Researcher: JSB Page 1 3/23/21
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 is receiving guaranteed payments under a contract with the
Department of Housing (DOH) for reimbursement through the
existing Payment in Lieu of Taxes Subsidy Program (see 2021SB-00880-R000111-BA.DOCX
Researcher: JSB Page 2 3/23/21
BACKGROUND).
PILOT GRANT AMOUNT
The bill requires the OPM secretary to annually determine the
amount due to each municipality for the upcoming fiscal year by
January 1. The first grants must be paid in FY 24 (i.e., the fiscal year
beginning July 1, 2023), and continue each fiscal year after that.
The OPM secretary must calculate the grant amount based on the
assessment year from two years prior. (For the determination due on
January 1, 2023, she must use October 1, 2021, assessment year data).
(Presumably, OPM would determine the amounts due base d on
assessment data reported by the municipalities, but the bill does not
establish a reporting process.)
BACKGROUND
Payment in Lieu of Taxes Subsidy Program
Under existing law, tax-exempt state-financed housing authorities
for moderate rental housing projects must make payments to
municipalities in lieu of paying property taxes, special benefit
assessments, and sewer system use charges (CGS § 8-71). The law
authorizes DOH to make payments on authorities' behalf as part of its
subsidy program, pursuant to contracts between the state,
municipalities, and housing authorities (CGS § 8-216).
COMMITTEE ACTION
Housing Committee
Joint Favorable
Yea 13 Nay 2 (03/09/2021)