Prince William County Real Estate Assessments Office opposes HB 1446 on the grounds that paragraph 2(g): 1. precludes the jurisdiction from using published capitalization rates, whereas we know from experience that market rate housing capitalization rates are highly comparable to affordable housing capitalization rates; 2. precludes the jurisdiction from using actual capitalization rates derived from market activity since the wording of the bill effectively makes any property that sells non-comparable to others, therefore unusable. HB 1446 states “for market derived rates to be used, properties must be highly comparable including comparability of property type, remaining economic life, operating expense ratios, physical condition, ratios of land-to-improvements as proportions of total property value, income streams, terms of sale, types of financing, types of buyers, and market conditions at the time of sale and time of assessment”; 3. precludes the jurisdiction from effectively using any other method than the band of investment (BOI) technique in establishing the capitalization rate. BOI typically generates capitalization rates that are higher than capitalization rates derived from market transactions or the published rates, resulting in values that can be significantly below fair market value; 4. the band of investment method employs weighted cost of capital in the calculation of the capitalization rate, therefore is inconsistent with establishing the fair market value of the fee simple estate as required by Virginia law Therefore: HB 1446 would result in affordable housing assessments to be: a) below fair market value as defined in the law and, b) inequitable with any affordable housing that sold at market (likely lower) cap rates which would arguably be assigned the actual capitalization rate it transacted at.

My name is Elliott Bales, I live in Arlington, VA and I am a retired US Army officer and a professional actor. I ask you to pass HB 771 to help us continue to grow the film and video production industry in Virginia. As a member of SAG-AFTRA and an elected member of the SAG-AFTRA Washington-MidAtlantic Local Board - the actors' and performers' union - I have first hand experienced the value of having a strong industry to tell Virginia's stories and to allow Virginians to participate in this important work. It is frustrating and painful to see so much of our work go to other states with incentives that dwarf what Virginia offers. Having to travel to other locales to work and spending money in their local businesses and paying taxes to their states bleeds money that should be spent in the Commonwealth. My conversations with producers who want to film in Virginia because of our depth of talent, the scenic value of our geography, and the history that resides here always ends the same way - they take their business elsewhere because it is more profitable. It is time to make Virginia more competitive in this industry that is currently growing revenue at 7.2% year over year. The Commonwealth needs more of that revenue spent here. I applaud the subcommittee's unanimous vote to move this significant piece of legislation forward and look forward to the full committee's passage of as well. We do not want to work in Atlanta or New York or LA. We want to work in the Commonwealth of Virginia, spend our money here, and see filmmakers spend their dollars at our businesses. And when we pay our reasonable taxes, we want them to stay in Virginia.

I am a resident of Virginia since 2010. I am a member of IATSE local 487. I am a disabled person. I have been a professional artist and visual arts teacher for 20 years. I support any funding to bring tv, movies, and commercials to the Common Wealth. My role in the movie industry is to work with k-12 students while they are on location. I fully implement all lessons provided by their school teacher to complete on location to be up to date with their studies. Working in the production industry and with union assistance has helped my self confidence and improve my social ability. I understand what it is like to work in an underpaid agency. Along with managers who are ill-prepared to work with disabled staff. My hope is that with this influx of financial funds. Many of us disabled workers can work in an industry we are trained to do, plus enjoy seeing the outcome displayed on the big screen.

House Bill 1446 amending §58.1-3295. Assessment of real property: affordable housing poses a serious threat to assessing authorities on a multitude of levels. The proposed bill essentially creates a scope of work which requires a single property appraisal for affordable housing properties limited solely to the income approach to value. This is a dangerous practice since the substitute has not been vetted by all interested parties. Either way, it is still a bad bill. Another point is the bill requires us as assessors to use the income approach (with penalties if we do not) but does not require the land owner to report the income and expense statements to us. We currently have the ability to ask for I & E but there is not a requirement or repercussion if they do not provide it. The other point is the proposed bill removes the presumption of correctness. They changed the language yesterday to remove the words “presumption of correctness” but the new language is just fluff and does the same thing in removing the presumption. Sincerely Dayle

This bill could have taxpayers of cities and counties paying attorneys if they prevail in court cases, which is totally wrong! Tenants will not benefit from rents being reduced as a result of this legislation. This is designed to increase Property Owners bottom line and produce addional income for attorneys. We are professionals and we provide accurate assessments. This legislation will conflict with the overiding statute that requires us to follow market value in assessing real estate. Thank You.

I oppose this bill. I ask that it either be left to die in committee, or it be carried over for off-season work to address the perceived issues. I represent a lot of clients on affordable housing assessment issues. In my view, this is a bill that is using a sledge hammer when a fly swatter would do. Some additional training and instruction would be better than creating yet another unfunded mandate for localities to hire fee appraisers, and forced, as a practical matter, to settle favorably to the property owners or else face litigation in which the potential attorney's fees award may exceed the amount at issue. It looks like each locality would need to hire an appraiser to comply with the mandates of this section for each assessment of affordable housing, essentially doing a fee simple income approach and otherwise follow the statute. The existing exemption for an in-house assessor from licensure by the state as a private fee simple appraiser would be worthless. Moreover, citizen Boards of Assessors and Boards of Equalization (or BORs) with no budget would also be required to engage an appraiser to comply on any appeal of an assessment of affordable housing, since the same appraisal methods here are mandated. Frankly, the existing statute seems to mandate a fair method of assessment. Better training would seem the answer if indeed there is a problem. As it stands today, there are many inexpensive answers to complaints that the income approach should be used. For example, there are multiple administrative processes (short summary only): - Assessor appeals (upon assessment notice or 58.1-3350), - Board of Equalization appeals (on appeal from assessment or 58.1-3350), - Code 58.1-3980 Commissioner of the Revenue appeals. One of these processes typically work. If not, an offer in compromise under 58.1-3994 with the Commissioner of the Revenue may be available. Lastly, if the process is not followed and those means to correct the method of assessment won't work, the locality can settle the matter through an agreed settlement using the power of the court under 58.1-3350 (filed by locality or COR), and 58.1-3984 and 58.1-3987 (filed by taxpayer). I have seen each of the above approaches used successfully by affordable housing property owners. Again, I oppose HB 1446 and ask it be left to die in committee or, at the least, be carried over for off-season work to address the perceived issues.

House Bill 1446 amending §58.1-3295. Assessment of real property: affordable housing poses a serious threat to assessing authorities on a multitude of levels. The proposed bill essentially creates a scope of work which requires a single property appraisal for affordable housing properties limited solely to the income approach to value. Most concerning of all is paragraph 7, “For any provision of this section that is in direct conflict with any other section in this title, the provisions of this section control.” Not only will this supersede existing statute, this bill conflicts with precedence established by the Supreme Court of Virginia. Furthermore, it is not uncommon for other states and courts of law to cite legislation from another state to meet their ends. This is a bad bill altogether. The existing statute seems to mandate a fair method of assessment. And if that method is not used, there are administrative process: - Assessor appeals (upon assessment notice or 58.1-3350), - BOE appeals (on appeal from assessment or 58.1-3350), - Perhaps 58.1-3980 COR appeals. One of these processes typically work. If not, an offer in compromise under 58.1-3994 with the COR may be available. Lastly, if the process is not followed and those means to correct the method of assessment won't work, the locality can settle the matter through an agreed settlement using the power of the court under 58.1-3350 (filed by locality or COR), and 58.1-3984 and 58.1-3987 (filed by taxpayer). If the proper method is followed but the taxpayer has an objection to the assessment and the requirements of 58.1-3984(B) are met, as a last resort, the taxpayer may receive relief from the court under 58.1-3987 under existing law.

My name is Stephenie Love and I am the real estate assessor for the City of Poquoson. I am a resident of King George County and I am on the legislative committee for the Virginia Association of Assessing Officers (VAAO). On behalf of that committee I am sending this commentary in opposition of HB 1446 Real property tax; assessment of real property used for affordable housing. The bill mandates the procedure in which these properties are assessed for tax purposes, narrowing the scope of work to a single method. This method, the income approach, is further narrowed to the yield capitalization technique because comparable rent for such properties is considered private information. The bill goes on to specifically detail the scope of work for the assessing officer in addition to directing that they project future income potential and operating expenses for the property (paragraph 2a). If HB1446 is adopted as written it seems each jurisdiction would need to hire an appraiser to comply with the mandates of this section for each assessment of affordable housing, essentially doing a fee simple income approach and otherwise follow the statute. Citizen Boards (BOAs and BOE) with no budget would also be required to engage an appraiser to comply on any appeal of an assessment of affordable housing, since the same appraisal methods are mandated to them. If at any time the assessing officer and/or appraiser and/or board is found to have ventured outside the scope of work prescribed in the bill (considering a market sale of a similar property for instance), the resulting assessment will not be entitled to the presumption of correctness, and the jurisdiction will have to reimburse the appellant(s) for fees incurred in prosecuting the appeal. In the end, the bill seems to require that these properties NOT be assessed in a Mass Appraisal context (that can ensure equalization amongst like properties), but singularly and individually. Already existing law regarding affordable housing seems to mandate a fair method of assessment. And if that method is not used, there are administrative processes. Paragraph 7 of HB1446 makes this statute null and void. Please consider opposing HB 1446. Thank you for your time and consideration

HB 1446 amending §58.1-3295. Affordable Housing . This amendment is in stark contrast to current accepted Mass Appraisal practices, procedures, rules and standards. It is proposing a single property appraisal for affordable housing properties abandoning the other two approaches to value. It is extremely limiting and therefore poses a great potential for inequities in Mass Appraisal. Our current methodologies in place treat this subset of properties equitably and should the property owner disagree, there are already several avenues to appeal an assessment. We strongly oppose HB 1446 bill.

As an assessor, I am against HB 1446 which will amend Virginia Code §58.1-3295. Briefly, this proposed legislation goes against acceptable appraisal practices and is in direct conflict with precedence set forth by the Virginia Supreme Court. Many of my colleagues from localities across Virginia do not support this bill and I urge you to not support it either. Please pass-by indefinitely this legislation when you vote during committee and do not allow this legislation to advance. Thank you.

Due to the complexities invovled in this assessment... we oppose this bill.