Amends TCA Title 13, Chapter 23; Title 67, Chapter 4 and Title 67, Chapter 5.

This bill outlines procedures regarding classification of rental property as affordable housing, as discussed below.<br /> <br /> This bill requires the Tennessee housing development agency (THDA) to research the availability of affordable rental housing in every county annually to determine which counties have a shortage of affordable housing. For counties having a shortage, THDA must set income limits that qualify for affordable housing and monthly rental rates that may be charged for affordable housing during the following year, based on the size of the rental unit and the income limit for the size of a low income household. THDA must then provide the assessor or property in the counties having a shortage and the state board of equalization with the income limits and rental rates, and put the information on its website. <br /> <br /> This bill requires the state board of equalization to create an application form for owners of rental housing (owners) to use in applying to the assessor of property in counties with a shortage of affordable rental housing for classification of rental housing as affordable rental property. The application must contain information such as monthly rent and the size of the unit. This bill details the application procedure for classification as affordable rental property.<br /> <br /> If the assessor approves the application, then the rental housing will be classified as affordable rental property for the tax year in which the application was filed. For such tax year, the owner must file with the assessor documents verifying that the rental housing was rented to low-income persons at affordable rental rates. When rental property has been classified as affordable rental property, the assessor will consider its current use as affordable rental property to be its immediate most suitable economic use. The assessor will base the assessment on its value in its current use. <br /> <br /> If, during a tax year in which rental housing has been classified as affordable rental property, the owner does not rent to low income persons or does not rent the rental housing at affordable rental rates, the rental housing is rendered unfit for human habitation, or the owner sells or otherwise transfers the rental housing to another owner, then the rental housing will lose its eligibility for classification as affordable rental property for the tax year. This bill requires the owner to promptly notify the assessor of any change in use or ownership of the rental housing that might affect its eligibility and to reapply every four years for classification of rental housing as affordable rental property. The owner may also request in writing during the tax year that the rental housing be removed from assessment as affordable rental property.<br /> <br /> This bill requires, upon receiving notification or discovering that a rental housing no longer qualifies as affordable housing, the assessor of property to reclassify the rental housing and value the rental housing according to its current market value for the tax year for which the rental housing was classified as affordable rental property. The owner will be liable for the tax computed on the value of the rental housing as determined by the assessor.<br /> <br /> This bill will apply to the classification of rental housing as affordable property for the tax year beginning on January 1, 2020, and tax years thereafter.<br /> <br />