Florida Senate - 2020 SB 856 By Senator Pizzo 38-01037-20 2020856__ 1 A bill to be entitled 2 An act relating to an affordable housing tax 3 reduction; creating s. 196.1979, F.S.; defining terms; 4 providing legislative findings; providing a reduction 5 in certain property taxes to taxpayers building or 6 renovating certain affordable, elderly, or workforce 7 housing projects; providing qualifying criteria; 8 specifying the calculation of property assessments 9 over the reduction term; providing taxpayer 10 requirements for recording a certain covenant; 11 providing a requirement for the property appraiser in 12 applying reductions; specifying an annual reporting 13 requirement for taxpayers; providing a criminal 14 penalty; authorizing certain counties to limit the 15 total number of qualifying projects, subject to 16 certain requirements; specifying a taxpayer’s 17 liability for back taxes, penalties, interest, and 18 certain remedies under certain circumstances; 19 providing an effective date. 20 21 Be It Enacted by the Legislature of the State of Florida: 22 23 Section 1. Section 196.1979, Florida Statutes, is created 24 to read: 25 196.1979 Affordable housing property tax reduction.— 26 (1) As used in this section, the term: 27 (a) “Affordable housing project” means a qualifying housing 28 development that receives an allocation of 4 percent low-income 29 housing tax credits from the corporation pursuant to s. 30 420.5099, receives bonds for qualifying housing developments 31 from a housing finance authority after July 1, 2020, or both. 32 (b) “Base tax” means the operating taxes remitted to a 33 project taxing authority in the tax year immediately preceding 34 the reduction term. 35 (c) “Corporation” means the Florida Housing Finance 36 Corporation. 37 (d) “Elderly housing project” means a rental housing 38 project that receives an allocation of 9 percent low-income 39 housing tax credits from the corporation pursuant to s. 420.5099 40 and that meets all of the following criteria: 41 1. It reserves at least 80 percent of the rental unit 42 occupancy in the project for the elderly. 43 2. It offers all rental units to eligible persons. 44 3. It implements the standards and processes adopted by 45 rule of the corporation to reduce barriers to elderly rental 46 housing entry. 47 (e) “Household” has the same meaning as in s. 196.075(1). 48 (f) “Operating taxes” means the nonvoted millage portion of 49 the county millage and the municipal millage as identified in s. 50 200.001(1)(a) and (2)(a), respectively. 51 (g) “Project taxing authority” means a county or 52 municipality, as those terms are defined in s. 200.001(8)(a) and 53 (b), respectively, which is authorized to levy operating taxes 54 against real property in the jurisdiction in which a qualifying 55 project is located. 56 (h) “Qualifying project” means an affordable housing 57 project, elderly housing project, or workforce housing project 58 that: 59 1. Is located in a county with a population of 825,000 or 60 more; and 61 2. Has not received an affordable housing property 62 exemption pursuant to s. 196.1978(2). 63 (i) “Reduction term” means the 25-year tax reduction period 64 beginning the year in which the qualifying project is first 65 assessed under s. 192.042(1) and certified by the county 66 property appraiser as eligible to receive a reduction in 67 operating taxes. 68 (j) “Taxpayer” has the same meaning as in s. 192.001(13). 69 (k) “Workforce housing project” means a rental housing 70 project containing four or more dwelling units for natural 71 persons and households which has not received from the 72 corporation an allocation of low-income housing tax credits 73 pursuant to s. 420.5099, a loan pursuant to s. 420.5087, or bond 74 proceeds pursuant to s. 159.612, and in which: 75 1. At least 10 percent of the rental units are set aside 76 for one or more natural persons or a family with a total annual 77 gross household income greater than 60 percent and up to 80 78 percent of the median annual income, adjusted for family size, 79 for households within the metropolitan statistical area, the 80 county, or the nonmetropolitan areas of this state, whichever is 81 greatest; 82 2. At least 20 percent of the rental units are set aside 83 for one or more natural persons or a family with a total annual 84 gross household income greater than 60 percent and up to 100 85 percent of the median annual income, adjusted for family size, 86 for households within the metropolitan statistical area, the 87 county, or the nonmetropolitan areas of this state, whichever is 88 greatest; and 89 3. Rents for the rental units set aside under subparagraphs 90 1. and 2. are set at the applicable income limitations 91 established by the corporation for the county in which the 92 rental housing project is located. For rental units within the 93 project which are not set aside under subparagraphs 1. and 2., 94 the taxpayer may offer the units at rents it determines at its 95 sole discretion. 96 (2) The Legislature finds that property used to provide 97 affordable, elderly, and workforce housing to natural persons 98 and households that meet the low-income or moderate-income 99 limits is a charitable purpose. Notwithstanding s. 196.195(4), a 100 taxpayer who builds or renovates a qualifying project after July 101 1, 2020, may receive a reduction in operating taxes that would 102 otherwise be assessed, if both of the following criteria are 103 met: 104 (a) The taxpayer timely files an application for the tax 105 reduction with the property appraiser no later than March 1 of 106 the year immediately after the year in which the qualifying 107 project is first assessed under s. 192.042(1). 108 (b) The taxpayer records a covenant running with the land 109 which restricts the rents of units within the qualifying project 110 in accordance with the criteria under paragraph (1)(a), 111 paragraph (1)(d), or paragraph (1)(k), as applicable. 112 (3) For the first 16 years of the reduction term, a 113 qualifying project shall be assessed operating taxes in an 114 amount equal to the base tax, subject to an annual adjustment 115 equal to 2.5 percent beginning in year 2 of the reduction term 116 or the percentage change in the Consumer Price Index for the 117 county in which the qualifying project is located, whichever is 118 less. After the first 16 years of the reduction term, the 119 qualifying project shall be assessed as follows: 120 121 Year of Tax Reduction Affordable Housing Reduction PercentageWorkforce Housing Reduction Percentage 122 1-16 100 percent 100 percent 123 17 90 percent 100 percent 124 18 80 percent 90 percent 125 19 70 percent 85 percent 126 20 60 percent 75 percent 127 21 50 percent 60 percent 128 22 40 percent 50 percent 129 23 30 percent 40 percent 130 24 20 percent 25 percent 131 25 10 percent 15 percent 132 (4) If the property appraiser approves the application, the 133 taxpayer must submit the covenant under paragraph (2)(b) for 134 recording. The property appraiser shall apply the authorized tax 135 reductions beginning in the same tax year. The taxpayer 136 submitting the application is responsible for the cost of 137 recording the covenant. 138 (5) A taxpayer who receives a tax reduction is required to 139 submit a report annually to the property appraiser confirming 140 his or her compliance with the rent restrictions required for 141 the receipt of the reduction. The report must be executed by the 142 taxpayer or an authorized representative of the taxpayer and 143 must include the written declaration set forth in s. 92.525(2). 144 A taxpayer who falsifies the written declaration commits a 145 felony of the third degree, punishable as provided in s. 146 775.082, s. 775.083, or s. 775.084. 147 (6) Each county described in s. 420.5087(1)(a) where a 148 qualifying project may be located may, by the adoption of an 149 ordinance and after conducting a public hearing noticed in a 150 newspaper of general circulation, limit the total number of 151 qualifying projects the property appraiser may approve annually, 152 upon a finding supported by competent substantial evidence that 153 such a limitation is necessary in order to avoid a substantial 154 impairment of the taxing authority’s ability to meet its 155 financial obligations to fund other public services that are 156 necessary to ensure the public safety and welfare. 157 (7)(a) If the property appraiser determines that a 158 qualifying project that was granted a tax reduction failed to 159 offer rents as required in the recorded covenant and as set 160 forth in this section, the taxpayer is liable for the payment of 161 any back taxes, penalties, and interest, as well as any other 162 remedies authorized pursuant to s. 193.092. 163 (b) If a property appraiser improperly grants a tax 164 reduction as a result of a clerical mistake or an omission, the 165 taxpayer improperly receiving the reduction shall not be 166 assessed back taxes, penalties, or interest, or liable for any 167 other remedies authorized under s. 193.092. 168 Section 2. This act shall take effect July 1, 2020.