ARIZONA HOUSE OF REPRESENTATIVES Fifty-fourth Legislature Second Regular Session
	Senate: FIN DP 7-0-3-0 | 3^rd Read: 30-0-0-0

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SB 1506: low-income multifamily housing; valuation

Sponsor: Senator Brophy McGee, LD 28

Committee on Ways & Means

Overview

Includes qualified low-income multifamily residential rentals properties to class four property type and requires county assessors to value low-income rentals using an income-based method.

History

The Low-Income Housing Tax Credit (LIHTC) Program was enacted by the U.S. Congress in 1986 to promote the development of affordable rental housing for low-income individuals and families. A low-income housing tax credit is a dollar-for-dollar credit against the federal income tax liability of the owner each year over a period of 10 years. The amount of the annual credit is based on the amount invested in the affordable housing.

The Internal Revenue Service allocates housing tax credits to designated state agencies which then award the credits to developers of qualified projects. The Arizona Department of Housing (ADOH) allocates available tax credits each year in Arizona.

Class 4 property includes real and personal property and improvements to property that are used as non-primary residential property and leased or rented residential property (A.R.S. § 42- 12004).

Provisions

1. Includes low-income multifamily residential rental properties that qualify for the Low-Income Housing Tax Credit (LIHTC) to class four property. (sec. 1)

2. Defines Conventional multifamily property, low-income housing tax credit program, actual annual expenses, actual annual expenses, actual annual income and low-income multifamily residential rental property. (Sec. 2)

3. Contains an applicability clause that clarifies the property subject to valuation by the county assessor under this article consists of land, buildings and personal property of low-income multifamily residential rental property. (Sec. 2)

4. Allows an owner of a low-income multifamily residential rental property to elect a statutory income method for valuing the property. (Sec. 2)

5. States a county assessor shall value a low-income multifamily residential rental property based on the income approach to value the actual annual income and expenses of the property and using a specified capitalization rate. (Sec. 2)

6. Allows the owner of a low-income multifamily residential rental property to elect to have the valuation of their property determined by the income approach to value by submitting the three most current annual audited financial statements required by ADOH to the county assessor before September 1 of the year immediately preceding the year for which the property will be valued. (Sec. 2)

7. Requires the department of revenue to prescribe a form for an owner of low-income multifamily residential housing tax credit project may elect to value the property determined by the income approach to value. (Sec. 2)

8. States that all information a taxpayer submits to the county assessor pursuant to this article is to be considered confidential. (Sec. 2)

9. States that if a property fully transitions from a low-income multifamily residential rental property to a conventional property, the property shall no longer be valued using the alternative method prescribed in this article. (Sec. 2)

10. Requires an owner of a low-income multifamily residential rental property to provide documentation to the county assessor confirming that the property has been placed in service as a low-income multifamily residential rental property consistent with section 42 of the Internal Revenue Code. (Sec. 2)

11.  Allows an owner or operator of a low-income multifamily residential rental property that opts into the valuation method to appeal the valuation pursuant to Title 42 Chapter 16 (Property Tax Appeals and Reviews). (Sec. 2)

12. Allows an owner or operator of a low-income multifamily residential rental property who does not opt in to the valuation method in this article may appeal the valuation pursuant to Title 42 Chapter 16 (Property Tax Appeals and Reviews). (Sec. 2)

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16.                   SB 1506

17. Initials: VP/BG      Page 0 Ways & Means

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