to a private shareholder, and the property is irrevocably dedicated to charitable, religious, or hospital purposes; or
• A nonprofit corporation that is a general partner of a partnership formed for the purpose of creating or maintaining affordable housing.

The statutory provisions that allow for the property tax exemption for a partnership satisfying the requirements of the exemption do not apply if, during a specified compliance period, the partnership which owns the residential structure distributes income or has income available for distribution to its partners or if the residential structure is sold or otherwise disposed of during the compliance period. If the property tax administrator (administrator) determines that income has been distributed or has been available for distribution or the residential property has been sold or otherwise disposed of, the administrator is required to revoke the property tax exemption for the residential property and to levy and collect property tax against the residential property, which would have otherwise been levied and collected from the date on which the exemption was initially granted plus all delinquent interest as provided for by law.

For property tax years commencing on or after January 1, 2019, if the administrator determines that income has been distributed or has been available for distribution or the residential property has been sold or otherwise disposed of, the administrator is required to either revoke the property tax exemption for the residential property as of the date income becomes available for distribution or terminate the exemption as of the date the property is transferred. Under the act, the administrator is no longer required in such circumstances to levy and collect property taxes that otherwise would have been levied and collected.

(Note: This summary applies to this bill as enacted.)