New Orleans-area officials are closely tracking a bill, slated to be considered in a legislative committee Monday, that would place restrictions on how cities tax certain affordable-housing projects and finally settle a long-running debate between parish assessors and property developers on the subject.

The bill in question, House Bill 610, by Rep. Mark Abraham, R-Lake Charles, would bar assessors from including the federal low-income housing tax credits attached to such housing projects in determining their overall value. They also could not count those credits as property income.

Instead, assessors likely would be able to take into account only the rental income that such properties pull in — a move that often leads to reduced tax bills.

A separate bill, House Bill 359, would have required assessors to evaluate only that rental income, but its sponsor, Rep. Helena Moreno, D-New Orleans, said Sunday that she plans to pull it from consideration, given Orleans Parish Assessor Errol Williams’ concerns about the issue and the two sides’ inability to come to a compromise.

Williams, St. Tammany Parish Assessor Louis Fitzmorris and the Louisiana Assessors’ Association all oppose Abraham’s bill, saying it would limit assessors’ flexibility and keep millions of dollars out of parish coffers. Developers, however, say it would prevent unrealistically high tax bills on properties that by design do not bring in much operating revenue.

The housing tax credits, put simply, work like this: Developers receive the credits and sell them to investors in exchange for financing for their projects; the investors in turn receive a tax break from the federal government over what is usually 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.

To get the credits, developers must agree to keep rents lower than the market rate — and therein lies the problem, developers say. The tax-credit properties usually don’t bring in as much income as do their traditionally financed counterparts, and developers say higher tax bills could lead to property foreclosures and crippling blows to parishes’ stocks of affordable housing.

“We want affordable housing for people, and we want developers to be able to pursue it. But when you make the cash flow difficult, you hurt the developers and then you make it difficult for people to have low-income housing,” Abraham said.

It is the third time lawmakers have taken up the issue in three years. Previous bills that sided with either the developers or the assessors failed to pass in 2014 and 2015.

Countering the developers’ views, Williams and Fitzmorris have argued in court that such tax credits are a property ownership benefit, similar to the rent an owner receives. Investors, though they often have little to do with property management, are still considered part-owners of the property, they say. Therefore, the assessors argue, the credits should be counted in the property’s income stream, a method the Louisiana Tax Commission repeatedly has overruled.

In Williams’ court battle, Orleans Parish Civil District Court judges have thus far sided with the developers, while Fitzmorris’ case will be heard in 22nd Judicial District Court in Covington later this month.

If the developers prevail, Williams said, New Orleans would forfeit more than $2.8 million in annual tax revenue the properties would otherwise generate. “The proposed legislative instruments would effectively bypass the current legal process and restrict the valuation process,” he said.

Williams and New Orleans City Councilwoman Stacy Head, who supports the assessors’ position, have insisted they are not anti-affordable housing. But they say limiting tax collections also limits government services; that the proposed law would give developers an advantage over traditional landlords who vie for the same tenants but must face higher tax bills; and that New Orleans already has a mechanism in place to award tax write-offs to affordable-housing developments.

That mechanism is the city’s Industrial Development Board, which decided last month to cut taxes for a Gentilly affordable-housing complex whose backers have criticized Williams.

If developers applied for the tax credits with the assumption they would receive a tax break, then perhaps local officials can make allowances for that, Head said. But in any case, she said, such city tax breaks should be given only after case-by-case consideration by local authorities, not in broad-brush tax giveaways by state lawmakers.

“If you want to not have to pay city property tax … you should have to ask for special permission to not pay,” she said.

Abraham’s bill is due to be heard in the House Ways and Means Committee at 10 a.m. Monday.

Follow Jessica Williams on Twitter, @jwilliamsNOLA.