SB 199 – AS AMENDED BY THE SENATE
01/17/08 2665s
01/17/08 0023s
2007 SESSION
10/04
SENATE BILL 199
AN ACT relative to the assessment of property subject to a housing subsidy restriction.
SPONSORS: Sen. DeVries, Dist 18; Sen. Reynolds, Dist 2; Sen. Janeway, Dist 7; Sen. Hassan, Dist 23; Sen. Fuller Clark, Dist 24; Sen. Cilley, Dist 6; Sen. Burling, Dist 5; Rep. Peterson, Hills 3; Rep. Hager, Merr 12; Rep. Nordgren, Graf 9; Rep. Lasky, Hills 26; Rep. Schulze, Hills 26
COMMITTEE: Public and Municipal Affairs
This bill provides a procedure for the assessment of property subject to a housing subsidy covenant or other legal restriction.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
01/17/08 2665s
01/17/08 0023s
07-1195
10/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seven
AN ACT relative to the assessment of property subject to a housing subsidy restriction.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Appraisal of Property; Reference Added. Amend RSA 75:1 to read as follows:
75:1 How Appraised. The selectmen shall appraise open space land pursuant to RSA 79-A:5, open space land with conservation restrictions pursuant to RSA 79-B:3, land with discretionary easements pursuant to RSA 79-C:7, residences on commercial or industrial zoned land pursuant to RSA 75:11, earth and excavations pursuant to RSA 72-B, and residential rental property subject to housing subsidy restriction pursuant to RSA 75:1-a, and all other taxable property at its market value. Market value means the property’s full and true value as the same would be appraised in payment of a just debt due from a solvent debtor. The selectmen shall receive and consider all evidence that may be submitted to them relative to the value of property, the value of which cannot be determined by personal examination.
2 New Section; Residential Property Subject to Housing Subsidy Restriction. Amend RSA 75 by inserting after section 1 the following new section:
75:1-a Residential Property Subject to Housing Subsidy Restriction. The appraisal for property tax purposes on multifamily residential rental property which is entitled to federal low income housing tax credits under Section 42 of the Internal Revenue Code and which is subject to a recorded housing subsidy covenant that restricts tenant eligibility and rents shall, upon the affirmative request of the taxpayer, be determined by an income approach. A copy of the recorded land use restriction required by Section 42 of the Internal Revenue Code or other low income rental use restriction covenant required by the New Hampshire housing finance authority, is sufficient proof of entitlement. To make an annual election for an appraisal of property subject to a recorded housing subsidy restriction, the taxpayer shall, by March 31, provide relevant information described in this section and request that the municipal assessor use the income approach. The income approach factors shall be:
I. Potential gross income, determined as follows:
(a) For units receiving assistance under a project-based rental subsidy contract, using the rents specified in the contract.
(b) For all other units subject to a legal restriction, using the maximum restricted rents allowed by the legal restrictions governing the rents of the units for the geographic area in which the property is located. Where multiple legal restrictions apply, the most restrictive shall be used. Maximum restricted rents shall be adjusted as appropriate using utility allowances for the geographic area in which the property is located, and as provided by the New Hampshire housing finance authority pursuant to RSA 204-C:8-a.
(c) For all non-restricted units in properties where only a portion of the units are subject to a legal restriction, using non-restricted rents as determined by the local market.
II. Actual operating expenses, including deposits to reserve accounts required by the housing subsidy covenant or other legal restriction, but excluding mortgage debt service and depreciation, incurred with respect to the property, as provided by the taxpayer and certified by a third-party certified public accountant.
III. A vacancy loss rate that is equal to the rental market vacancy rate for the geographic area in which the property is located, as provided by the New Hampshire housing finance authority pursuant to RSA 204-C:8-a.
IV. A capitalization rate that is typical for the geographic area in which the property is located, as determined annually by March 31 by the commissioner of revenue administration, and as published by the New Hampshire housing finance authority pursuant to RSA 204-C:8-a.
V. The assessed valuation of residential rental property with restricted rents shall not take into consideration the value of intangible assets including, but not limited to, government subsidies or grants, below market rate mortgage financing, rental subsidy contracts, and tax credits where such subsidies are used to offset project development expenses in order to allow for restricted rents. The assessed valuation shall not take into consideration the actual cost of acquisition or construction of the project.
3 New Section; Housing Finance Authority; Publication Required. Amend RSA 204-C by inserting after section 8 the following new section:
204-C:8-a Publication Required. The authority shall publish annually such information on maximum restricted rents, utility allowances, vacancy rates, and capitalization rates as necessary to appraise property pursuant to RSA 75:1-a.
4 Effective Date. This act shall take effect July 1, 2008.