House panel hears details of CHIP pilot to use project-based tax increment financing for housing

The House Appropriations Committee spent the bulk of a May 15 session on S.127’s proposed Community and Housing Infrastructure Program, or CHIP, a pilot program that would let municipalities, developers or approved third parties use project‑level tax increment financing to pay for infrastructure tied to new housing.

"The basic way to think about tax increment financing," said John Gray, Office of Legislative Counsel, "is you fix the original taxable value, and you retain the property tax on future increases to finance infrastructure." Gray walked the committee through differences between existing TIF districts and the CHIP project‑based approach, including a sponsor concept that allows three kinds of sponsors: the municipality, the developer or an approved third‑party sponsor.

The CHIP proposal would require a local housing development plan, a map of the housing development site and public hearings…