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)]
HB 682 Original 2015 Regular Session Kleckley
Abstract: Establishes guidelines for use by an assessor in the valuation of affordable rental housing
for purposes of ad valorem property 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 an assessor in the determination of fair market
value for real and personal property. Fair market value is determined by using any of the following
generally recognized appraisal procedures: the market approach, the cost approach, or the income
approach.
Proposed law establishes the following guidelines to be used by an assessor in determining the fair
market value of affordable rental housing:
(1)The income method of valuation shall be used, with application of the income method based
upon the actual rental income from rent-restricted units.
(2)Tax credits and financing upon terms more favorable than market terms shall be excluded
from the valuation.
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 requires the La. Tax Commission to establish the capitalization rate to be used in
applying the income approach to valuation.
Proposed law defines "affordable rental housing" as residential housing consisting of one or more
rental units, the construction and rental of which are subject to the requirements of the federal low-
income housing tax credit, and which may have participated in other federal or state low income
housing program benefits.
Effective Jan. 1, 2016.
(Adds R.S. 47:2323(E))