A heated spat over how to tax certain affordable housing projects is playing out for the third time in three years in the Legislature, as lawmakers attempt to finally pass laws that favor one argument over another.

The dispute has pitted project developers and the Louisiana Tax Commission against two parish assessors. In the absence of definitive state laws on the matter, at issue is whether the federal tax credits attached to some affordable housing properties may be figured into their overall value — a move that could lead to higher property tax bills.

The two assessors argue for including those incentives, while developers and the commission say the properties should be taxed based on the lower-than-market-rate rents they receive.

In a nutshell, the credits work like this: Developers sell credits to investors in order to raise money to build their projects, and the investors in turn get a break on their federal tax bills over a 10-year period. For example, an investor might buy the credits from a developer for $500,000 and save $650,000 in taxes over 10 years.

Assessors who favor including the credits in figuring a property’s value say they are a benefit of ownership, similar to the rent a homeowner receives for leasing out a house. But developers point out that, under federal rules, they must agree to keep rents low to get the credits in the first place, which they say means the properties don’t earn enough annual income to justify the higher tax bills.

Proposed state laws on the subject have been introduced and killed twice in the past two years: a 2014 bill that favored the assessors and a 2015 bill that favored developers.

New Orleans-area skirmishes have preceded this year’s legislative battle, as Orleans Parish Assessor Errol Williams and St. Tammany Parish Assessor Louis Fitzmorris recently sued two property owners and the state Tax Commission in defense of their assessments. Separately, the backers of a planned Gentilly affordable housing complex took Williams to task as it petitioned for a tax break, calling his methods wrongheaded.

Two proposed bills — House Bill 610 and House Bill 359, from Reps. Mark Abraham, R-Lake Charles, and Rep. Helena Moreno, D-New Orleans, respectively — appear to favor the developers’ position.

Under Abraham’s bill, assessors could not consider the tax credits’ value, or project financing terms, “as a component of the value or as income to the property.” That would quash moves to count the credits as income.

Moreno’s bill would further require assessors to figure in the “actual income-restricted rents,” among other operational requirements, when they examine the overall income of such properties to determine their fair market value. Developers favor this so-called “income approach,” which takes a property’s restricted rent into account in determining its value.

Moreno’s bill also says those properties can’t be compared with other properties for the purpose of assessments or assessment appeals.

Neither legislator was available to discuss their bills Friday.

In a recent interview, Williams said he would adhere to either the courts’ or the Legislature’s final decision. “If the Legislature says tomorrow, ‘We only want you to use the restrictive rents to judge the property,’ then Erroll Williams follows the law,” Williams said.

However, at least one of Williams’ champions, New Orleans City Councilwoman Stacy Head, bemoaned state government’s attempts to curtail local assessment practices.

On Tuesday, the city’s Industrial Development Board approved a tax break for the Bastion Community of Resilience, the Gentilly complex whose backers have criticized Williams.

That’s an example of what can happen when those closest to the tax rolls decide which properties should go on them, Head said.

“Whether or not we’re willing to subsidize projects should be a local decision,” she said. “When we are forgoing property taxes because someone in Baton Rouge made us, we are forgoing all of those services that those taxes pay for.”

Follow Jessica Williams on Twitter, @jwilliamsNOLA.