HLS 14RS-307 ORIGINAL
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2014
HOUSE BILL NO. 420
BY REPRESENTATIVE PEARSON
TAX/AD VALOREM TAX: Establishes criteria for valuation of low-income housing
property for purposes of assessment of ad valorem taxes
AN ACT1
To amend and reenact R.S. 47:2323(C)(3) and to enact R.S. 47:2323(E), relative to ad2
valorem taxation; to provide with respect to the valuation of low-income housing3
property for purposes of assessment; to require the use of certain criteria in the4
determination of fair market value; to provide for effectiveness; and to provide for5
related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 47:2323(C)(3) is hereby amended and reenacted and R.S. 47:2323(E)8
is hereby enacted to read as follows: 9
ยง2323. Criteria for determining fair market value; real and personal property;10
unoccupied residential immovable property11
* * *12
C. Criteria.13
The fair market value of real and personal property shall be determined by14
the following generally recognized appraisal procedures: the market approach, the15
cost approach, and/or the income approach.16
* * *17
(3) In utilizing the income approach, the assessor shall use an appraisal18
technique in which the anticipated net income is processed capitalized to indicate the19
capital amount of the investment which produces the net income.20
* * *21 HLS 14RS-307 ORIGINAL
HB NO. 420
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are additions.
E. All benefits and burdens of ownership shall be reflected in the1
calculation of anticipated net income for purposes of determining the fair market2
value of low-income housing property. Benefits shall include but not be limited to3
any of the following: federal income tax credits available under Section 42 of the4
Internal Revenue Code; below market interest rate on financing obtained under the5
Homes Investment Partnership Program under the Cranston-Gonzales National6
Affordable Housing Act or the Federal Home Loan Bank Affordable Housing7
Program established pursuant to the Financial Institution Reform, Recovery and8
Enforcement Act of 1989; any other federal, state, or similar program intended to9
provide affordable housing to persons of low or moderate income and requiring10
restricted occupancy and rental rates based on the income of the persons occupying11
such housing.12
Section 2. This Act shall become effective on January 1, 2015.13
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Pearson HB No. 420
Abstract: Requires that all benefits and burdens of ownership of certain low-income
housing property be included in the calculation of anticipated net income used in the
valuation of such property for purposes of ad valorem tax assessment.
Present constitution requires the assessment of property for purposes of ad valorem taxation.
The assessed value of a property is based on a percentage of the property's fair market value.
Present law requires that uniform criteria be used by assessors in the determination of fair
market value for real and personal property. Fair market value is determined by using the
following generally recognized appraisal procedures: the market approach, the cost
approach, and/or the income approach.
Present law requires that in using the income approach, an assessor shall use an appraisal
technique in which the anticipated net income is processed to indicate the capital amount of
the investment which produces the net income.
Proposed law retains present law but specifies that the anticipated net income is "capitalized"
rather than "processed".
Proposed law requires that all benefits and burdens of ownership be reflected in the
calculation of anticipated net income for purposes of determining the value of low-income
housing property. Benefits shall include federal income tax credits available under federal
law; below market interest rate on financing obtained under the Homes Investment HLS 14RS-307 ORIGINAL
HB NO. 420
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are additions.
Partnership Program under the Cranston-Gonzales National Affordable Housing Act or the
Federal Home Loan Bank Affordable Housing Program established pursuant to federal law;
or, any other federal, state, or similar program intended to provide low-income housing with
restricted occupancy and rental rates.
Effective Jan. 1, 2015.
(Amends R.S. 47:2323(C)(3); Adds R.S. 47:2323(E))