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Committee advances constitutional amendment to change how low‑income housing tax credit properties are assessed after owner testimony
Summary
The Ways & Means committee voted to advance HR1392, a proposed constitutional amendment that would let the General Assembly prescribe assessment rules for low‑income housing tax credit properties after property owners testified that some counties are taxing those properties at multiples of net income.
Representative Le, the bill sponsor, told the committee HR1392 would give voters the chance to empower the General Assembly to ‘‘specifically prescribe how these unique properties would be assessed,’’ after years of uneven local assessor practices and multiple court decisions on the issue.
The proposal grew out of what the sponsor described as a 26‑year effort to resolve how governments value properties built with state low‑income housing tax credits. ‘‘House Resolution 1392 gives the voters an opportunity to empower you as the General Assembly to specifically prescribe how these unique properties would be assessed,’’ Le said, citing prior legislation and Supreme Court guidance.
Property owner Rob Haley testified that local assessments have produced large tax bills that exceed the properties’ operating income. ‘‘In 2024 we had roughly $77,000 in net income before payment of any types of taxes on Hayenwood Gardens,’’ Haley said. ‘‘Our tax bill that year before any appeals was $109,000,’’ he added, describing similar pressures on two other properties and saying one property was assessed ‘‘as if it was complete when it was 25% complete.’’
Committee members pressed Haley and sponsors for details. Chairman Williamson and others read aloud publicly available assessed values for one property — ‘‘$12,670,500’’ — and compared that to reported rents of roughly ‘‘$500 to $800’’ per unit. Chairman Dicki asked how counties are currently calculating value and whether HR1392 would move the state to an income‑based approach. The sponsor and Haley said an income‑based capitalization formula (income minus expenses divided by a cap rate) — like the method Mississippi uses, they said — would more closely track ability to pay.
Representative Barrett asked about short‑term income drops, such as during renovations, and whether a purely income‑based approach would penalize owners temporarily. Le said underwriting assumptions and vacancy factors would be applied and that any details could be prescribed in enabling legislation.
After discussion the committee entertained a motion and took a voice vote to move HR1392 forward; the committee recorded at least one ‘‘no’’ during the voice tally but the motion carried. The measure is now advanced from committee and, if sent to the ballot and approved by voters, would allow the legislature to adopt laws prescribing assessment methodology for these properties.
The hearing included multiple references to prior state statutes, past legislative fixes and state Supreme Court rulings; sponsors said they will consult existing models (including a cited Mississippi statute) when drafting implementing law. The committee did not adopt a specific implementing formula during the meeting; sponsors said the details would be addressed later in general law if voters approve the amendment.
