SB379 Alabama 2014 Session

Summary

Primary Sponsor

J.T. WaggonerSenator

Republican

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

SB379 changes how Alabama taxes Class II affordable rental housing by basing value on net operating income with Dept. of Revenue–determined capitalization rates, taking restrictions into account, and clarifying tax credit treatment.

What This Bill Does

Valuations for ad valorem taxes on Class II affordable rental housing, as of October 1 each year starting in 2014, must reflect the property's actual net operating income capitalized at market rates set annually by the Department of Revenue, adjusted for any occupancy/rental restrictions. Tax assessors and related officials must consider those restrictions and exclude most federal or state income tax credits from the value, except in limited circumstances where credits are directly used by the property owner. Property owners must provide annual income data and disclose any subsidies or credits used to offset costs, and the Department of Revenue must issue implements rules and determine capitalization rates to use in these valuations.

Who It Affects

• County tax assessors, boards of equalization, and Department of Revenue staff who determine and apply ad valorem valuations for Class II affordable rental housing.
• Owners of Class II affordable rental housing, who must report annual income figures and disclose subsidies/credits, with tax credits treated only under specified conditions.

Key Provisions

• Valuation of Class II affordable rental housing must reflect actual net operating income, capitalized at annually determined market capitalization rates by the Department of Revenue, and adjusted for the impact of occupancy/rental restrictions.
• Assessors must consider all applicable legal restrictions and covenants on occupancy and rentals, and must not include most federal or state income tax credits in the appraisal value, except where credits are directly used by the titleholder to offset taxes.
• The Department of Revenue must annually determine capitalization rates and promulgate rules to implement these valuation methods.
• Owners of Class II affordable rental housing must provide an annual, GAAP-based statement of gross and net operating income and disclose subsidies/credits used to offset costs as of October 1 each year.
• The act applies to valuations as of October 1, 2014 and later, with provisions for credit treatment and appraisal methods influencing appeals and final determinations.

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