S.F. No. 3945 Summary

• Requires property owners to obtain city or town governing body approval by resolution before initially applying for class 4d low-income rental housing tax classification, effective for assessment year 2023 and later.

• Modifies the class 4d property tax classification rate structure to apply a 0.75 percent rate to the first $100,000 of market value per unit (adjusted annually for subsequent years) and 0.25 percent to remaining value, replacing the previous uniform 0.25 percent rate.

• Requires class 4d property applications to include property tax identification number and evidence meeting subdivision requirements, with application deadline of March 31 of the levy year.

• Establishes transition aid program for cities and towns for tax years 2024 and 2025 to offset revenue loss from the modified class 4d classification rates, calculated based on net tax capacity and local tax rates.

• Appropriates sufficient general fund revenue to the commissioner of revenue to pay transition aid to affected local units in calendar years 2024 and 2025.