Joint Fiscal Office and Legislative Counsel outline CHIP cap, tighter definitions and 2030 sunset

Patrick Tooterton of the Joint Fiscal Office presented a county‑by‑county methodology the Ways & Means committee could use to cap the Education Fund exposure if CHIP is adopted.

"We're taking a year's worth of background growth and basically using that as the basis for the cap on the education property tax increment that can be retained over the course of the program," Tooterton said, explaining the model uses the 2024 equalized grand list, a 14 percent statewide growth assumption and the FY25 nonhomestead education tax rate to produce a per‑county upper bound on retained increment.

Nut graf: JFO told lawmakers the cap figures are an upper bound — the program could cost the Education Fund less — but the numbers set a ceiling on cumulative retained increment per county; Legislative Counsel then offered draft statutory language that would impose tighter location and improvement definitions, require perpetual affordability covenants and shift administrative details into rulemaking.

Tooterton described the mechanics: multiply a county’s 2024 equalized grand‑list value by a 14 percent growth rate to estimate a single year’s background growth, apply the FY25 nonhomestead education tax rate to translate that growth into tax dollars, and then apply the proposed retention percentage (70 percent in the bill's market‑rate scenario) to get the county cap. He said the statewide aggregate using that approach was roughly $190 million as an illustrative upper bound; because the calculation treats all counties as if they fully used available increment, actual program costs could be much lower.

John Grama of the Office of Legislative Counsel walked committee members through a tracked‑change draft that would: adopt Title 24's statutory affordable‑housing definition for the CHIP incentive tier; replace a broad, permissive list of improvements with a more exhaustive enumerated list of eligible infrastructure (water, wastewater, stormwater, public roads, multimodal facilities, street lighting, sidewalks, site preparation including acquisition and brownfield remediation); require housing infrastructure agreements and perpetual affordability restrictions for units designated affordable; add the familiar TIF “but‑for” test for applications; and accelerate the bill‑sunset and program review timing to 2030 (with project debt service terms still running as structured in the financing).

Grama also proposed limiting new TIF district approvals after CHIP becomes effective, so the state would stop approving new TIFs after a July 1, 2025 cutoff tied to CHIP's effective date. He included a provision directing the administering agency to adopt prioritization rules to manage applications within any county cap and to prefile those rules for fiscal review.

Ending: Committee members raised concerns about complexity, sequencing for permits and the potential chilling effect of caps on project pipelines. Members asked staff to provide more modeling overnight so they could discuss amendments and prioritization methods at future meetings.