House panels review Ways and Means' CHIP tax-increment changes: 60% retention, $14M annual cap and pilot sunset

Members of the House Commerce and Economic Development Committee and the House General & Housing Committee on Tuesday held a joint hearing to review House Ways and Means’ amendments to the housing bill's tax‑increment financing provisions for the Community and Housing Infrastructure Program (CHIP).

Charlie Kimball, a member of House Ways and Means and reporter for the committee’s amendments, told members the committee tried "to put some meaningful, reasonable guardrails around the use of the statewide education property tax" while still allowing CHIP to support housing development. "What we're looking to do is to put some meaningful, reasonable guardrails around the use of the statewide education property tax," Kimball said.

The Ways and Means changes summarized in the hearing include a required but‑for test, limits on eligible locations, a housing floor‑area threshold, adjusted increment retention rates, explicit caps on total retained increment, and a pilot sunset for later review.

Why it matters: CHIP uses foregone education property tax increment to finance infrastructure that developers then use to build housing. That foregone revenue reduces money that otherwise would flow to the statewide education fund; the Ways and Means package is intended to limit the state’s long‑term exposure while preserving a tool to spur housing investment.

Most important details

- But‑for test: The bill would require an approval body to determine whether the proposed infrastructure and the associated development would not have proceeded, or would have proceeded in a materially different way or with delay, absent CHIP support. Kimball described the but‑for test as "to determine that state funds are necessary for this development to occur." He also acknowledged the test can be hard to audit in some cases.

- Eligible locations: The amendments focus CHIP eligibility on existing designated centers and on "existing settlements" within a half‑mile of a settlement…