Conference committee negotiates TIF caps, affordability test and review period in S.127 housing bill

Members of the House–Senate conference committee negotiating S.127, the omnibus housing bill, exchanged counterproposals on tax increment financing (TIF) provisions, including whether the bill's "but‑for" test should apply only to affordable housing, how large a TIF cap should be, whether the TIF sunset should be removed, the increment‑retention percentages, and how long municipalities would have before a required review of retention percentages.

The negotiations matter because TIF rules determine how much municipal and school district property‑tax increment can be retained to pay project debt, how long developers and municipalities can rely on that increment, and when the legislature or oversight body must reassess percentages — all of which affect project finance and local revenues.

Committee members proposed a counteroffer that would keep the eligibility "but‑for" test limited to "affordable" units rather than expanding it to include "moderate‑income" units, saying restricting the test to affordable housing preserves a more meaningful exemption. The same side proposed maintaining a $40,000,000 cap on TIF plus an additional $5,000,000 for a reset, and agreed to remove the statutory sunset on TIFs while retaining the cap. Conferees discussed alternative…