This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0401c.SAC
DATE: 2/4/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 401 Ad Valorem Tax Exemption for Affordable Housing and Nonprofit Homes
SPONSOR(S): Local Administration & Veterans Affairs Subcommittee, Smith, D. and others
TIED BILLS: IDEN./SIM. BILLS: SB 362
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration & Veterans Affairs
Subcommittee
16 Y, 0 N, As CS Leshko Miller
2) Ways & Means Committee 15 Y, 0 N Davis Aldridge
3) State Affairs Committee Leshko Williamson
SUMMARY ANALYSIS
Florida law exempts from ad valorem taxation property used as a home for the aged by certain non-profit
corporations, if at least 75 percent of the occupants of the facility are over the age of 62 or totally and
permanently disabled. The exemption also applies to the extent these properties are used exclusively for the
conduct of religious services or rendering nursing or medical services.
Individual units and apartments in such a facility may be exempt from ad valorem taxation if the units or
apartments are reserved for, restricted to, or actually occupied by a permanent resident of the state who is at
least 62 years of age or totally and permanently disabled and who meets certain income qualifications.
The bill revises eligibility for the ad valorem tax exemption for property used as a home for the aged by non-
profit corporations to include property owned by a Florida limited partnership where an entity wholly owned by
a corporation not-for-profit under ch. 617, F.S., is the sole general partner.
The Revenue Estimating Conference estimates the provisions of the bill will reduce local government revenue
by $100,000 annually beginning in fiscal year 2022-23.
STORAGE NAME: h0401c.SAC PAGE: 2
DATE: 2/4/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Exemption for Property Used by Nonprofit Homes for the Aged
Florida law exempts from ad valorem taxation property used as a home for the aged by certain non-
profit corporations.
1
In order to qualify for the exemption, the following criteria must be met:
The applicant for exemption must be qualified as a 501(c)(3) exempt charitable organization
under federal law by January 1 of the year it requests to be exempt from Florida ad valorem
taxation and be either:
o A corporation not-for-profit pursuant to ch. 617, F.S.; or
o A Florida limited partnership, the sole general partner of which is a corporation not-for-
profit pursuant to ch. 617, F.S.;
75 percent of the occupants of the facility must be over the age of 62 or be totally and
permanently disabled; and
Certain facilities must acquire licensing by the Agency for Health Care Administration.
2
Upon sufficient proof that the applicant meets the above criteria, the property appraiser will exempt the
portions of the facility devoted exclusively to the conduct of religious services or the rendering of
nursing or medical services.
3
In addition, the property appraiser may exempt individual units or
apartments in the facility if residency in those units or apartments is reserved for or restricted to, or the
unit or apartment is occupied by, a permanent resident of the state who is:
An individual with a gross income
4
of no more than $34,374
5
per year who is at least 62 years of
age or is totally and permanently disabled;
A couple with a combined gross income of no more than $38,590 per year, or the surviving
spouse of such a couple if the surviving spouse lived with the deceased at the time of the
deceased’s death in a home for the aged, at least one of whom must be at least 62 years of age
or is totally and permanently disabled; or
A totally and permanently disabled veteran who meets the requirements of s. 196.081, F.S.
6
If any portion of the facility is used for a non-exempt purpose, those portions may be valued and placed
upon the tax rolls separately from any portion entitled to the exemption.
7
Common areas of the home
are exempt from taxation as long as at least 25 percent of the units or apartments of the home are
restricted to or are occupied by persons who meet the income requirements.
8
1
Fla. Const. ss. 3(a), 6(c), art. VII, implemented by s. 196.1975, F.S.
2
Ss. 196.1975(1)-(2), F.S. Licensure by the Agency for Health Care Administration is required for facilities that furnish
medical facilities or nursing services to residents or that qualifies as an assisted living facility under ch. 429, F.S. Ss.
196.1975(2)(a)-(b), F.S.
3
S. 196.1975(3), F.S.
4
Social security benefits are considered gross income for the purposes of this exemption. S. 196.1975(6), F.S.
5
S. 196.1975(4)(b), F.S. The income requirements will be adjusted January 2022.
6
S. 196.1975(4)(a), F.S. Statute defines the maximum income limitation as $7,200 (for individuals) or $8,000 (for couples)
in the year the provision was passed (1977), adjusted annually by the percentage change in U.S. Department of Labor’s
cost-of-living index. See s. 196.1975(4)(a)-(b). The values above reflect those present adjustments for 2021. Fla. Dept. of
Revenue, Cost of Living Adjustments, https://floridarevenue.com/property/Documents/CostofLivingAdjust.pdf (last
accessed Jan. 10, 2022).
7
S. 196.1975(11), F.S.
8
S. 196.1975(8), F.S. STORAGE NAME: h0401c.SAC PAGE: 3
DATE: 2/4/2022
The facility must file an application annually with the property appraiser to demonstrate continuing
qualification for the exemption
9
and file an affidavit from each person residing in a unit or apartment in
the facility who meets the disability or income requirements described above.
10
The person signing the
affidavit must attest that he or she resides in the unit or apartment claiming the exemption and, in good
faith, makes that unit or apartment his or her permanent residence.
11
Effect of Proposed Changes
The bill revises eligibility for the ad valorem tax exemption for property used as a home for the aged by
non-profit corporations to include property owned by a Florida limited partnership where an entity
wholly owned by a corporation not-for-profit under ch. 617, F.S., is the sole general partner.
B. SECTION DIRECTORY:
Section 1: Amends s. 196.1975, F.S., revising criteria for the ad valorem taxation exemption for
property used by non-profit homes for the aged.
Section 2: Provides an effective date of January 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimates the provisions of the bill will reduce local
government revenue by $100,000 annually beginning in fiscal year 2022-23.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may enable additional homes for the aged operated by not-for-profit corporations to qualify for
the ad valorem tax exemption.
D. FISCAL COMMENTS:
None.
III. COMMENTS
9
S. 196.1975(9)(b), F.S. This application is known as a DR-504HA form. Fla. Dept. of Revenue, Property Tax Oversight
Forms, https://floridarevenue.com/property/pages/forms.aspx (last accessed Mar. 4, 2021).
10
S. 196.1975(9)(b), F.S. This application is known as a DR-504S form.
11
Id. STORAGE NAME: h0401c.SAC PAGE: 4
DATE: 2/4/2022
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, s. 18 of the Florida Constitution may apply
because this bill reduces ad valorem tax revenues to the extent it may enable additional homes for
the aged operated by non-for-profit corporations to qualify for an ad valorem tax exemption.
However, an exemption may apply if the fiscal impact of the bill is insignificant.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither provides authority for nor requires rulemaking by executive branch agencies.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 19, 2022 the Local Administration & Veterans Affairs Subcommittee adopted a proposed
committee substitute (PCS) and reported the bill favorably as a committee substitute. The PCS removed
changes to s. 193.017, F.S., from the bill.
This analysis is drafted to the committee substitute adopted by the Local Administration & Veterans Affairs
Subcommittee.