SB 4 — AN ACT CONCERNING CONNECTICUT'S PRESENT AND FUTURE HOUSING NEEDS.

The4 enforcingsuch agencynotice. may postpone the last day by which a violation shall be corrected upon a showing by the owner or other sSB4 / File No.

203The 10enforcing sSB4agency Filemay No.postpone the last day by which a violation shall be corrected upon a showing by the owner or other responsible person that he has begun to correct the violation but that full correction of the violation cannot be completed within the time provided because of technical difficulties, inability to obtain necessary materialsor laboror inability to gainaccessto thedwelling unit wherein the violation exists.

203 responsible person that he has begun to correct the violation but that full correction of the violation cannot be completed within the time provided because of technical difficulties, inability to obtain necessary materialsor laboror inability to gainaccessto thedwelling unit wherein the violation exists.

(e) (1) Any penalty imposed by an enforcing agency pursuant to the provisions of subsection (c) of this section, and remaining unpaid for a period of sixty days after its due date, shall constitute a lien upon the real property against which the penalty was imposed, provided a notice ofLCO violation{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-000011 is recorded in the land records and indexed in the name of the31 propertyR03-SB.docx owner} noSubstitute laterBill thanNo. thirty days after the penalty was imposed.

sSB44 /of Fileviolation No.is recorded in the land records and indexed in the name of the property owner no later than thirty days after the penalty was imposed.

203(2) 11Each sSB4such Filenotice No.of violation shall be effective from the time of the recording on the land records.

203 (2) Each such notice of violation shall be effective from the time of the recording on the land records.

(2) "Eligible workforce housing opportunity development project" or "project" means a project for the construction or substantial rehabilitation of rental housing (A) located within an opportunity zone in this state, (B) designated under subsection (e) of this section for certain professions that work within the municipality in which the project is located and for low and moderate income families and individuals, and (C) that may incorporate renewable energy technology andLCO be{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0012 transit-oriented.of 31 R03-SB.docx } Substitute Bill No.

(3)4 "Substantialand rehabilitation"be meanstransit-oriented. either (A) the costs of any repair, replacement or improvement to a building that exceeds twenty- five per cent of the value of such building after the completion of all sSB4 / File No.

203(3) 12"Substantial sSB4rehabilitation" Filemeans No.either (A) the costs of any repair, replacement or improvement to a building that exceeds twenty- five per cent of the value of such building after the completion of all such repairs, replacements or improvements, or (B) the replacement of two or more of the following:

203 such repairs, replacements or improvements, or (B) the replacement of two or more of the following:

(7)LCO "Nonprofit{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-000013 corporation" means a nonprofit corporation incorporated pursuant to chapter 602 of the31 generalR03-SB.docx statutes} orSubstitute anyBill predecessor statutes thereto, that has as one of its purposes the construction, rehabilitation, ownership or operation of housing and that has articles of incorporation approved by the Commissioner of Housing in accordance with regulations adopted pursuant to section 8-79a or 8- sSB4 / File No.

2034 13(7) sSB4"Nonprofit Filecorporation" No.means a nonprofit corporation incorporated pursuant to chapter 602 of the general statutes or any predecessor statutes thereto, that has as one of its purposes the construction, rehabilitation, ownership or operation of housing and that has articles of incorporation approved by the Commissioner of Housing in accordance with regulations adopted pursuant to section 8-79a or 8- 84 of the general statutes or that is certified under this section.

203 84 of the general statutes or that is certified under this section.

Any developer of a workforce housing opportunity development project shall be allowed an exemption from any fees under section 29-263 of the general statutes, as amended by this act, and any eligible workforce housing opportunity development project shall be assessed using the capitalizationLCO of{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0014 net income method under subsection (b) of section31 12-R03-SB.docx 63b} ofSubstitute theBill generalNo. statutes, as amended by this act.

4 capitalization of net income method under subsection (b) of section 12- 63b of the general statutes, as amended by this act.

A developer may apply to sSB4the /Department Fileof No.Housing for certification as a developer qualified to receive cash investments eligible for a tax credit pursuant to this section in a manner and form prescribed by the commissioner.

203 14 sSB4 File No.

203 the Department of Housing for certification as a developer qualified to receive cash investments eligible for a tax credit pursuant to this section in a manner and form prescribed by the commissioner.

If a workforceLCO housing{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0015 opportunity development project fails to be completed on or before three years from the date of approval31 ofR03-SB.docx such} project,Substitute orBill atNo. any time the commissioner determines that a project is unlikely to be completed, the commissioner may request the Attorney General to reclaim any remaining funds contributed to the project by individuals or entities under subsection (b) of this section and, upon receipt of any such remaining funds, the commissioner shall reallocate such funds to another eligible project.

sSB44 /workforce Filehousing No.opportunity development project fails to be completed on or before three years from the date of approval of such project, or at any time the commissioner determines that a project is unlikely to be completed, the commissioner may request the Attorney General to reclaim any remaining funds contributed to the project by individuals or entities under subsection (b) of this section and, upon receipt of any such remaining funds, the commissioner shall reallocate such funds to another eligible project.

203(e)Thedevelopershallobtaintheapprovalofthezoningcommission, 15as sSB4defined Filein No.section 8-13m of the general statutes, of the municipality and of any other applicable municipal agency for the proposed workforce housing opportunity development project.

203 (e)Thedevelopershallobtaintheapprovalofthezoningcommission, as defined in section 8-13m of the general statutes, of the municipality and of any other applicable municipal agency for the proposed workforce housing opportunity development project.

Such voucher may be used as a credit against the taxLCO to{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0016 whichsuch individualor entity issubject under chapter 208or 229 of the31 generalR03-SB.docx statutes,other} thanSubstitute theBill liabilityNo. imposed by section 12-707 of the general statutes.

4 tax to whichsuch individualor entity issubject under chapter 208or 229 of the general statutes,other than the liability imposed by section 12-707 of the general statutes.

sSB4(4) /Any Filetax No.credit not used in the taxable income year during which the cash contribution was made may be carried forward or backward for the five immediately succeeding or preceding taxable or income years until the full credit has been allowed.

203 16 sSB4 File No.

203 (4) Any tax credit not used in the taxable income year during which the cash contribution was made may be carried forward or backward for the five immediately succeeding or preceding taxable or income years until the full credit has been allowed.

(a) The assessor or board of assessors in any town, at any time, when determining the present true and actual value of real property as provided in section 12-63, which property is used primarily for the purposeLCO of{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-000017 producing rental income, exclusive of such31 propertyR03-SB.docx used} solelySubstitute forBill residentialNo. purposes, containing not more than six dwelling units and in which the owner resides, shall determine such value on the basis of an appraisal which shall include to the extent applicable with respect to suchproperty,considerationofeachofthefollowing methods of appraisal:

4 purpose of producing rental income, exclusive of such property used solely for residential purposes, containing not more than six dwelling units and in which the owner resides, shall determine such value on the basis of an appraisal which shall include to the extent applicable with respect to suchproperty,considerationofeachofthefollowing methods of appraisal:

The provisions of this section shall not be applicable with respect to any housing assisted by the federal or state government except any such housing for which the sSB4federal /assistance Filedirectly No.related to rent for each unit in such housing is no less than the difference between the fair market rent for each such unit in the applicable area and the amount of rent payable by the tenant in each such unit, as determined under the federal program providing for such assistance.

203 17 sSB4 File No.

203 federal assistance directly related to rent for each unit in such housing is no less than the difference between the fair market rent for each such unit in the applicable area and the amount of rent payable by the tenant in each such unit, as determined under the federal program providing for such assistance.

(a) As used in this section, (1) "business firm" means any business entityLCO authorized{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0018 toof do31 businessR03-SB.docx in} theSubstitute stateBill and subject to the corporation business tax imposed under chapter 208, or any company subject to a tax imposed under chapter 207, or any air carrier subject to the air carriers tax imposed under chapter 209, or any railroad company subject to the railroad companies tax imposed under chapter 210, or any regulated telecommunications service, express, cable or community antenna television company subject to the regulated telecommunications service, express, cable and community antenna television companies tax imposed under chapter 211, or any utility company subject to the utility companies tax imposed under chapter 212, [and] (2) "nonprofit corporation" means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes sSB4 / File No.

2034 18entity sSB4authorized Fileto do business in the state and subject to the corporation business tax imposed under chapter 208, or any company subject to a tax imposed under chapter 207, or any air carrier subject to the air carriers tax imposed under chapter 209, or any railroad company subject to the railroad companies tax imposed under chapter 210, or any regulated telecommunications service, express, cable or community antenna television company subject to the regulated telecommunications service, express, cable and community antenna television companies tax imposed under chapter 211, or any utility company subject to the utility companies tax imposed under chapter 212, [and] (2) "nonprofit corporation" means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing and having articles of incorporation approved by the executive director of the Connecticut Housing Finance Authority in accordance with regulations adopted pursuant to section 8-79a or 8-84, (3) "workforce housing development project" or "project" meanstheconstructionorsubstantialrehabilitationofdwellingunitsfor rental housing where (A) ten per cent of the units are affordable housing, (B) forty per cent of the units are rented to the workforce population designated by the developer, in consultation with the municipality where such project is located, at a rent not exceeding twenty per cent of the prevailing rent of the area where such development is located, and (C) fifty per cent of the units are rented at a market rate and includes, but is not limited to, an eligible workforce housing opportunity development project, as defined in section 9 of this act, (4) "affordable housing" means rental housing for which persons and families pay thirty per cent or less of their annual income, where such income is less than or equal to the area median income for the municipality in which such housing is located, as determined by the United States Department of Housing and Urban Development, (5) "substantial rehabilitation" means either (A) the costs of any repair, replacement or improvement to a building that exceeds twenty-five per centofthevalueofsuchbuildingafterthecompletionofallsuchrepairs, replacements or improvements, or (B) the replacement of two or more LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0019 of 31 R03-SB.docx } Substitute Bill No.

2034 thereto, having as one of its purposes the construction, rehabilitation, ownership or operation of housing and having articles of incorporation approved by the executive director of the Connecticut Housing Finance Authority in accordance with regulations adopted pursuant to section 8-79a or 8-84, (3) "workforce housing development project" or "project" meanstheconstructionorsubstantialrehabilitationof dwellingunitsfor rental housing where (A) ten per cent of the units are affordable housing, (B) forty per cent of the units are rented to the workforce population designated by the developer, in consultation with the municipality where such project is located, at a rent not exceeding twenty per cent of the prevailing rent of the area where such development is located, and (C) fifty per cent of the units are rented at a market rate and includes, but is not limited to, an eligible workforce housing opportunity development project, as defined in section 9 of this act, (4) "affordable housing" means rental housing for which persons and families pay thirty per cent or less of their annual income, where such income is less than or equal to the area median income for the municipality in which such housing is located, as determined by the United States Department of Housing and Urban Development, (5) "substantial rehabilitation" means either (A) the costs of any repair, replacement or improvement to a building that exceeds twenty-five per centofthevalueofsuchbuildingafterthecompletionofallsuchrepairs, replacements or improvements, or (B) the replacement of two or more of the following:

sSB4(c) /The FileConnecticut No.Housing Finance Authority shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section, for business firms making cash contributions to housing programs developed, sponsored or managed by a nonprofit corporation, as defined in subsection (a) of this section, which benefit low and moderate income persons or families which have been approved prior to the date of any such cash contribution by the authority, including, but not limited to, contributions for a workforce housing development project.

203 19 sSB4 File No.

203 (c) The Connecticut Housing Finance Authority shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section, for business firms making cash contributions to housing programs developed, sponsored or managed by a nonprofit corporation, as defined in subsection (a) of this section, which benefit low and moderate income persons or families which have been approved prior to the date of any such cash contribution by the authority, including, but not limited to, contributions for a workforce housing development project.

If a program or workforce housing development project fails to be completed [after] on or before three years from the date of approval of theLCO project,{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0020 orof at31 anyR03-SB.docx time} theSubstitute authorityBill determinesNo. that a program or project is unlikely to be completed, the authority may reclaim any remaining funds contributed by business firms and reallocate such funds to another eligible program or project.

4 the project, or at any time the authority determines that a program or project is unlikely to be completed, the authority may reclaim any remaining funds contributed by business firms and reallocate such funds to another eligible program or project.

sSB4(f) /No Filetax No.credit shall be granted to any business firm for any individual amount contributed of less than two hundred fifty dollars.

203 20 sSB4 File No.

203 (f) No tax credit shall be granted to any business firm for any individual amount contributed of less than two hundred fifty dollars.

Each year, on or after the date sixty days after the date the Connecticut Housing Finance Authority publishes the list of housingLCO programs{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0021 or projects that will receive tax credit reservations, any unused portion of such31 taxR03-SB.docx credits} shallSubstitute becomeBill availableNo. for any housing program or project eligible for tax credits pursuant to this section.

4 housing programs or projects that will receive tax credit reservations, any unused portion of such tax credits shall become available for any housing program or project eligible for tax credits pursuant to this section.

(j) Nothing in this section shall be construed to prevent a business firmfrommaking any cashcontributionto ahousing programorprogram or project to which tax credits may be applied which cash contribution may result in the business firm having a limited equity interest in the program or sSB4project. / File No.

203 21 sSB4 File No.

203 project.

and (6) with respect to anyLCO income{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-000022 yearof commencing31 onR03-SB.docx or} afterSubstitute JanuaryBill 1,No. 1998:

4 any income year commencing on or after January 1, 1998:

Section 29-263 of the general statutes is repealed and the sSB4following /is Filesubstituted No.in lieu thereof (Effective October 1, 2023):

203 22 sSB4 File No.

203 following is substituted in lieu thereof (Effective October 1, 2023):

Prior to the issuance of a permit and withinsaidthirty-day period,thebuilding officialshallreviewtheplans of buildings or structures to be constructed or altered, including, but not limitedLCO to,{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-00023 plans prepared by an architect licensed pursuant to chapter 390, a professional engineer licensed pursuant to chapter 391 or an interior designer registered pursuant to chapter 396a acting within the scope of such31 licenseR03-SB.docx or} registration,Substitute toBill determineNo. their compliance with the requirements of the State Building Code and, where applicable, the local fire marshal shall review such plans to determine their compliance with the Fire Safety Code.

4 limited to, plans prepared by an architect licensed pursuant to chapter 390, a professional engineer licensed pursuant to chapter 391 or an interior designer registered pursuant to chapter 396a acting within the scope of such license or registration, to determine their compliance with the requirements of the State Building Code and, where applicable, the local fire marshal shall review such plans to determine their compliance with the Fire Safety Code.

(b) On and after July 1, 1999, the building official shall assess an educationfeeoneachbuildingpermitapplication.Duringthefiscalyear commencing July 1, 1999, the amount of such fee shall be sixteen cents per one thousand dollars of construction value as declared on the building permit application and the building official shall remit such fees quarterly to the Department of Administrative Services, for deposit sSB4in /the FileGeneral No.Fund.

203 23 sSB4 File No.

203 in the General Fund.

(c)LCO Any{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0024 municipality may, by ordinance adopted by its legislative body, exempt Class I renewable energy source projects from payment of building31 permitR03-SB.docx fees} imposedSubstitute byBill theNo. municipality.

4 (c) Any municipality may, by ordinance adopted by its legislative body, exempt Class I renewable energy source projects from payment of building permit fees imposed by the municipality.

(NEW) (Effective October 1, 2023, and applicable to assessment years commencing on or after October 1, 2023) The legislative body of any sSB4municipality /or, Filein No.a municipality where the legislative body is a town meeting, the board of selectmen may, by ordinance, exempt from real property tax any workforce housing development project, as defined in section8-395 ofthegeneralstatutes,asamendedby thisact,tothe extent of seventy per cent of its valuation for purposes of assessment in each of the seven full assessment years following the assessment year in which the construction or substantial rehabilitation, as defined in section 8-395 of the general statutes, as amended by this act, is completed.

203 24 sSB4 File No.

203 municipality or, in a municipality where the legislative body is a town meeting, the board of selectmen may, by ordinance, exempt from real property tax any workforce housing development project, as defined in section8-395 ofthegeneralstatutes,asamendedby thisact,totheextent of seventy per cent of its valuation for purposes of assessment in each of the seven full assessment years following the assessment year in which the construction or substantial rehabilitation, as defined in section 8-395 of the general statutes, as amended by this act, is completed.

On or before January first, annually, the Secretary of the Office of Policy and ManagementLCO shall{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-000025 determineof the31 amountR03-SB.docx due} toSubstitute suchBill municipality,No. in accordance with this section.

4 Management shall determine the amount due to such municipality, in accordance with this section.

(NEW) (Effective October 1, 2023) The Connecticut Housing Finance Authority shall develop and administer a program of mortgage sSB4assistance /for File(1) No.developers for the construction or substantial rehabilitation of eligible workforce housing opportunity development projects, as defined in section 9 of this act, and (2) developers for the construction or substantial rehabilitation of workforce housing development projects, as defined in section 8-395 of the general statutes, as amended by this act.

203 25 sSB4 File No.

203 assistance for (1) developers for the construction or substantial rehabilitation of eligible workforce housing opportunity development projects, as defined in section 9 of this act, and (2) developers for the construction or substantial rehabilitation of workforce housing development projects, as defined in section 8-395 of the general statutes, as amended by this act.

Such report shall includeLCO recommendations{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0026 onof methods31 toR03-SB.docx increase} suchSubstitute housingBill optionsNo. and any legislation necessary to implement such recommendations.

4 include recommendations on methods to increase such housing options and any legislation necessary to implement such recommendations.

and (4) "Low-income resident" means, after adjustments for family size, individuals or families whose income is not greater than eighty per cent of (A) the state median income, or (B) the area median income, sSB4whichever /is Fileless, No.for the area in which the resident resides, as determined by the United States Department of Housing and Urban Development.

203 26 sSB4 File No.

203 whichever is less, for the area in which the resident resides, as determined by the United States Department of Housing and Urban Development.

Any such grant may be awarded to anLCO owner{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0027 of a31 residentialR03-SB.docx dwelling} unitSubstitute thatBill isNo. (1) subject to binding affordable housing deed restrictions, (2) not owner-occupied, and (3) occupied by a tenant, or if vacant, to be occupied by a tenant not more than one hundred eighty days after the award of such grant.

4 an owner of a residential dwelling unit that is (1) subject to binding affordable housing deed restrictions, (2) not owner-occupied, and (3) occupied by a tenant, or if vacant, to be occupied by a tenant not more than one hundred eighty days after the award of such grant.

(f) The commissioner shall seek to expend the funds appropriated to sSB4the /Department Fileof No.Energy and Environmental Protection for the pilot program equally on an annual basis for the term of the pilot program.

203 27 sSB4 File No.

203 the Department of Energy and Environmental Protection for the pilot program equally on an annual basis for the term of the pilot program.

Such program shall be implemented in notLCO fewer{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-00028 than three municipalities, each with a population of not31 lessR03-SB.docx than} seventy-fiveSubstitute thousand,Bill andNo. shall provide not fewer than twenty housing units for eligible persons who need respite care because they are recovering from injury or illness.

4 not fewer than three municipalities, each with a population of not less than seventy-five thousand, and shall provide not fewer than twenty housing units for eligible persons who need respite care because they are recovering from injury or illness.

sSB4(b) /The Filetask No.force shall consist of the following members:

203 28 sSB4 File No.

203 (b) The task force shall consist of the following members:

(7)LCO The{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0029 Commissioner of Housing,31 orR03-SB.docx the} commissioner'sSubstitute designee;Bill No.

4 (7) The Commissioner of Housing, or the commissioner's designee;

sSB4(f) /The Fileadministrative No.staff of the joint standing committee of the General Assembly having cognizance of matters relating to housing shall serve as administrative staff of the task force.

203 29 sSB4 File No.

203 (f) The administrative staff of the joint standing committee of the General Assembly having cognizance of matters relating to housing shall serve as administrative staff of the task force.

ThisLCO act{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0030 shallof take31 effectR03-SB.docx as} followsSubstitute andBill shallNo. amend the following sections:

October4 1,This 2023act Sectionshall 1take 47a-23effect Sec.as follows and shall amend the following sections:

Section 1 October 1, 2023 47a-23 Sec.

4 October 1, 2023 47a-4(a) October 1, 2023 Sec.

5 October 1, 2023 47a-15a Sec.

7 October 1, 2023 New section October 1, 2023 Sec.

8 October 1, 2023 47a-58 Sec.

12 October 1, 2023 29-263 October 1, 2023, and Sec.

13 October 1, 2023, and New section applicable to assessment years commencing on or after October 1, 2023 sSB4October /1, File2023 No.Sec.

20314 30New sSB4section FileSec. No.

203 Sec.

14 October 1, 2023 New section Sec.

20 July 1, 2023 New section StatementHSG ofJoint LegislativeFavorable Commissioners:Subst.

InAPP SectionJoint 1(a)Favorable anLCO exception{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-00004- was31 addedof and31 inR03-SB.docx Section} 1(f) the notwithstanding phrase was deleted for consistency with standard drafting conventions;

in Section 5(a), a definition of "grace period" was added for clarity;

in Section 6(a)(3), "or "agent"" was added for clarity;

in Section 9(a)(9), "them" was changed to "such families or individuals" for clarity;

in Section 9(a)(10), "present" was changed to "current" for accuracy;

in Section 17(c) "paid" was changed to "returned" and such sentence rephrased for clarity;

in Section 17(d), "for projects" was added for clarity;

and Section 20 was rewritten for consistency with standard drafting conventions.

HSG Joint Favorable Subst.

sSB4 / File No.

203 31 sSB4 File No.

203 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Department of Energy and GF - Cost 600 million None Environmental Protection Department of Housing GF - Cost 423,500 to 403,175 to 528,500 503,175 State Comptroller - Fringe GF - Cost 52,883 108,410 Benefits Policy & Mgmt., Off.

GF - Cost None See Below Department of Revenue Services GF - Cost None Up to 75,000 Department of Revenue Services GF - Revenue None None Loss CHFA Resources of See Below See Below CHFA - Cost Note:

GF=General Fund Municipal Impact:

Municipalities Effect FY 24 $ FY 25 $ Various Municipalities Potential Less than Less than Cost $5,000 $5,000 Various Municipalities Revenue Potential Potential Loss Various Municipalities Precludes None See Below Grand List Growth Various Municipalities Precludes None See Below Revenue Gain 1The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 42.82% of payroll in FY 24.

sSB4 / File No.

203 32 sSB4 File No.

203 Explanation The bill establishes several new housing-related programs and pilot programs, some of which include (1) providing $600 million in FY 24 for a pilot program to make grants for certain multifamily retrofitting projects, (2) establishing a new $5 million workforce housing opportunity development tax credit program, and (3) establishing a homelessand veterantemporary housing respite pilot program.The bill contains various other provisions that do not have a fiscal impact.

The bill’s provisions resulting in a fiscal impact to the state or municipalities are described by the section below.

Section 7 results in a minimal one-time cost of less than $5,000 to the Department of Housing (DOH) in FY 24 only to translate into Spanish the standardized rental agreement forms the agency must develop.

Section 8 results in a potential minimal cost of less than $5,000 to municipalities in FY 24 and FY 25 to provide housing code violation complaint forms in English and Spanish.

Section 9 establishes a new $5 million tax credit program, to be administered by DOH, to subsidize the creation or rehabilitation of workforce housing opportunity development projects, located in federally designated opportunity zones.

As DOH does not currently administer a tax credit program or have capacity within existing staff, this section results in program administration costs to the General Fund of $226,383 in FY 24 and of $361,585 in FY 25, and annually thereafter, associated with three new staff.

The FY 24 cost includes $50,000 for consultants to assist DOH in adopting regulations as required by the bill.

It is anticipated that DOH would need to hire, by January 1, 2024, (i.e., half year personnel costs in FY 24):

(1) a housing and community development manager (salary and fringe benefits of $71,410 in FY 24 and $146,391 in FY 25), an accountant (salary and fringe benefits of $53,558 in FY 24 and $109,793 in FY 25), and a housing specialist (salary sSB4 / File No.

203 33 sSB4 File No.

203 and fringe benefits of $51,415 in FY 24 and $105,401 in FY 25) to operate the program.

Section 9 also results in a one-time cost of up to $75,000 to the Department of Revenue Services in FY 25 only associated with programming updates to the CTax tax administration system and myconneCT online portal, and form modification.

Section 11 expands the CHFA's Housing Program Contribution tax credit program, but does not increase the existing $10 million annual aggregate credit cap.

This does not result in any fiscal impact as the program currently reaches the cap on an annual basis, and there is no cost to CHFA from this provision.

Section 12 results in a revenue loss to municipalities as it exempts 1) certain workforce housing opportunity development projects, and 2) workforce housing development projects from building permit application fees.

Sections 10, 13-14 preclude an increase in grand list growth in certain municipalities by establishing incentives for workforce housing development projects that reduce their potential property tax liability.

The bill:

1) requires certain projects to be assessed below market value, and 2) allows municipalities to partially exempt such projects from property taxes for seven assessment years following project completion.

The impact will be dependent on the value of such projects.

The bill requires the Office of Policy and Management to reimburse municipalities for 70% of the revenue loss they experience if they choose to partially exempt workforce housing developments beginning in FY 26.

If the total to be reimbursed to municipalities exceeds the appropriation, then the reimbursements will be reduced proportionately.

This partially offsets any revenue loss municipalities experience as a result of the bill.

Section 15 requires CHFA to create a new mortgage assistance program for certain developers, which will result in additional staffing sSB4 / File No.

203 34 sSB4 File No.

203 costs for the quasi-public agency.

Such programs are anticipated to be funded within CHFA’s resources, which include a combination of tax- exempt private activity bonds and taxable market-rate bonds.

To the extent thenew program extends the uses of CHFA’sresources, there is some possibility of either reduced use of such resources for existing programs or of greater reliance on taxable bonds to increase overall resources available for the CHFA’s programs.

Borrowing through the use of taxable bonds is typically slightly more expensive than the issuance of tax-exempt bonds – it is anticipated that any increase in borrowing costs to CHFA from additional use of taxable bonds would be passed on to assistance recipients.

Other mortgage assistance programs administered by CHFA have been supported by General Obligation (GO) bonds.

The bill does not authorize new GO bond authorizations for this program, and outstanding bond authorizations for CHFA do not appear applicable to the newly created program, so no change in the General Fund debt service is anticipated from the bill.

Section 16 requires DOH to (1) conduct a study on ways to both increase housing for apprentices and new employees and enable them to live in the municipalities where they work, and (2) to report on it by January 1, 2024.

Given the limited research staff at DOH, their other job duties, and the time allowed, this results in a one-time cost of up to $100,000 in FY 24 to contract with a third party to complete the study and report.

Sections 17 and 20 appropriate $600 million in FY 24 to fund grants through the Department of Energy and Environmental Protection to support retrofitting projects for multifamily homes concentrating primarily ondistressed andenvironmentaljustice communities.

The bill requiresthattheappropriationbespentequallyeach fiscalyearbetween FY 24 and FY 29 ($100 million annually).

Section 18 requires DOH to establish a temporary housing respite pilot program for the homeless and veterans recovering from injury or sSB4 / File No.

203 35 sSB4 File No.

203 illness that provides at least 20 housing units across three cities.

Assuming the program (1) utilizes existing private housing units (i.e., studios) with wrap-around services or temporary housing facilities and (2) runs from January 1, 2024, to January 1, 2025, the one-time cost to DOH of $300,000 to $500,000 is estimated to be spread equally across FY and FY 25.

The bill also makes various other changes that are technical or conforming in nature, do not apply to the state or municipalities, or can be accomplished with current agency expertise, and therefore have no fiscal impact.

The Out Years In addition to out years impacts described above, Section 9 establishesa newtax credit against thepersonalincome andcorporation business taxes for individuals or entities making cash contributions to eligible developers constructing or rehabilitating eligible workforce housing opportunity development projects in federally designated opportunity zones.

This results in a revenue loss of up to $5 million annually beginning in FY 26.

2 Otherwise, the annualized ongoing fiscal impact identified above would continue into the future subject to inflation and state employee wage and fringe benefit costs.

Sources:

Department of Revenue Services Annual Report Fiscal Year 2021-2022 2Tax credit vouchers may be claimed against state corporation business and personal income taxes for taxable income years beginning in 2025;

it is anticipated that the timing of the claiming of credits would limit the revenue impact to FY 26 and beyond.

The bill caps the total amount of credits allowed per fiscal year at $5 million.

sSB4 / File No.

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203 OLR Bill Analysis sSB 4 AN ACT CONCERNING CONNECTICUT'S PRESENT AND FUTURE HOUSING NEEDS.

TABLE OF CONTENTS:

SUMMARY §§ 1 & 2 — PROHIBITION OF COLD-WEATHER EVICTIONS Prohibits, between December 1 and March 1 of any year, and with the exception of serious nuisance, (1) landlords from initiating evictions and (2) state marshals from executing evictions § 3 — LIMITS ON RENTAL APPLICATION-RELATED FEES Limits rental application-related fees and payments that landlords may require from prospective tenants to reimbursements for tenant screening reports and security deposits;

requires landlords to (1) provide prospective tenants with these reports and a receipt or invoice and (2) waive the fee if the prospective tenant provides a recent screening report that is satisfactory to the landlord §§ 4 & 5 — LIMITS ON LATE CHARGES FOR OVERDUE RENT Limits late charges that landlords may impose for overdue rent;

prohibits rental agreements from requiring any late fees that exceed these amounts;

requires landlords to apply any rent payments they receive to the most recent payment due § 6 — MUNICIPAL LANDLORD IDENTIFICATION REQUIREMENTS Modifies the current municipal landlord identification requirements, including generally extending the requirements for landlords participating in the federal Housing Choice Voucher program to nonresident rental property owners §§ 7 & 8 — STANDARDIZED RENTAL AGREEMENT AND HOUSING CODE VIOLATION FORMS IN ENGLISH AND SPANISH Requires (1) DOH to develop standardized rental agreement forms that landlords and tenants may use, (2) municipal code enforcement sSB4 / File No.

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203 agencies to create housing code violation complaint forms for tenants, and (3) that both forms be made available in English and Spanish §§ 9-16 — WORKFORCE HOUSING DEVELOPMENTS Establishes various state and local financial incentives for individuals and businesses investing in, and developing rental units set aside for, designated workforce populations and low- and moderate-income households under these programs §§ 17 & 20 — PILOT GRANT PROGRAM FOR MULTI-FAMILY RETROFITTING PROJECTS IN ENVIRONMENTAL JUSTICE COMMUNITIES Requires the DEEP commissioner, in coordination with the DOH commissioner, to establish a pilot program providing grants for certain multi-family retrofitting projects that (1) improve energy efficiency or remediate health and safety concerns and (2) are undertaken in properties meeting certain requirements, including being located in an environmental justice community;

appropriates $600 million to DEEP for FY 24 from the General Fund for the program § 18 — DOH TEMPORARY HOUSING PILOT PROGRAM Requires DOH, within available appropriations, to establish a pilot program to provide temporary housing to individuals experiencing homelessness and veterans who need respite care § 19 — TASK FORCE ON CONVERTING UNDERUTILIZED COMMERCIAL AND RETAIL PROPERTIES INTO AFFORDABLE HOUSING Establishes a 10-member task force to study converting underutilized commercial and retail properties into affordable housing and requires it to report to the Housing Committee by January 1, 2024 SUMMARY This bill (1) makes changes to various laws on tenants and landlords, (2) establishes several new housing-related programs and pilot programs, and (3) creates a new task force to study converting underutilized commercial and retail properties into affordable housing.

A section-by-section analysis follows.

The bill also makes technical and conforming changes.

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203 EFFECTIVE DATE:

Various, see below §§ 1 & 2 — PROHIBITION OF COLD-WEATHER EVICTIONS Prohibits, between December 1 and March 1 of any year, and with the exception of serious nuisance, (1) landlords from initiating evictions and (2) state marshals from executing evictions The bill prohibits owners or lessors (i.e., landlords) and their legal representatives or attorneys, between December 1 and March 1 of any year, from delivering tenants a notice to quit possession for any reason other than serious nuisance (see Background).

Additionally, it prohibits state marshals from executing evictions during this time period unless the court entered judgement against the tenant for serious nuisance.

EFFECTIVE DATE:

October 1, 2023 Background — Summary Process Procedure and Serious Nuisance By law, once a landlord has established a ground for eviction, he or she begins the process by serving the tenant with a notice to quit possession.

If the tenant fails to respond to this notice by refusing to move from the rented premises, the landlord may start proceedings in Superior Court by filing a summons and complaint.

The tenant may respond to the complaint;

if he or she contests the action, the court may try the case and enter judgment.

If the court rules for the landlord, it orders the judgment executed, and a state marshal removes the tenant and his or her belongings.

By law, serious nuisance occurs when a tenant:

1.

assaults (or credibly threatens to do so) a landlord or another tenant, 2.

purposefully causes substantial destruction to the premises, 3.

engages in conduct that is an immediate and serious safety hazard for the landlord or another tenant, or 4.

uses (or allows to be used) the leased premises for prostitution or to illegally sell drugs (CGS § 47a-15).

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203 § 3 — LIMITS ON RENTAL APPLICATION-RELATED FEES Limits rental application-related fees and payments that landlords may require from prospective tenants to reimbursements for tenant screening reports and security deposits;

requires landlords to (1) provide prospective tenants with these reports and a receipt or invoice and (2) waive the fee if the prospective tenant provides a recent screening report that is satisfactory to the landlord The bill generally prohibits landlords from requiring prospective tenants to (1) pay any fees, charges, or payments for reviewing, processing, or accepting a rental application or (2) make any other payments before or at the start of tenancy.

The bill excludes from this prohibition a security deposit and the fee for a tenant screening report, except that in the latter case it limits the fee to the landlord’s actual cost for the report.

Under the bill, a “tenant screening report” means a credit report, a criminal background report, an employment history report, a rental history report, or any combination of these that a landlord uses to determine a prospective tenant’s suitability.

The bill prohibits landlords from collecting a tenant screening report feeuntilafter they givetheprospective tenant acopy ofthe(1)screening report and (2) receipt or invoice from the entity that did the report.

Additionally, the bill requires landlords to waive the tenant screening report fee if a prospective tenant provides a copy of a screening report that is satisfactory to the landlord and was done within 30 days of his or her rental application.

EFFECTIVE DATE:

October 1, 2023 Background — Related Bill sHB 6781, § 4, reported favorably by the Housing Committee, contains nearly identical provisions.

§§ 4 & 5 — LIMITS ON LATE CHARGES FOR OVERDUE RENT Limits late charges that landlords may impose for overdue rent;

prohibits rental agreements from requiring any late fees that exceed these amounts;

requires landlords to apply any rent payments they receive to the most recent payment due By law, if a rental agreement includes a provision requiring tenants to pay a late charge for overdue rent, it must allow tenants a nine-day grace period(or four daysfor week-to-week tenancies), before imposing sSB4 / File No.

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203 the charge.

The bill limits the late charges landlords may impose after this grace period has passed.

Under the bill, if a rental agreement contains a valid written agreement to pay late charges after the grace period, the charges may not exceed the lesser of (1) $5 per day, up to a $25 maximum, or (2) 5% of the overdue rent or 5% of the tenant’s share of the rent in the case of rental agreements that are partially paid by a government or charitable entity.

The bill prohibits rental agreements from requiring tenants to agree to late charges that exceed these limits.

Additionally, the bill prohibits landlords from assessing more than one late charge on an overdue rent payment, regardless of the length of time for which the rent is overdue, and requires that they apply new rent payments to the most recent payment due.

EFFECTIVE DATE:

October 1, 2023 § 6 — MUNICIPAL LANDLORD IDENTIFICATION REQUIREMENTS Modifies the current municipal landlord identification requirements, including generally extending the requirements for landlords participating in the federal Housing Choice Voucher program to nonresident rental property owners Under existing law, generally unchanged by the bill, municipalities may require nonresident owners and landlords renting to Housing Choice Voucher (HCV) program participants (also known as project- based housing providers or PBHPs) to provide (1) their current residential addresses or (2) the current residential address of the agent in charge of the building if the owners are a business entity that owns rental property (i.e., a corporation, partnership, trust, or other legally recognized entity).

Current law includes an additional “controlling participant” requirement for PBHPs.

It requires that they provide identifying information and the current residential address of each controlling participant associated with the property, meaning an individual or entity that exercises day-to-day financial or operational control.

If a controlling participant is a business entity, the PBHP must identify and provide the residential address for a natural person who exercises sSB4 / File No.

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203 control over that entity.

The bill modifies this “controlling participant” disclosure requirement by (1) limiting it to PBHPs that are business entities and (2) extending it to nonresident owners that are business entities.

It also redefines controlling participant to mean a natural person who (1) is not a minor and (2) directly or indirectly and through any contract, arrangement, understanding, or relationship, exercises substantial control of, or owns more than 25% of, a business entity that owns rental property.

EFFECTIVE DATE:

October 1, 2023 Background HCV Program and PBHPs.

The HCV program is the federal government’s main program for helping very low-income families affordprivatemarkethousing(42U.S.C.§1437f(o)).Eligiblehouseholds that are issued a housing voucher must find housing that meets the program’s requirements.

The U.S.

Department of Housing and Urban Development (HUD) funds the program and it is administered locally by housing authorities and statewide by the Department of Housing (DOH).

State law defines PBHPs as property owners who contract with HUD to provide housing to tenants under the HCV program.

Related Bills.

SB 996, § 3, and sHB 6781, § 9, both reported favorably by the Housing Committee, contain nearly identical provisions regarding municipal landlord identification requirements.

§§ 7 & 8 — STANDARDIZED RENTAL AGREEMENT AND HOUSING CODE VIOLATION FORMS IN ENGLISH AND SPANISH Requires (1) DOH to develop standardized rental agreement forms that landlords and tenants may use, (2) municipal code enforcement agencies to create housing code violation complaint forms for tenants, and (3) that both forms be made available in English and Spanish The bill requires the DOH commissioner, within existing appropriations, to develop standardized rental agreement forms that sSB4 / File No.

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203 landlords and tenants may use.

The forms must (1) contain the essential terms of a rental agreement;

(2) be easily readable;

and (3) include plain- language explanations of all the terms and conditions, including rent, fees, deposits, and other charges.

DOH must post the forms on its website by July 1, 2024, and make them available in both English and Spanish.

The bill requires the department to revise the forms at the commissioner’s discretion.

The bill also requires agencies empowered to enforce municipal health and safety standards or the local housing code (i.e., the board of health or other designated authorities) to create and make available housing code violation complaint forms, in both English and Spanish, for tenants to use.

EFFECTIVE DATE:

October 1, 2023 §§ 9-16 — WORKFORCE HOUSING DEVELOPMENTS Establishes various state and local financial incentives for individuals and businesses investing in, and developing rental units set aside for, designated workforce populations and low- and moderate-income households under these programs The bill establishes various state and local financial incentives for individuals and businesses investing in and developing rental units set aside for designated workforce populations and low- and moderate- income households under these programs.

Specifically, the bill does the following:

1.

establishes a new tax credit against the personal income and corporation business taxes, administered by DOH, for individuals or entities making cash contributions to eligible developers constructing or rehabilitating eligible “workforce housing opportunity development projects” in federally designated opportunity zones (see Background) (§ 9);

2.

expressly allows businesses making cash contributions to nonprofits developing eligible “workforce housing development projects,” including those in an opportunity zone, to qualify for tax credits under the Connecticut Housing Finance Authority’s sSB4 / File No.

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203 (CHFA) Housing Tax Credit Contribution (HTCC) program (§ 11);

3.

requires municipal tax assessors to assess workforce housing opportunity development projects using the capitalization of net income method based on actual rent received for property tax assessment purposes (§ 10);

4.

exempts both of these categories of workforce housing projects from building permit application fees (§ 12);

5.

allows municipalities to provide up to a seven-year, 70% property tax exemption for workforce housing development projects, offset by a 70% state grant in lieu of taxes (§§ 13 & 14);

6.

requires CHFA to develop and administer a mortgage assistance program for developers of both categories of these projects (§ 15);

and 7.

requires DOH to conduct a workforce housing study and report to the Housing Committee (§ 16).

EFFECTIVE DATE:

October 1, 2023, except for the DOH workforce housing study provision, which is effective upon passage;

the property tax assessment requirements and local option exemption are applicable to assessment years beginning on or after October 1, 2023.

Workforce Housing Opportunity Development Tax Credit (§ 9) Administration.

The bill requires DOH to administer a new programproviding taxcredit vouchersto individualsor entitiesmaking cash contributions to eligible developers constructing or rehabilitating eligible housing projects in opportunity zones.

The department must begin accepting applications from eligible developers by January 1, 2024.

Under the bill, the DOH commissioner must determine the program’s additional eligibility criteria, certification conditions, and application guidelines.

The bill requires the commissioner to adopt regulations to implement the program, including conditions for sSB4 / File No.

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203 certifying developers.

Eligible Projects.

Under the bill, an eligible workforce housing opportunity development project is a project to build or substantially rehabilitate rental housing that is (1) located in an opportunity zone in the state and (2) partially designated for certain targeted residents (see “Rental Requirements”).

Additionally, the bill requires that these projects, to the extent feasible, incorporate renewable energy and be transit-oriented.

In the case of rehabilitation projects, the bill requires that (1) a building’s repairs, replacements, or improvements exceed 25% of the building’s value when rehabilitation is complete or (2) the project replace two or more major components of the building (i.e., roof structures, wall or floor structures, plumbing systems, heating and air conditioning systems, electrical systems, ceilings, or foundations).

Eligible Developers.

The bill authorizes developers to apply to DOH, as the commissioner prescribes, to be certified to receive credit- eligible cash investments under the program.

Under the bill, the following entities may qualify as eligible developers:

1.

nonprofits and business corporations incorporated in Connecticut and other business entities (i.e., partnerships, limited partnerships, limited liability partnerships, joint ventures, trusts, limited liability companies (LLCs), or associations) that (a) construct, rehabilitate, own, or operate housing and (b) are either certified by DOH under the program or whose articles of incorporation or organizational documents, as applicable, have been approved by DOH in keeping with its regulations for the moderate rental housing or moderate cost program;

2.

municipal housing authorities (and the Connecticut Housing Authority, although it is no longer active);

and 3.

municipal developers.

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203 Under the bill, a “municipal developer” is the legislative body of a municipality that has not established a housing authority;

it may be the municipality’s board of selectmen if the town meeting or representative town meeting authorized the board to act as a developer.

Rental Requirements.

The bill requires that completed workforce housing opportunity development projects be rented as follows:

1.

50% of the units at market rate (i.e., the rate the property would most probably command on the open market based on current comparable rentals in the opportunity zone);

2.

40% of the units to a designated workforce population (as described below) at a rate of up to 20% of the prevailing rent of the opportunity zone in which the development is located (the bill does not specify how the prevailing rent is measured);

and 3.

10% of the units to low- and moderate-income households (i.e., those that lack the income to rent mixed-income housing without financial assistance, as determined by the DOH commissioner) that also receive rental assistance through certain state programs or HUD’s federal section 8 program.

Under the bill, the program must establish a method for selecting tenants who meet the income criteria that does not discriminate on the basis of race, creed, color, national origin, ancestry, sex, gender identity or expression, age, or physical or intellectual disability.

Designation of Workforce Population.

The bill requires that eligible developers receive municipal approval for proposed workforce housing opportunity development projects from zoning commissions and other applicable municipal agencies.

No later than 30 days after a municipality approves a project, its legislative body (or board of selectmenifitslegislativebodyisatownmeeting)mayvotetodesignate the workforce population the project will serve.

The bill allows developersto make this designation if municipalities fail to do so within the given time limit.

Under the bill, the designated workforce sSB4 / File No.

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203 population may include volunteer firefighters, teachers, police officers, emergency medicalpersonnel,andany other professionsworking inthe town where the project is located.

Timeframe for Completion.

The bill requires eligible developers to (1) schedule the workforce housing opportunity development projects for completion within three years of DOH’s project approval and (2) submit quarterly progress reports and a final report to the DOH commissioner.

If a project is not completed within the three-year timeframe, or at any time if the DOH commissioner determines that it is unlikely to be completed, the bill allows the commissioner to ask the attorney general to reclaim any remaining contributions made by individuals and entities to the developer and reallocate the funds to another eligible project.

Tax Credits for Qualifying Contributions.

The bill requires the DOH commissioner to administer the tax credit vouchers, similar to CHFA’s existing HTCC program, for individuals or entities that make a cash contribution of at least $250 to an eligible developer for the eligible projects described above.

The vouchers may be claimed against state corporation business and personal income taxes, except for the withholding tax, for taxable income years beginning in 2025 (presumably, for tax years or income years beginning in 2025).

The Department of Revenue Services must grant the credits in the amount specified by DOH in the tax credit vouchers.

The bill caps the total amount of credits allowed per fiscal year at $5 million.

Taxpayers may claim the credits in the taxable income year in which they made the cash contribution and may carry unused credits forward or back for five years.

In the case of S corporations or entities treated as a partnership for federal tax purposes, the entity’s shareholders or partners may claim the credits.

If the entity is a single- member LLC that is disregarded as an entity separate from its owner, only the owner may claim the credit.

CHFA HTCC Program (§ 11) sSB4 / File No.

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203 The bill expressly makes investments in “workforce housing development projects” eligible for HTCC tax credits.

Under this program, CHFA administers tax credit vouchers for businesses that make cash contributions of at least $250 to nonprofits that develop, sponsor, or manage housing programs benefiting low- and moderate- income households (e.g., affordable housing developments).

The credits apply against various business taxes, including the insurance premiums, corporation business, and utility companies taxes.

Under the bill, “workforce housing development projects” are generally similar to the workforce housing opportunity projects described above, except that they are not limited to opportunity zones.

(It is unclear whether projects that meet the eligibility criteria for both programs would qualify for both credits for the same cash contributions.) Starting with tax or income years beginning on or after January 1, 2024, workforce housing development projects must be scheduled for completion within three years of approval.

Specifically, workforce housing development projects are to construct or substantially rehabilitate rental housing where:

1.

50% of the units are market rate units (i.e., the rate the unit would probably command on the open market based on comparable units in the same area);

2.

40% are rented to the workforce population designated by the developer in consultation with the host municipality;

and 3.

10% are affordable housing (i.e., when households earning no more than the host municipality’s area median income, as determined by HUD, spend 30% or less of their annual income on it).

Under the bill, “substantial rehabilitation” has the same definition as described above for workforce housing opportunity development projects.

An eligible “workforce housing opportunity development” project is also considered an eligible “workforce housing development” sSB4 / File No.

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203 project.

By law, unchanged by the bill, the total amount of tax credits allowed to businesses under the program is capped at $10 million per fiscal year, and $1 million of these credits must be set aside each year for workforce housing as defined in CHFA’s written procedures (i.e., affordable housing for low- and moderate-income wage or salaried workers in the municipalities where they work).

The bill also makes various conforming changes to the HTCC program.

Property Tax Assessment for Workforce Housing Opportunity Development Projects (§ 10) The bill requires assessors to determine the value of workforce housingopportunitydevelopmentprojectsforpropertytaxpurposesby using the capitalization of net income method based on actual rent received.

This means assessors must consider net rental income, rather than market rent for similar property, when determining the project’s gross potential income.

Under the capitalization of net income method, all else being equal, a property with a lower gross potential income will also have a lower valuation.

Under current law, assessors must consider three methods when assessing the fair market value of rental properties (with certain exceptions):

1.

replacement cost less depreciation, plus the land’s market value;

2.

capitalization of net income based on market rent for similar property;

and 3.

comparable sales.

For property tax assessment purposes, the bill treats workforce housing opportunity development projects the same as properties used solely for housing low- or moderate-income individuals and families located in municipalities that have chosen to abate property taxes on sSB4 / File No.

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203 these properties (CGS §§ 8-215 & 8-216a).

Building Permit Fee Exemption (§ 12) The bill exempts both categories of workforce housing development projects (i.e., workforce housing development and workforce housing opportunity development projects) from all building permit application fees.

In doing so, it supersedes any municipal charters, home rule ordinances, and special acts.

Local Option Property Tax Exemption and State Reimbursement (§§ 13 & 14) The bill allows a municipality’s legislative body (or board of selectmen if the legislative body is a town meeting) to provide up to a seven-year, 70% property tax exemption to the workforce housing development projects eligible for the HTCC credit.

Under the bill, the property tax exemption may begin in the first full assessment year after the project’s construction or rehabilitation is complete.

Additionally, the bill requires the Office of Policy and Management (OPM) secretary, beginning in FY 26, to pay a state grant in lieu of taxes to municipalities that (1) provide this local option exemption and (2) submit an annual grant application to OPM, as the secretary prescribes.

OPM must determine the amount due to these municipalities annually by January 1.

Under the bill, the grant in lieu of taxes equals 70% of the property taxes that would have been paid for the assessment year two years before the fiscal year in which the grant is paid (excluding exemptions for certain housing authority properties).

The grants are payable for a maximum of seven assessment years and may be reduced proportionately if the total of all grants in a fiscal year exceeds state appropriations for the grants.

CHFA Mortgage Assistance Program (§ 15) The bill requires CHFA to (1) develop and administer a mortgage sSB4 / File No.

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203 assistance program for developers of both categories of workforce housing projects under the bill (i.e., workforce housing development and workforce housing opportunity development) and (2) use any appropriate housing subsidies in providing this mortgage assistance.

DOH Workforce Housing Study (§ 16) The bill requires DOH to conduct a study, within available appropriations, on ways to (1) increase housing options for apprentices and newly hired employees and (2) enable this population to live in the municipalities where they work.

The DOH commissioner must submit a report to the Housing Committee, including recommendations and legislation necessary for implementation, by January 1, 2024.

Background — Opportunity Zones The federal Opportunity Zone program, created as part of the 2017 federalTaxCutsandJobsAct(P.L.115-97),isdesignedtospureconomic development and job creation in distressed communities by providing federal tax benefits for private investments in the zones.

The program’s tax benefits are available to investors that reinvest gains earned on prior investments in a qualified opportunity zone fund that invests in zone businesses.

Investors may receive additional tax benefits if they hold their investments in the fund for at least five, seven, or 10 years.

Connecticut has 72 opportunity zones in 27 municipalities that were approved by the U.S.

Treasury Department in 2018.

§§ 17 & 20 — PILOT GRANT PROGRAM FOR MULTI-FAMILY RETROFITTING PROJECTS IN ENVIRONMENTAL JUSTICE COMMUNITIES Requires the DEEP commissioner, in coordination with the DOH commissioner, to establish a pilot program providing grants for certain multi-family retrofitting projects that (1) improve energy efficiency or remediate health and safety concerns and (2) are undertaken in properties meeting certain requirements, including being located in an environmental justice community;

appropriates $600 million to DEEP for FY 24 from the General Fund for the program The bill requires the Department of Energy and Environmental Protection (DEEP) commissioner, in coordination with the DOH commissioner, to start a pilot program providing grants for retrofitting sSB4 / File No.

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203 projects in units located in multi-family homes built before 1980 and located in environmental justice communities (see Background).

These projects must improve a home’s energy efficiency (e.g., by installing heat pumps, solar power generating systems, improved roofing, storm doors and windows, and improved insulation) or remediate health and safety concerns (e.g., mold, vermiculite, asbestos, lead, and radon).

Under the bill, the DEEP commissioner must (1) begin accepting grant applications from owners of eligible units, in the form she specifies, by January 1, 2024, and (2) submit a report on the pilot programto theHousing Committee by October 1,2027,that (a)analyzes the program’s success and (b) recommends whether to make the program permanent, including any related legislative proposals.

The bill (1) appropriates $600 million to DEEP from the General Fund for FY 24 for the program and (2) requires the commissioner attempt to expend these pilot program funds equally on an annual basis for the program’s duration.

Under the bill, the pilot program terminates on September 30, 2028.

EFFECTIVE DATE:

October 1, 2023, except the FY 24 DEEP appropriation is effective July 1, 2023.

Eligibility Criteria and Priority Populations To be eligible for a grant under the pilot program, a dwelling unit must be:

1.

subject to a binding affordable housing deed restriction, which is filed on the municipality’s land record and requires that units be sold or rented only to low-income residents;

2.

not owner-occupied;

and 3.

currently occupied by a tenant, or will be occupied by a tenant within 180 days after the commissioner awards the owner a grant.

(The bill requires an owner to repay DEEP all grant funds he or she receives under the program if this criteria is not met.) sSB4 / File No.

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203 Under the bill, the DEEP commissioner must exclude from the program any landlords that have violated their statutory responsibilities.

It also requires the commissioner to prioritize grants that benefit current or prospective residents who are:

1.

low-income (i.e., households with an income of no more than 80% of the state or area median income, whichever is less, as determined by HUD);

2.

veterans;

3.

family violence victims (i.e., victims of (1) an incident between family or household members resulting in physical harm, bodily injury, or assault or (2) an act of threatened violence between family or household members causing fear of imminent physical harm, bodily injury, or assault);

or 4.

currently experiencing, or have previously experienced, homelessness.

(It is unclear how the DEEP commissioner would attain this information on current or prospective tenants.) Background Environmental Justice Communities By law, an “environmental justice community” is (1) any U.S.

census block group, as determined by the most recent census, for which at least 30% of the population consists of low-income people who are not institutionalized and have an income below 200% of the federal poverty level or (2) a distressed municipality (CGS § 22a-20a).

The Department of Economic and Community Development annually designates distressed municipalities, based on high unemployment and poverty, aging housing stock, and low or declining rates of job, population, and per capita income growth (CGS § 32-9p).

The current (2022) distressed municipalities are Ansonia, Bridgeport, Bristol, Chaplin, Derby, East Hartford, East Haven, Griswold, Groton, sSB4 / File No.

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203 Hartford, Meriden, Montville, New Britain, New London, North Stonington, Norwich, Plainfield, Putnam, Sprague, Sterling, Torrington, Waterbury, West Haven, Winchester, and Windham (CGS § 22a-20a).

Towns with current designated census blocks (that are not also distressed municipalities) are Bethel, Bloomfield, Branford, Brooklyn, Canaan, Clinton, Columbia, Coventry, Cromwell, Danbury, East Haddam, East Lyme, East Windsor, Ellington, Enfield, Essex, Fairfield, Farmington, Glastonbury, Greenwich, Haddam, Hamden, Killingly, Ledyard, Lisbon, Manchester, Mansfield, Middletown, Milford, Naugatuck, New Fairfield, New Haven, New Milford, Newington, North Canaan, Norwalk, Plainville, Portland, Preston, Ridgefield, Rocky Hill,Sharon,Shelton,Simsbury,Southington,Stafford,Stamford, Stonington, Stratford, Thomaston, Thompson, Vernon, Wallingford, Waterford, Watertown, West Hartford, Wethersfield, Willington, Windsor Locks, and Windsor.

§ 18 — DOH TEMPORARY HOUSING PILOT PROGRAM Requires DOH, within available appropriations, to establish a pilot program to provide temporary housing to individuals experiencing homelessness and veterans who need respite care The bill requires DOH, within available appropriations, to start a pilot program to provide temporary housing to individuals experiencing homelessness and veterans who need respite care.

Under the bill, the program must (1) be implemented in at least three municipalities with populations of 75,000 or more and (2) provide at least 20 housing units for eligible individuals in need of respite care due to injury or illness.

The bill requires the DOH commissioner to establish program eligibility criteria and allows the department to contract with nonprofit organizations to administer it.

The bill terminates the pilot program on January 1, 2025, by which time DOH must report on the pilot program to the Housing Committee.

EFFECTIVE DATE:

Upon passage sSB4 / File No.

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203 § 19 — TASK FORCE ON CONVERTING UNDERUTILIZED COMMERCIAL AND RETAIL PROPERTIES INTO AFFORDABLE HOUSING Establishes a 10-member task force to study converting underutilized commercial and retail properties into affordable housing and requires it to report to the Housing Committee by January 1, 2024 The bill establishes a 10-member task force to study converting underutilized commercial and retail properties (e.g., shopping malls, hotels, and warehouses) into affordable housing.

EFFECTIVE DATE:

Upon passage Membership, Initial Appointments, and Vacancies Under the bill, the task force members must include the DOH and Department of Economic and Community Development commissioners, or their designees, and eight members whom the legislative leaders appoint, as shown in the table below.

The legislative appointees may be General Assembly members.

The legislative leaders must make the initial task force appointments no later than 30 daysafter the bill’s passage, and appointing authorities fill vacancies.

Table:

Task Force Members — Legislative Appointees Appointing Number of Required Qualifications Authority Appointments House speaker 2 One must represent an affordable housing advocacy organization Senate president 2 One must represent a community pro tempore development corporation House majority 1 None leader Senate majority 1 None leader House minority 1 Must represent retail or commercial leader property owners Senate minority 1 Must represent a local chamber of leader commerce sSB4 / File No.

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203 Chairpersons, Meetings, and Reporting Requirement The bill requires the House speaker and Senate president pro tempore to select the task force chairpersons.

The chairpersons must schedule the task force’s first meeting for no later than 60 days after the bill’s passage.

The bill requires the task force, by January 1, 2024, to report on its findings and recommendations to the Housing Committee.

The task force terminates when it submits this report or January 1, 2024, whichever is later.

The Housing Committee’s administrative staff must serve as the task force’s administrative staff.

COMMITTEE ACTION Housing Committee Joint Favorable Substitute Yea 10 Nay 5 (03/02/2023) sSB4 / File No.

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