Leasehold Excise Tax.  State leasehold excise taxes are levied and collected on the act or privilege of occupying or using publicly owned real or personal property through a leasehold interest.  A leasehold interest is an interest in publicly owned real or personal property that exists by virtue of any lease, permit, license, or other written or verbal agreement between a public owner and a person who would not be exempt from property taxes if that person owned the property.  The leasehold excise tax is levied at a rate of 12.84 percent of taxable rent.  There are several leasehold excise tax exemptions, including certain military housing and facilities owned or used by a school, college or university which provide housing for students.  
 
Public Lands.  The Department of Natural Resources manages more than 5 million acres of land, including but not limited to state lands, state forestlands, lands included in a state forestland pool, and aquatic lands.
 
Tax Preference Performance Statement.  State law provides a range of tax preferences that confer reduced tax liability upon a designated class of taxpayer. Tax preferences include tax exclusions, deductions, exemptions, preferential tax rates, deferrals, and credits. Legislation that establishes or expands a tax preference must include a tax preference performance statement (TPPS) that identifies the public policy objective of the preference, as well as specific metrics that the Joint Legislative Audit and Review Committee (JLARC) can use to evaluate the effectiveness of the preference. All new tax preferences automatically expire after ten years unless an alternative expiration date is provided or the tax preference is exempted from expiration.

All leasehold interests for placement of affordable housing on public lands are exempt from leasehold excise tax for the duration of the lease when the lessee commits to renting or selling 100 percent of housing units as affordable to low- and moderate-income households and the term of the lease is at least 20 years.  DNR and the lessee must prioritize affordable housing for low-income households when receiving this exemption.
 
The following definitions apply:

• affordable housing means residential housing that is rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed 30 percent of the household's monthly income;
• low-income household means a single person, family, or unrelated persons living together whose adjusted income is at or below 80 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the United States Department of Housing and Urban Development (US HUD); and
• moderate-income household means a single person, family, or unrelated persons living together whose adjusted income is more than 80 percent but is at or below 115 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the US HUD. 

A TPPS is included stating the public policy objective is to incentivize the placement of affordable housing on public lands and the Legislature intends to continue the preference if a JLARC review finds that the number of affordable housing units placed on public lands increased following the enactment of this tax preference. The bill is not subject to automatic expiration for tax preferences.

PRO:  Spend time talking with land trust groups and Habitat for Humanity, people looking for land for affordable housing, and found that DNR had a housing program and land that could be used.  DNR has transition lands that are near cities, about 7000 acres, 3000 of which can be used for housing.  The land is currently in UGA and is not used for forest or agricultural purposes.  This land stays in a public land trust and could only be leased and not sold and so the lease would still be maintained and bring money to the state.  Cities will also receive money through taxation of the buildings that are on the lands.  The biggest development challenge is obtaining land.  Land is less available and too costly to buy on the open market.  This would offer a great incentive for affordable housing organizations.  We would love for the opportunity to partner with DNR to build more affordable homeownership opportunities.  This bill will help incentivize leasing public land for affordable housing.  The changes deepen the affordability impact of this bill by requiring a developer to provide 100% permanently affordable homes for the full duration of the lease and requiring DNR to prioritize low-income families to ensure that public lands are be used to address the housing crisis.  While the bill specifies that leases be at least 20 years DNR does have the ability to lease residential properties for up to 99 years.

PRO: This bill will help incentivize leasing public land for affordable housing. It will not decrease the state revenue but bring net impact. The changes made in the other chamber deepen the affordability impact of this bill by requiring a developer to provide 100 percent permanently affordable homes and requiring DNR to prioritize low-income families to ensure that public lands are be used to address the housing crisis.