Researcher: JS Page 1 4/14/22
OLR Bill Analysis
sHB 5168 (as amended by House "A")*
AN ACT CONCERNING PROPERTY TAX EXEMPTIONS FOR
PROPERTY USED FOR CHARITABLE PURPOSES.
SUMMARY
This bill:
1. eliminates a restriction on the type of housing owned by federally
tax-exempt, charitable organizations that is exempt from the
property tax, making various types of housing for vulnerable
populations exempt even if it is not temporary housing;
2. requires assessors to record their reasons for denying property
tax exemptions for certain nonprofit organizations; and
3. requires assessors to post on their website the form that
organizations must file every four years to claim a property tax
exemption (i.e., tax-exempt filings).
It also makes technical and conforming changes.
*House Amendment “A” removes from the underlying bill (1) a
requirement that the Office of Policy and Management develop a
standardized tax-exempt filing form, (2) authorization to appeal certain
denials of tax exemptions for charitable properties directly to the
Superior Court, and (3) the court’s ability to award attorney’s fees in
those appeals.
EFFECTIVE DATE: October 1, 2022, except the provision on
recording the rational for a denial is effective July 1, 2022 (§ 2), and the
bill’s provisions are applicable to assessment years starting on and after
October 1, 2022.
TAX-EXEMPT CHARITABLE HOUSING
Current law exempts from property tax certain housing owned by, or 2022HB-05168-R01-BA.DOCX
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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 specified temporary housing. The exemption is for property
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 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) are not subsidies.
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 2022HB-05168-R01-BA.DOCX
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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.
COMMITTEE ACTION
Planning and Development Committee
Joint Favorable
Yea 26 Nay 0 (03/11/2022)