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Conferees align CHIP and TIF timelines to 2035, set increment-retention rates and schedule cap review
Summary
Conference conferees aligned CHIP and TIF deadlines at 2035, set increment-retention rates at 70% (standard) and 80% (portable-eligible), proposed a 60% floor-area threshold for project eligibility, and added an annual reporting requirement that shows aggregate lifetime tax-increment retention approved in a year.
Conference conferees made several finance and programmatic adjustments to the S.127 conference draft affecting the Capital Housing Infrastructure Program (CHIP) and tax-increment financing (TIF) districts.
John Gray told conferees the draft now aligns the CHIP final application deadline and the TIF district sunset at 2035. "The chip'bridal application deadline is 2035," he said, noting that conforming changes have been made to the draft and that the TIF sunset section now reflects that date.
The conference draft also changes project increment-retention percentages and eligibility thresholds. Conferees reported that where earlier positions had shown 75/90 percent retention, the working draft sets the retention for standard projects at 70 percent and for portable-eligible projects at 80 percent. The house previously proposed 65/80 percent; the senate had proposed lower thresholds in earlier drafts. A committee member summarized: "what you see here is, 70/80%," and conferees said the 60 percent floor-area threshold is being proposed as a standard to ensure projects are "mostly housing." The house had earlier proposed 65% and the senate 51%; the conference draft proposes 60% and an alternative determination path to give flexibility for mixed-use configurations.
On the funding cap, conferees debated whether to exclude affordable and moderate-income housing projects from an overall CHIP cap. One committee member said the conference language offers a "halfway position" by providing a five-year review: conferees added a provision asking the programs to return to committees of jurisdiction after initial years of implementation with recommendations on an appropriate cap and noted a $5,000,000 booster could be added if needed. Conferees also discussed that the economic activity generated by housing projects can increase Education Fund receipts and partially offset retention amounts; one member cited a recent chart showing a $160,000,000 benefit to the Education Fund tied to CHIP activity.
Conferees added an annual reporting requirement: the program's annual report should include the aggregate lifetime tax-increment retention approved in that year, enabling review of how much lifetime retention the committee is authorizing annually under a cap. John Gray said the draft also keeps a flat 90'day deadline from site visit for applicable actions.
Additional items discussed included a November 15 rulemaking guidance deadline for administrative guidance related to the program and that conferees would revisit cap levels in five years. Conferees did not finalize exclusion of affordable and moderate projects from the cap during this session; the provision was discussed as an alternative that some members favored but not included in the working offer at this meeting.
No formal votes were recorded in the session; conferees continued to refine the conference report and planned to circulate edited language.
