HB458 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

HB458 changes how ad valorem taxes are calculated for Class II affordable rental housing by requiring appraisal values to reflect net operating income from occupancy restrictions, with rules and annual capitalization rates set by the Department of Revenue.

What This Bill Does

As of October 1 each year, it requires the fair market value for tax purposes to be based on the property's actual net operating income, capitalized at market rates determined annually by the Department of Revenue and adjusted for any rental restrictions. It requires tax assessors and boards of equalization to consider legal occupancy and rent restrictions and covenants, and to exclude most federal or state tax credits from the appraisal value except in specific cases. It clarifies the tax treatment of tax credits, and directs the Department of Revenue to issue rules to implement these changes.

Who It Affects

• County tax assessors, county boards of equalization, and Department of Revenue staff who value Class II affordable rental housing and must apply the new income-based method.
• Owners of Class II affordable rental housing who must provide annual income and subsidy information to support valuations.

Key Provisions

• Appraisals for Class II affordable rental housing must use actual net operating income, capitalized at DoR-determined market capitalization rates each year, as of October 1.
• Assessors must consider all applicable occupancy and rental restrictions and covenants; government grants or subsidies are generally not counted in the appraised value, and the replacement cost approach is limited unless it yields a lower value than the income approach.
• Federal or state income tax credits related to the property shall not be included in the appraisal value or counted as income for valuation, except when credits are directly used to offset the owner’s taxes.
• The Department of Revenue must promulgate rules to implement the act and annually determine capitalization rates for use in valuations.
• Property owners must submit an annual statement of actual gross and net operating income, with sworn disclosures about subsidies or credits used to offset costs, by October 1 each year.

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