Subcommittee advances bill to exclude federal housing tax credits from local property valuation

Chairman Faizon urged the committee to advance House Bill 753, saying the measure would prevent local property tax assessors from treating federal low‑income housing tax credits as part of the taxable value of a development. "This bill simply would just say, when a developer gets tax credits to build a low income housing development, that they can't be taxed for that tax credit," he said.

Faizon framed the bill as a tool to encourage private developers to build and hold affordable units for 20 years, at rents capped at 60% of area median income, arguing that taxing the federal incentive undermines the original purpose. He noted the state's population and economic growth as context for the need for more low‑income housing and said several other states have stopped treating the credits as taxable value.

Opponents and questioners pressed the sponsor on mechanics and consequences. Representative Butler asked whether the proposal addresses property tax only, and whether the federal tax credits would still appear as assets for financing. Faizon said the bill targets how assessors account for the federal credit in valuation, not whether credits exist as assets on a developer's financial statements.

Representative Dixie raised concerns about timing and local fiscal impacts, asking who would make up any lost revenue to counties for roads, schools and services. Faizon responded that lowering assessed value initially could be offset over time by increased development and an expanded tax base.

The committee adopted a technical amendment changing a date in the bill and then voted to advance HB 753 as amended.