HB455 Alabama 2014 Session

Summary

Primary Sponsor

Oliver Robinson

Democrat

Session

Regular Session 2014

Title

Real property, affordable rental housing, appraisal of certain Class II property having restrictions by law or covenant must take into account net operating income based on restrictions, requiring Revenue Department to adopt rules to implement

Summary

HB455 would change how Alabama taxes Class II affordable rental housing by requiring valuations to reflect restricted net operating income using Department of Revenue–established capitalization rates, with implementing rules to follow.

What This Bill Does

For ad valorem tax purposes, valuations of Class II affordable rental housing must be based on actual net operating income and capitalization rates set by the Department of Revenue, considering the impact of occupancy and rental restrictions. Tax assessors must consider the legal restrictions and covenants on occupancy and rents, and generally cannot count federal or state tax credits in the appraisal unless they are directly used to offset taxes by the owner. The Department of Revenue would issue rules to implement these changes, and property owners would be required to provide annual NOI and subsidy information to support valuations.

Who It Affects

• Owners and operators of Class II affordable rental housing, whose property tax valuations would reflect restricted net operating income and who must provide annual NOI and subsidy information.
• County tax assessors, boards of equalization, and Department of Revenue staff responsible for ad valorem valuations, who must apply the new valuation method and determine annual capitalization rates.

Key Provisions

• Class II affordable rental housing valuations as of Oct 1 each year must use actual net operating income and capitalization rates determined annually by the Department of Revenue, adjusted for the impact of rental restrictions.
• Assessors must consider all applicable occupancy and rental restrictions on value, and generally must exclude the value of federal/state tax credits from the appraisal except where directly used to offset taxes by the titleholders.
• The ad valorem tax status of tax credits is clarified; credits are not counted in value or income for valuation unless used to offset taxes by the owners who hold title.
• The Department of Revenue must promulgate rules to implement the act and determine annual capitalization rates.
• Owners of Class II property must file an accurate NOI statement and sworn subsidy disclosures by October 1 each year to support valuations.
• Definitions establish affordable rental housing and seven-year duration for rental restrictions, including federal programs (Section 42, HOME, Section 8) and covenants running with the land.
• The act applies to assessments beginning October 1, 2014, with provisions for reviewing pre-2014 valuations that have not yet become final.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Ad Valorem Tax