Revision: April 22, 2010, midnight
SB 349-FN-LOCAL – VERSION ADOPTED BY BOTH BODIES
03/03/10 0809s
2010 SESSION
10/09
SENATE BILL 349-FN-LOCAL
AN ACT relative to the procedures for appraisal of multifamily residential rental property subject to covenants under the low-income housing tax credit program.
SPONSORS: Sen. DeVries, Dist 18; Rep. Patten, Carr 4; Rep. Stohl, Coos 1
COMMITTEE: Public and Municipal Affairs
This bill clarifies the procedures for appraisal of residential property subject to a housing covenant under the low-income housing tax credit program and repeals a contingent amended version of the statute.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03/03/10 0809s
10-2845
10/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to the procedures for appraisal of multifamily residential rental property subject to covenants under the low-income housing tax credit program.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Residential Property Subject to Housing Covenant Under the Low-Income Housing Tax Credit Program. Amend the introductory paragraph of RSA 75:1-a to read as follows:
75:1-a Residential Property Subject to Housing Covenant Under the Low-income Housing Tax Credit Program. The appraisal for property tax purposes on multifamily residential rental property which [has been allocated federal low-income housing tax credits under] is governed by 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 under this section. 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 an allocation of federal low-income housing tax credits] that the property is eligible for assessment under this section.
2 Election; Applicability. Amend RSA 75:1-a, I to read as follows:
I. To make an election for an appraisal of property subject to a housing covenant under the low-income housing tax credit program, the taxpayer shall, by October 1 preceding the tax year for which the election is sought, provide written notice to the municipality of the taxpayer’s election to be assessed under this section, using a form prepared by the department of revenue administration. A property that as of April 1 of the tax year is under construction shall not be eligible to apply for assessment under this section.
3 Financial Information. Amend RSA 75:1-a, IV to read as follows:
IV. Financial information that is required from the taxpayer under this section shall be the audited financial statements from the prior calendar year as prepared by a third-party certified public accountant. For properties with financial data for part of the prior calendar year, the assessor shall use the partial data and the projected operating budget for the first full year of operations as provided by the New Hampshire housing finance authority to extrapolate a full year’s estimated operation financials.
4 New Subparagraph; Definition; Multifamily Rental Property. Amend RSA 75:1-a, VIII by inserting after subparagraph (h) the following new subparagraph:
(i) “Multifamily rental property” means the property described in the recorded land use restriction agreement.
5 New Paragraph; Rulemaking. Amend RSA 75:1-a by inserting after paragraph VIII the following new paragraph:
IX. The commissioner of the department of revenue administration shall adopt rules pursuant to RSA 541-A concerning how capitalization rates shall be established, including a process for receiving public input prior to such establishment.
6 Repeal. The following are repealed:
I. 2008, 390:9, relative to a contingent version of RSA 75:1-a.
II. 2008, 390:10, relative to the contingent effective date.
III. 2008, 390:11, II, relative to the effective date.
7 Effective Date. This act shall take effect June 30, 2010.
LBAO
10-2845
01/13/10
SB 349-FN-LOCAL - FISCAL NOTE
AN ACT relative to the procedures for appraisal and enforcement of taxation of multifamily residential rental property subject to covenants under the low-income housing tax credit program.
FISCAL IMPACT:
The New Hampshire Municipal Association and the Department of Revenue Administration state this bill may increase local revenue by an indeterminable amount in FY 2011 and each year thereafter. There is no fiscal impact on state and county revenue or on state, county, and local expenditures.
METHODOLOGY:
The New Hampshire Municipal Association states this bill clarifies procedures for assessing local property taxes on residential property subject to a restricted housing covenant under the low income housing federal tax credit program and proposes a change-in-use tax if the property is released from the land use restriction covenant within 15 years of originally recording that covenant, which may lead to an increase in local revenue. The Association states this bill also repeals contingency provisions in Ch. 390, L’08 that required the adoption of rules by the assessing standards board, but this repeal did not have a fiscal impact. The Association does not have information available regarding the assessed valuation of these types of properties or the likelihood that a covenant remains in place for the 15 year period, so it cannot estimate a specific amount of any revenue increase.
The Department of Revenue Administration states this bill will require the Department to develop rules and hold annual public forums before it establishes capitalization rates, but the associated administrative tasks should be absorbed within the existing operating budget. The Department also states the provisions of this bill may increase revenue at the local level, but it cannot reasonably estimate the amount of such an increase.