P.A. 22-73 AAC Property Tax Exemptions for Property Used for Charitable Purposes. (H.B. 5168)

Home P.A. 22-73 AAC Property Tax Exemptions for Property Used for Charitable Purposes. (H.B. 5168)

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Current law exempts from property tax certain housing owned by, or held in trust for, organizations that are exempt from federal income taxes and organized exclusively for charitable purposes. Under current law, housing that is partially or entirely funded by government subsidies or for low- and moderate-income people is not deemed a charitable purpose and is ineligible for the property tax exemption, unless it is temporary housing used mainly for one or more of these purposes:

  1. an orphanage;
  2. a drug or alcohol treatment or rehabilitation facility;
  3. to house people who are homeless, have a mental health disorder or an intellectual or physical disability, or are domestic violence victims;
  4. to house ex-offenders or participants in judicial branch- or Department of Corrections- sponsored programs; or
  5. as short-term housing where the average stay is less than six months.

The bill eliminates the provision restricting the exemption to just temporary housing for these purposes, expanding the exemption to the first four types of housing listed above regardless of how long people stay in them.

The bill also specifies that government payments for the treatment, support, or care of individuals housed in a property described above (e.g., a drug treatment facility or housing for individuals with a physical disability) do not constitute government subsidies under the law.

Exemption Denials: Existing law requires boards of assessors (i.e., assessors) to determine what portion of a property, if any, owned by scientific, educational, literary, historical, charitable, agricultural, and cemetery organizations (i.e., charitable property) is exempt and assess any property they determine is taxable. They must do so by inspecting the tax-exempt filing these organizations must file to claim their property tax exemptions. If an assessor determines that property claimed to be exempt is taxable, the bill requires them to state their rationale in the records.

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