Though a controversial proposal to tax the University’s $25.6 billion endowment has died in committee, a concurrent bill aiming to clarify Yale’s taxable property advanced in the state legislature this Thursday.

The General Assembly’s Finance, Bonding and Revenue committee approved the property tax bill 28 to 22 votes this Thursday afternoon. Overshadowed in the national media by a controversial proposal to tax the University’s unspent endowment returns, S.B. 414 seeks to ensure University property on which commercial activity of over $6,000 annually occurs can be taxed accordingly, as per current state law, supporters said. Rep. Roland Lemar, D-New Haven, who has backed the bill alongside the rest of New Haven’s state delegation, stressed during the committee meeting that the bill would not tax Yale’s academic buildings or any of the ventures originated in taxable University property. While lawmakers in Hartford have struggled to piece together a workable budget plan this legislative session, Lemar said the bill would only generate revenue at the municipal level.

“This would be a local property tax issue,” Lemar said. “It is in no way intended to solve a state budget deficit or budget crunch.”

Republican members on the committee protested what Sen. Toni Boucher, R-New Canaan, called a “persistent attack of the nonprofit sector.”

Sen. Scott Frantz, R-Greenwich, said the bill would establish the dangerous precedent of a state taxing the real estate assets of a non-profit for the first time — though, in fact, the bill would allow only municipalities, and not the state, to tax University property. Frantz suggested the bill could lead to a “slippery slope,” opening up other non-profits, like churches and synagogues, to taxation.

“The legislation is a step backward,” University spokesman Tom Conroy said in a statement to the News. “It would diminish Yale’s ability to invest in the community and discourage faculty from launching companies, or staying in New Haven. It is ultimately an attack on nonprofit colleges and universities that are among the best assets in Connecticut.”

The University launched a series of public attacks on both bills after Associate Vice President for Federal and State Relations Richard Jacob testified against them before the finance committee March 22. Yale has maintained that it would fight the bills, if passed, in court. The University has claimed a constitutional right to non-taxation, established by its 1701 charter and later affirmed by the state constitution.

Yale is New Haven’s the fifth-largest taxpayer. But the University does not consider property taxes the sole measure of its contribution to the city, according to Conroy. Yale has also provided $96 million in voluntary payments to the city, as well as community investments such as the Yale Homebuyer program and New Haven Promise.

Preliminary fiscal notes released by the state’s nonpartisan Office of Fiscal Analysis April 7 stated that the property bill would require private colleges with real estate valued at $2 billion or more to pay taxes on certain property. The bill would single out Yale, the only university in Connecticut with such property holdings.

The OFA indicated that on the 2011 Grand List, the University owned property in 12 municipalities valued at about $2.5 billion. If not for its tax-exempt status, Yale would have paid $65.2 million in taxes to these municipalities in fiscal year 2013, with New Haven receiving $62.8 million of that revenue. But the OFA was unable to determine how much of that payment would be from properties impacted by the bill.

Lawmakers on the finance committee had previously voiced concern on a lack of information regarding which of the University’s properties contain commercial activity in the public hearing for the bill March 22.

The gain in revenue from taxes would be offset by a loss in funds from the state via the Payment in Lieu of Taxes program, according to the OFA.

Sitting alongside Bridgeport Mayor Joe Ganim and Hartford Mayor Luke Bronin ’01 LAW ’06 in a panel hosted by the Office of the State Treasurer Thursday afternoon, New Haven Mayor Toni Harp said she was only supporting the property tax bill, making no comment on the endowment tax proposal. Like Lemar, she argued that the bill would not impose new taxes on the University, but would only define how mixed-use properties containing commercial operations can be taxed by the city.

According to Harp, current law states that private college property annually generating $6,000 or more in commercial activity can be taxed, but that municipalities had never utilized the statute. Some local supporters of the bill think that University facilities in which pharmaceuticals and patents are being developed for later, potential commercial use might fall under that law, Harp said.

“There are some other instances in which something started out as a university-only operation, like a travel agency, and then it starts selling services outside of university services,” Harp said. “Should a portion of that not be considered for property tax? And so, the bill I’m supporting is the one that basically seeks the clarification of existing law.”

The accompanying endowment tax bill, which the committee did not put on the agenda April 7, was opposed by Gov. Dannel Malloy’s administration March 29.

In an op-ed in the Hartford Courant on April 2, Vice President for New Haven and State Affairs and Campus Development Bruce Alexander ’65 alleged that lawmakers raised the “unprecedented” bills due to requests from Yale’s unions seeking University recognition of Yale’s graduate student union, Local 33, formerly known as the Graduate Employees and Students Organization.

Although members of Local 33 and national union coalition UNITE HERE testified in favor of both bills March 22, New Haven officials and the city’s state delegation have avoided attributing the bills’ origins to the city’s unions.

Lemar told the committee Thursday that the mayors of West Haven and Middletown had also backed the property proposal.

If passed by the General Assembly, the bill would become effective Oct. 1.