(a) Beginning with the fiscal year commencing July 1, 2025, the Secretary of the Office of Policy and Management shall pay a state grant in lieu of taxes to any municipality that has opted to partially exempt from real property tax a workforce housing development project under section 12-81nn and submitted an application for such grant. A municipality shall apply for such grant annually on a form and in a manner prescribed by the secretary. On or before January first, annually, the Secretary of the Office of Policy and Management shall determine the amount due to such municipality, in accordance with this section.

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(b) Any grant payable to any municipality that applies for a grant under the provisions of this section shall be equal to seventy per cent of the property taxes that, except for any exemption applicable to any such housing authority property under the provisions of chapter 128, would have been paid with respect to such exempt real property on the assessment list in such municipality for the assessment date two years prior to the commencement of the state fiscal year in which such grant is payable, for a maximum of seven assessment years. The amount of the grant payable to each municipality in any year in accordance with this section shall be reduced proportionately in the event that the total of such grants in such year exceeds the amount appropriated for the purposes of this section with respect to such year.