SB 880 — AN ACT CONCERNING PAYMENTS IN LIEU OF TAXES TO MUNICIPALITIES FOR HOUSING AUTHORITIES.

Senate General Assembly RaisedFile Bill No.

880111 January Session, 2021 LCOSenate Bill No.

2725880 ReferredSenate, toMarch 23, 2021 The Committee on HOUSINGHousing Introducedreported by:through SEN.

(HSG)LOPES ANof ACTthe CONCERNING6th PAYMENTSDist., INChairperson LIEUof OFthe TAXESCommittee TOon MUNICIPALITIESthe FORpart HOUSINGof AUTHORITIES.the Senate, that the bill ought to pass.

AN ACT CONCERNING PAYMENTS IN LIEU OF TAXES TO MUNICIPALITIES FOR HOUSING AUTHORITIES.

(b) On or before January first, annually, the Secretary of the Office of Policy and Management shall determine the amount due to each municipality in the state, in accordance with this section, as a state grant in lieu of taxes with respect to real property and improvements on such propertySB880 owned/ orFile leased by any housing authority for affordable LCO 2725 \\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-00880-R01 of 2 SB.docx Raised Bill No.

880111 housing1 purposesSB880 toFile receiveNo. payments in lieu of taxes for such property and improvements, exclusive of any such property operated by the federal government.

111 property owned or leased by any housing authority for affordable housing purposes to receive payments in lieu of taxes for such property and improvements, exclusive of any such property operated by the federal government.

Section 1 October 1, 2021 New section HSG Joint Favorable LCOSB880 2725/ {\\PRDFS1\SCOUSERS\FORZANOF\WS\2021SB-00880-2File ofNo. 2 R01-SB.docx }

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111 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 22 $ FY 23 $ The Out Years Policy & Mgmt., GF - Cost None None Potential Off.

Note:

GF=General Fund Municipal Impact:

Municipalities Effect FY 22 $ FY 23 $ The Out Years Various Revenue None None Potential Municipalities Gain Explanation The bill results in a potential revenue gain to certain municipalities, and a corresponding cost to the Office of Policy and Management, by establishing a PILOT grant to municipalities for exempt state and local housing authority property.

The bill requires these grants to first be made in FY 24.

The bill requires OPM to make grants equal to 77% of the revenue loss to municipalities where these properties are located.

However, the bill also specifies that 1) the grants can be proportionately reduced if appropriations are insufficient to fully fund, and 2) a municipality is ineligible for a grant if it currently receives any kind of payment pursuant to an agreement with a housing authority.

As a result, any revenue gain to municipalities, and cost to OPM, will vary significantly based on appropriation level and on the terms of any agreement a SB880 / File No.

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111 municipality has with a housing authority.

As an illustration, the chart below shows the estimated revenue loss, and PILOT payment, to four municipalities under the bill's provisions assuming they would be eligible to receive such payment.

It is not known if they are currently receiving any funding from a housing authority which would disqualify them from the PILOT established by the bill.

Illustration of Impact in Various Towns Est.

FY 21 Est.

FY 21 Town Revenue PILOT $ Loss $ Danbury 567,887 437,273 Manchester 494,901 381,074 Groton 186,237 143,402 North Haven 88,753 68,340 The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to funding levels for the PILOT grant established by the bill.

SB880 / File No.

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111 OLR Bill Analysis SB 880 AN ACT CONCERNING PAYMENTS IN LIEU OF TAXES TO MUNICIPALITIES FOR HOUSING AUTHORITIES.

SUMMARY This bill establishes a payment in lieu of taxes (PILOT) program to provide state grants to municipalities in which local housing authorities own or lease tax-exempt real property for affordable housing purposes.

With certain exceptions, the bill sets the annual grant amount due to municipalities beginning in FY 24 at 77% of the property taxes that would have been due if the property was taxable.

The Office of Policy and Management (OPM) secretary must proportionally reduce these PILOT grants if there is insufficient program funding.

Under the bill, grant-eligible “municipalities” are towns, consolidated towns and cities, consolidated towns and boroughs, boroughs, special taxing districts, and unconsolidated cities.

EFFECTIVE DATE:

October 1, 2021 ELIGIBLE PROPERTIES AND MUNICIPALITIES Under the bill, PILOT grant eligible properties must be owned or leased by local housing authorities (or regional housing authorities or the State Housing Authority, if they acquire or lease property in the future).

The bill specifies that PILOT grants do not reimburse municipalities for lost revenue for properties operated by the federal government.

The bill makes a municipality ineligible for the new PILOT grant if it isreceiving guaranteedpaymentsunder a contract withtheDepartment of Housing (DOH) for reimbursement through the existing Payment in Lieu of Taxes Subsidy Program (see BACKGROUND).