A bill that would settle a long-running dispute over how to tax affordable-housing developments cleared its first major hurdle in the Legislature on Monday.

House Bill 610 by Rep. Mark Abraham, R-Lake Charles, would bar parish assessors from including the federal low-income housing tax credits attached to those projects when determining their overall value.

The House Ways and Means Committee passed the bill favorably with no objections but with amendments that more clearly outline which properties it applies to. The amendments also specify that assessors may continue to appraise such properties using three nationally accepted assessment methods, as long as they don’t include the tax credits, Abraham said.

Passage of the bill would be a victory for developers and affordable-housing advocates, who have waged a procedural and legal war against parish assessors over the matter in recent years, particularly in Orleans and St. Tammany parishes.

At issue are tax credits which developers receive for low-income housing projects and which they then sell to investors in exchange for financing the projects. The investors in turn receive a tax break from the federal government spread over several years.

To get the credits, developers must agree to keep rents lower than the market rate — and therein lies the problem, developers say.

While Orleans Parish Assessor Erroll Williams and St. Tammany Parish Assessor Louis Fitzmorris have argued that the tax credits are ownership benefits similar to rent a property owner receives, and therefore should be reflected in the properties’ values, that often would mean higher property tax bills.

Developers say those bills would be unfair because of the reduced rents they receive. They claim the strain on their finances could eventually lead to property foreclosures and reduce the local stock of affordable housing.

The Louisiana Tax Commission, in light of that argument, has repeatedly overruled assessments by Williams and Fitzmorris.

“If the Orleans Parish assessor and the St. Tammany assessor prevail, you are talking about affecting thousands of hard-working families in this state,” said Michael Vales, developer of the Filmore Parc Apartments in Gentilly and executive director of the Mirabeau Family Learning Center at that site.

But the two assessors, who have challenged the Tax Commission’s rulings in court, say they are not out to hinder affordable housing, only to ensure equitable assessments. They argue that allowing a wealthy developer to pay less in property taxes burdens other taxpayers, can lead to reduced government services and is not in line with the original purpose of the tax credits.

Further, there has been no proof, at least in St. Tammany, that purportedly aggrieved developers have been slapped with higher tax bills than they anticipated, St. Tammany Parish Chief Deputy Assessor Troy Dugas said Monday.

“Nobody is really showing me anything that proves that they anticipated they would pay more than their fair share of the taxes,” he said.

Reps. Stephanie Hilferty, R-New Orleans, and Barry Ivey, R-Baton Rouge, two members of the Ways and Means Committee, were unswayed. They said assessing apartment units that rent at reduced rates as though they had the same income-generating potential as market-rate units is unfair.

A reduced-rent unit going for $1,000 a month, “you want to value that one at $2,000. Is that right?” Ivey asked Fitzmorris and Dugas.

The assessors agreed, saying the best practice is to assess property based on potential income, rather than actual income.

“But if you have a restriction on what you can charge for rent, then it would seem that potential income is not there,” Ivey said.

Rep. Julie Stokes, R-Kenner, seemed more sympathetic to the assessors’ position. After having sat through the same debate repeatedly in recent years — similar bills were proposed and killed in 2014 and 2015 — she said she understands both sides of the argument. “I’m 50-50,” she said.

Follow Jessica Williams on Twitter, @jwilliamsNOLA.