| Chairman
Linda W. Cropp
A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
To amend Chapter 8 of Title 47 of the District of Columbia Code to reduce
increased property tax liability by 50% during the first 10 years for
eligible real property in eligible areas, to reduce increased property tax
liability by 75% during the first 10 years for all new mixed-income
housing developments in which 10% of the units are occupied by low and
moderate income households, to reduce the property tax liability by 100%
during the first 10 years for all new mixed-income housing developments in
which 20% of the units are occupied by low and moderate income households,
and to provide tax relief to new homeowners in enterprise zones; and to
amend section 802 of the Rental Housing Amendment Act of 1985 to make
conforming amendments.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act
may be cited as the "Downtown Housing Production Tax Incentives Act
of 2001 ".
Sec. 2. Title 47 of the District of Columbia Code is amended as
follows:
(a) The Table of Contents for Chapter 8, Subchapter II, is amended by
adding at the end three new sections: " 47-857. Tax abatements for
eligible residential developments and new homeowners in enterprise zones
-- Definitions."; "47-858. Same - Requirements for tax
abatements."; and "47-859. Same - Rules and regulations.".
(b) A new section 47-857 is added to read as follows:
"47-857. Tax abatements for eligible residential developments
and new homeowners in enterprise zones - Definitions.
"For the purposes of sections 47-857 and 47-858, the term:
"(a)
"Affordable" means rents or housing payments not greater than
30% of household income.
"(b)
"AMI" means the area median income for the Washington
Metropolitan Standard Statistical Area, as periodically defined by the
U.S. Department of Housing and Urban Development.
"(c) "Base
year" means the taxable year immediately preceding the tax year in
which an abatement under this section is first provided.
"(d)
"Current tax year" means the tax year in which the tax
abatement sought under D.C. Code §47-858 would be granted.
"(e)
"Eligible area" means: "Housing Priority Area A" as
described in the regulations governing the Downtown Development District
in section 1706 of the Zoning Regulations of the District of Columbia
(11 DCMR §1706); or the "Downtown" area as defined in section
199 of the Comprehensive Plan for the National Capital (10 DCMR 199) and
shown on the District of Columbia Generalized Land Use Policies Map.
"(f)
"Eligible real property" means real property that:
"(1) Is taxed
as Class 1 Property, as defined in D.C. Code §47-813;
"(2) Is
improved by new structures or substantial
rehabilitation (as defined in Chapter 3 of the Comprehensive Plan
for the National Capital Area); and
"(3) Has 10 or
more units devoted to residential uses.;
"(g)
"Enterprise zone" means an area within the District that has
been designated as the District of Columbia Enterprise Zone pursuant to
Subchapter W of Chapter 1 of the Internal Revenue Code of
1986, approved Aug. 5, 1997 (111 Stat. 863; 26 U.S.C. § 1400 et seq.
(Supp. 2000)).
"(h) "Low
income household" means a household consisting of 1 or more
individuals with a total income equal to 60% or less of the AMI.
"(i)
"Mixed income housing developments" means eligible real
property where at least 10% of all units are affordable to low and
moderate income households and at least 50% of these units are
affordable to low income households.
"(j)
"Moderate income household" means a household consisting of 1
or more individuals with a total income equal to between 60% and 80% of
the AML".
(c) A new section
47-858 is added to read as follows:
"47-858.
Same - Requirements for tax abatements.
"(a)
In order to be eligible for a tax abatement under this section, an
applicant must:
"(1) Apply for the tax abatement before the first
day of the tax year for which the abatement is sought; and
"(2) Receive a building permit for the property
for which abatement has been awarded within 180 days of being awarded
the tax abatement, or have already received a building permit after
March 30, 2001, for the property for which an abatement application
has been made.
"(b) Real property tax liability shall be reduced
by an amount equal to 50% of the amount by which the tax liability for
the property increased between the base year and the current tax year
for the first 10 years beginning after the date that a certificate of
occupancy was issued for eligible real property in eligible areas.
"(c) Real
property tax liability shall be reduced by an amount equal to 75% of the
amount by which the tax liability for the property increased between the
base year and the current tax year for the first 10 years
beginning after the date that a certificate of occupancy was issued for
new mixed-income housing developments in which 10% of the units are
occupied by low and moderate income households, provided that the
property is maintained as a mixed-income housing development for the
next consecutive 20 years.
"(d) Real
property tax liability shall be reduced by an amount equal to 100% of
the amount by which the tax liability for the property increased between
the base year and the current tax year for the first 10 years beginning
after the date that a certificate of occupancy was issued for new
mixed-income housing developments in which 20% of the units are occupied
by low and moderate income households, provided that the property is
maintained as a mixed-income housing development for the next
consecutive 20 years.
"(e) With
respect to subsections (b), (c), (d) of this section, if at any time
fewer than 10 units are devoted to residential use, then the provisions
of this subsection shall become inapplicable and there shall be no
reduction in the property tax liability.
"(f) In order
to be eligible for the tax relief provided by subsections (c) and (d) of
this section, units occupied by low and moderate income households must
be equivalent in size and quality to other units in the development.
"(g) A
homeowner who purchases and substantially rehabilitates a home in an
enterprise zone after the effective date of this title and prior to
October 1, 2007 shall receive a tax reduction equal to 50% of the amount
by which the tax liability for the property increased as a result of the
rehabilitation for the first 5 years after the rehabilitation was
completed, provided that the homeowner or one or more members of the
homeowner's household uses the home as his or her principal residence.
Taxes for succeeding years shall be increased by increments of 10% of
the full tax liability, until the time that full liability, absent this
provision, is reached. The property tax liability shall only be reduced
while the homeowner or one or more members of the homeowner's household
maintains the property as his or her principal residence.
"(h) In order
to be eligible for the tax relief provided by subsections (b), (c), (d),
and (g), the Mayor may require the owner to certify, in the form and by
the time prescribed by the Mayor, averring, under penalty of perjury,
that the owner has satisfied all the requirements applicable to the
receipt of the real property tax relief provided by the applicable
subsection.
"(i) If, after
taxes have been abated under the terms of subsections (c) and (d), the
property is not maintained as a mixed-income housing development as
required by the applicable subsection, then the owner shall be assessed
a penalty of $10,000 per year for each unit that is not affordable to
low or moderate income households. A penalty shall not be imposed when a
property is transferred to a new owner who continues to use the property
in a manner that satisfies the requirements of the applicable
subsection. The Mayor shall waive the penalty if the housing development
is destroyed by an act of God and may waive the penalty upon a showing
of good cause.
"(j) The
provisions of this section shall be inapplicable to any person who, or
any property which, receives any benefits from the Tax Increment
Financing Authorization Act of 1998, effective September 11, 1998 (D.C.
Law 12-143; D.C. Code § 1-2293 et seq.).
"(k) This
section shall not affect the right of a real property owner to appeal
from the assessment of any new structures or substantial rehabilitation
pursuant to section 426a of the District of Columbia Real Property Tax
Revision Act of 1974, effective March 17, 1993 (D.C. Law 9-241; D.C.
Code § 47-825.1).".
(d) A new section
47-859 is added to read as follows:
"47-859. Same
- Rules and Regulations.
"The Mayor
shall promulgate such rules and regulations as may be necessary for the
proper implementation and administration of §§47-857 and 47-858 within
180 days of the effective date.".
Sec. 3. Tax Abatement
Cap.
(a) During the tax
years 2002, 2003, and 2004, the Mayor may approve up to:
(1) $750,000 worth
of new tax abatement each year, for eligible real property located in
Housing Priority A, pursuant to D.C. Code § 47-858(b);
(2) $500,000 worth
of new tax abatement each year pursuant to D.C. Code §47-858(c);
(3) $500,000 worth
of new tax abatement each year pursuant to D.C. Code §47-858(d); and
(4) $125,000 worth
of new tax abatement pursuant to D.C. Code § 47-858(g).
(b) In addition to
the tax abatements provided in subsection (a), during the tax years 2002,
2003, and 2004, the Mayor may approve up to $2,500,000 in total annual tax
abatements, for eligible real property located in the Downtown area,
pursuant to D.C. Code §§ 47-858(b), 47 858(c), and 47-458(d).
(c) Any unapproved
funds may be carried forward for up to 5 years.
Sec. 4. Section 802
of the Rental Housing Act of 1985, effective July 17, 1985 (D.C. Law 6-10;
D.C. Code § 45-2582), is amended by adding a new subsection (f) to read
as follows:
The provisions of
this section shall be inapplicable to any person who, or any property
which, receives any tax relief pursuant to D.C. Code §§\47-857 through
47-859.".
Sec. 5. Fiscal
impact statement.
The Council adopts the fiscal impact statement in the committee report
as the fiscal impact statement required by section 602(c)(3) of the
District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat.
813; D.C. Code § I-233 (c)(3)).
Sec. 6. This act shall take effect following the approval by the Mayor
(or in the event of a veto by the Mayor, action by the Council to override
the veto), approval by the Financial Responsibility and Management
Assistance Authority as provided in section 203 (a) of the District of
Columbia Financial Responsibility and Management Assistance Act of 1995,
approved April 17, 1995 (109 Stat. 116; D.C. Code § 47-392.3(a)), a
30-day period of Congressional review as provided in section 602(c)(1) of
the District of Columbia Home Rule Act, approved December 24, 1973 (87
Stat. 813; D.C. Code §1-233(c)(1)), and publication in the District of
Columbia Register. |
