ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

Senate: Approp DP 9-0-1-0: 3rd Read 24-5-1-0

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

SB 1601: appropriation; Arizona America250 commission

Sponsor: Senator Leach, LD 17

S/E: qualified projects; affordable housing; eligibility

Committee on Appropriations

Overview

Specifies that the property valuation of a project that qualifies for the Affordable Housing Tax Credit (Credit) is not a reduction in property taxes for purposes of the Credit.

History

The Low-Income Housing Tax Credit (LIHTC) Program was enacted by the U.S. Congress in 1986 to finance the construction and rehabilitation of low-income affordable rental housing for individuals and families. 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 credits each year in Arizona (26 U.S.C. § 42).

The ADOH must allocate $4,000,000 of the Credit to taxpayers owning investments on qualifying property. A qualified project approved for the Credit is ineligible for any abatement, exemption or other reduction in state or local ad valorem property taxes otherwise allowed by statute. (A.R.S. § 41-3954)

Low-income multifamily residential rental property is property for which the owner received an allocation of federal income tax credits through the LIHTC Program. An owner or operator of qualifying low-income multifamily residential rental property may elect a statutory income-based method for valuing the property. The county assessor must value low-income multifamily residential rental property based on the income method to value using the actual annual income and actual annual expenses of the property and using the county assessor determined capitalization rate. If a low-income multifamily residential rental property has fully transitioned to current use as a conventional multifamily property, the property no longer qualifies for the statutory income-based valuation method. (A.R.S. § 42-13603).

Provisions

1.   States that the local assessment of property tax for Low-Income Multifamily Residential Rental Property is not a reduction in state or local ad valorem property taxes for the purposes of the Credit. (Sec. 1)

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5.                     SB 1601

6.   Initials VP           Page 0 Appropriations

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