Researcher: JS Page 1 3/29/22
OLR Bill Analysis
sHB 5168
AN ACT CONCERNING PROPERTY TAX EXEMPTIONS FOR
PROPERTY USED FOR CHARITABLE PURPOSES.
SUMMARY
This bill:
1. expands the type of housing owned by federally tax-exempt,
charitable organizations that is exempt from state property tax (§
1);
2. specifies that government payments for the treatment, support,
or care of individuals housed in a property are not government
housing subsidies that disqualify a property for a tax exemption
(§ 1);
3. requires assessors to record their reasons for denying property
tax exemptions for certain nonprofit organizations (§ 2);
4. standardizes the form that organizations must file every four
years to claim a property tax exemption (i.e., tax-exempt filings)
and requires assessors to post the form on their website (§§ 1 &
2); and
5. specifies that certain denials of tax exemptions for charitable
properties can be appealed directly to the Superior Court, like
other eligible appeals, and authorizes the court to award
attorney’s fees, in addition to other relief, in these actions (§ 3).
It also makes technical and conforming changes.
EFFECTIVE DATE: October 1, 2022, and applicable to assessment
years starting on and after that date, except the provisions requiring a
standard exemption form and assessors to record their rationale for
exemption denials are effective July 1, 2022. 2022HB-05168-R000177-BA.DOCX
Researcher: JS Page 2 3/29/22
§ 1 — TAX-EXEMPT CHARITABLE HOUSING
Temporary Housing
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. The exemption
is for structures used mainly for one or more of these temporary housing
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 above regardless of how long people stay in
them.
Subsidized Housing
Under existing law, housing that is partially or entirely funded by
government subsidies is not a charitable purpose and is ineligible for
the property tax exemption. The bill specifies 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) are not subsidies. So, these
payments do not, by themselves, make a property ineligible for the
property tax exemption under the bill.
§§ 1 & 2 — EXEMPTION FILINGS AND DENIALS 2022HB-05168-R000177-BA.DOCX
Researcher: JS Page 3 3/29/22
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.
The bill also shifts responsibility for providing the tax-exempt filing
form from each assessor to the Office of Policy and Management (OPM).
Under the bill, OPM must develop the form by September 1, 2022, for
use beginning in the next assessment year (i.e., October 1, 2022), in
consultation with the Connecticut Community Nonprofit Alliance and
Connecticut Association of Assessing Officers. The form must have
instructions on how assessors determine whether a property is tax
exempt and assessors must post the form on their websites.
§ 3 — ASSESSORS’ DENIAL OF EXEMPTIONS
The bill specifies that a charitable property’s owner can appeal a tax
exemption denial directly to Superior Court, without first appealing to
the board of assessment appeals, on the basis that the assessor’s reasons
for denying the exemption conflict with exemption eligibility laws.
Existing law allows taxpayers to bring certain property tax claims
directly to Superior Court, including claims that taxes were wrongfully
laid on property that is not taxable. As with these other claims, the bill
authorizes the court to award relief in the form and manner justice and
equity requires, including court costs at its discretion. However, for
charitable property exemption denials, the court can also award
attorney’s fees under the bill.
Under both existing law and the bill:
1. appeals must be filed within one year from the town’s last denial
or determination, 2022HB-05168-R000177-BA.DOCX
Researcher: JS Page 4 3/29/22
2. service and returns must be done in the same manner as civil
action summons,
3. appeals do not suspend any town action to collect the tax, and
4. towns must refund the taxpayer for any overpayments the court
finds.
COMMITTEE ACTION
Planning and Development Committee
Joint Favorable
Yea 26 Nay 0 (03/11/2022)