Relating to: levy increase limits in political subdivisions with qualifying infill housing development. (FE)

AB 986 modifies property tax valuation rules for local governments (like cities and towns) that build qualifying infill housing projects. It defines "qualifying infill housing" as projects adding 2-6 new homes on older residential parcels (with 90% of the area developed for 10+ years), using existing infrastructure, and increasing total units. The bill changes how new construction value affects annual tax levy limits by including 90% of new property value in tax incremental districts (TIDs) and excluding removed improvements from these calculations. This adjustment aims to ease tax levy constraints for municipalities developing such housing without altering tax rates themselves.