Bill Text: AZ HB2576 | 2024 | Fifty-sixth Legislature 2nd Regular | Introduced
Bill Title: Affordable housing tax credits; extension.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-01-22 - House read second time [HB2576 Detail]
Download: Arizona-2024-HB2576-Introduced.html
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REFERENCE TITLE: affordable housing tax credits; extension. |
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State of Arizona House of Representatives Fifty-sixth Legislature Second Regular Session 2024
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HB 2576 |
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Introduced by Representatives Quiñonez: Dunn, Livingston, Ortiz; Senators Bennett, Bravo, Gowan, Hernandez
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An Act
amending sections 20-224.04, 41-3954, 43-1075 and 43-1163, Arizona Revised Statutes; amending Laws 2021, chapter 430, sections 3, 6, 8, 11, 14 and 19; relating to affordable housing tax credits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-224.04, Arizona Revised Statutes, is amended to read:
20-224.04. Affordable housing premium tax credit
A. A taxpayer is allowed a credit against the premium tax incurred pursuant to section 20-224, 20-837, 20-1010, 20-1060 or 20-1097.07 if the Arizona department of housing issues an eligibility statement for a qualified project pursuant to section 41-3954. The amount of the credit:
1. Is equal to at least fifty percent of the amount of the federal low-income housing credit the amount determined by the department pursuant to section 41-3954 for the qualified project.
2. On notice to the department of insurance and financial institutions, may be allocated among the partners, members or shareholders, as they may agree among themselves, regardless of the size of such participant's ownership interest. The total of the allocated credits among all such participants may not exceed the amount of the credit approved by the Arizona department of housing. This paragraph does not prohibit a partner, member or shareholder from holding an investment exclusively in either the state credits or federal credits allocated to the qualified project.
B. To claim the credit under this section, the taxpayer must submit the eligibility statement provided by the Arizona department of housing under section 41-3954 to the department of insurance and financial institutions with the taxpayer's premium tax return. A credit under this section is not allowed until the taxpayer furnishes the required documentation.
C. If the amount of the credit under this section exceeds the taxpayer's state premium tax liability, the amount of the claim not used to offset the premium tax liability may be carried forward for not more than five consecutive taxable years' premium tax liability.
D. If all or part of the federal low-income housing tax credit with respect to the qualified project is subject to recapture under section 42 of the internal revenue code during the first ten taxable years after the project is placed in service, the credit under this section is also subject to recapture in a proportional amount from all taxpayers that claimed the credit. The recapture is calculated by increasing the amount of taxes imposed in the following year by the amount recaptured.
E. A taxpayer that claims a tax credit against state premium tax liability is not required to pay any additional retaliatory tax imposed pursuant to section 20-230 as a result of claiming that tax credit. The credit may fully offset any retaliatory tax imposed by section 20-230.
F. The department of insurance and financial institutions, with the cooperation of the department of revenue and the Arizona department of housing, shall adopt rules and publish and prescribe forms and procedures as necessary to administer this section.
Sec. 2. Section 41-3954, Arizona Revised Statutes, is amended to read:
41-3954. Affordable housing tax credit; limit; eligibility statement; rules; public hearings; annual report; definitions
A. The affordable housing tax credit is established. The department shall administer the credit as provided by this section.
B. On application, the department shall allocate tax credits under this section for projects in this state that qualify for the federal low-income housing tax credit under section 42 of the internal revenue code and that are placed in service, for purposes of the federal credit, from and after June 30, 2022, in an amount equal to at least fifty percent of the amount of the federal credit that the department determines is necessary for the economic feasibility of the qualified project. the credit is allowed in each taxable year during the federal credit period. The department shall allocate tax credits under this section according to the department's current qualified allocation plan adopted pursuant to section 42(m) of the internal revenue code.
C. The department shall prescribe forms, procedures and criteria for applying, evaluating and qualifying for the credit under this section. The department shall issue an eligibility statement for each qualified project that identifies the qualified project, the allocation year and the amount of the credits allocated to the project.
D. For calendar years 2022 through 2024, the department shall allocate a total of $4,000,000 of tax credits under this section in any calendar year according to the date of the allocation of the credit. For calendar years 2025 through 2031, the department shall allocate a total of $8,000,000 of tax credits under this section in any calendar year according to the date of the allocation of the credit. A credit allocated in calendar year 2025 may not be claimed until the federal fiscal year beginning October 1, 2026. An approved amount applies against the dollar limit for the year in which the application is submitted. If, at the end of the calendar year, an unused balance occurs under the dollar limit prescribed by this subsection, the balance shall be reallocated for the purposes of this subsection in the following year.
E. Any taxpayer that owns an interest in an investment in a qualified project that receives an eligibility statement from the department is allowed a tax credit under this section for taxable years beginning from and after December 31, 2021 if the taxpayer acquires the interest before filing a tax return claiming the tax credit. The taxpayer shall apply the credit against the taxpayer's insurance premium or income tax liability as provided by and subject to the procedures, terms and conditions prescribed by section 20-224.04, 43-1075 or 43-1163, as applicable.
F. A qualified project that is approved for the purposes of the credit under this section is not eligible for any abatement, exemption or other reduction in state or local ad valorem property taxes otherwise allowed by statute.
G. The Arizona department of housing, with the cooperation of the department of insurance and financial institutions and the department of revenue, shall adopt rules and publish and prescribe forms and procedures as necessary to administer this section, including criteria on which eligibility statements are issued under this section.
H. On or before July 30 of each year, the department shall hold a public hearing to solicit and accept public comments relating to the amount of the credit under this section to be used for qualified projects that are financed through tax-exempt bond issuance as part of the qualified allocation plan process and other affordable housing tax credit issues. The department shall post a copy of all comments submitted during each public hearing on the department's website before September 15 of the year in which the public hearing is held.
I. On or before December 31 of each year, the department shall submit to the president of the senate and the speaker of the house of representatives a report that addresses whether the credits approved under this section produced a significant number of additional affordable housing units in this state and that analyzes the economic impact of the credits approved under this section on this state. The department shall provide a copy of this report to the secretary of state.
J. For the purposes of this section:
1. "Internal revenue code" has the same meaning prescribed by section 43-105.
2. "Qualified project" means a qualified low-income building as defined in section 42(c)(2) of the internal revenue code.
3. "Taxpayer" means a person, firm or corporation that is subject to taxation under title 20 or under title 43, chapter 10 or 11.
Sec. 3. Section 43-1075, Arizona Revised Statutes, is amended to read:
43-1075. Affordable housing tax credit
A. A taxpayer is allowed a credit against the taxes imposed by this title if the Arizona department of housing issues an eligibility statement for a qualified project pursuant to section 41-3954. The amount of the credit:
1. Is equal to at least fifty percent of the amount of the federal low-income housing credit the amount determined by the department pursuant to section 41-3954.
2. On notice to the department of revenue, may be allocated among the partners, members or shareholders, as they may agree among themselves regardless of the size of such participant's ownership interest. The total of the allocated credits among all such participants may not exceed the amount of the credit approved by the Arizona department of housing. This paragraph does not prohibit a partner, member or shareholder from holding an investment exclusively in either the state credits or federal credits allocated to the qualified project.
B. To claim the credit under this section, the taxpayer must submit the eligibility statement provided by the Arizona department of housing under section 41-3954 to the department of revenue with the taxpayer's income tax return. A credit under this section is not allowed until the taxpayer furnishes the required documentation.
C. If the amount of the credit for a taxable year exceeds the amount of taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.
D. If all or part of the federal low-income housing tax credit with respect to the qualified project is subject to recapture under section 42 of the internal revenue code during the first ten taxable years after the project is placed in service, the credit under this section is also subject to recapture in a proportional amount from all taxpayers who claimed the credit. The recapture is calculated by increasing the amount of taxes imposed in the following year by the amount recaptured.
E. The department of revenue, with the cooperation of the department of insurance and financial institutions and the Arizona department of housing, shall adopt rules and publish and prescribe forms and procedures as necessary to administer this section.
Sec. 4. Section 43-1163, Arizona Revised Statutes, is amended to read:
43-1163. Affordable housing tax credit
A. A taxpayer is allowed a credit against the taxes imposed by this title if the Arizona department of housing issues an eligibility statement for a qualified project pursuant to section 41-3954. The amount of the credit:
1. Is equal to at least fifty percent of the amount of the federal low-income housing credit the amount determined by the department pursuant to section 41-3954 for the qualified project.
2. On notice to the department of revenue, may be allocated among the partners, members or shareholders, as they may agree among themselves regardless of the size of such participant's ownership interest. The total of the allocated credits among all such participants may not exceed the amount of the credit approved by the Arizona department of housing. This paragraph does not prohibit a partner, member or shareholder from holding an investment exclusively in either the state credits or federal credits allocated to the qualified project.
B. To claim the credit under this section, the taxpayer must submit the eligibility statement provided by the Arizona department of housing under section 41-3954 to the department of revenue with the taxpayer's income tax return. A credit under this section is not allowed until the taxpayer furnishes the required documentation.
C. If the amount of the credit for a taxable year exceeds the amount of taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the taxpayer may carry the amount of the claim not used to offset the taxes under this title forward for not more than five consecutive taxable years' income tax liability.
D. If all or part of the federal low-income housing tax credit with respect to the qualified project is subject to recapture under section 42 of the internal revenue code during the first ten taxable years after the project is placed in service, the credit under this section is also subject to recapture in a proportional amount from all taxpayers that claimed the credit. The recapture is calculated by increasing the amount of taxes imposed in the following year by the amount recaptured.
E. The department of revenue, with the cooperation of the department of insurance and financial institutions and the Arizona department of housing, shall adopt rules and publish and prescribe forms and procedures as necessary to administer this section.
Sec. 5. Laws 2021, chapter 430, section 3 is amended to read:
Sec. 3. Delayed repeal
Section 20-224.04, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 2, is repealed from and after December 31, 2025 2031.
Sec. 6. Laws 2021, chapter 430, section 6 is amended to read:
Sec. 6. Delayed repeal
Section 41-3954, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 5, is repealed from and after December 31, 2025 2031.
Sec. 7. Laws 2021, chapter 430, section 8 is amended to read:
Sec. 8. Delayed repeal
Section 43-225, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 7, is repealed from and after December 31, 2025 2031.
Sec. 8. Laws 2021, chapter 430, section 11 is amended to read:
Sec. 11. Delayed repeal
Section 43-1075, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 10, is repealed from and after December 31, 2025 2031.
Sec. 9. Laws 2021, chapter 430, section 14 is amended to read:
Sec. 14. Delayed repeal
Section 43-1163, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 13, is repealed from and after December 31, 2025 2031.
Sec. 10. Laws 2021, chapter 430, section 19 is amended to read:
Sec. 19. Saving clause
The repeal of sections 20-224.04, 41-3954, 43-225, 43-1075 and 43-1163, Arizona Revised Statutes, by this act Laws 2021, chapter 430, does not:
1. Limit or impair the issuance of premium tax credits or income tax credits for qualified projects that receive a reservation from the Arizona department of housing pursuant to section 41-3954, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430, section 5, before December 31, 2025 2031 or a taxpayer's ability to redeem such tax credits in accordance with sections 20-224.04, 41-3954, 43-1075 and 43-1163, Arizona Revised Statutes, as added by this act Laws 2021, chapter 430.
2. Affect any act done or right accruing or accrued or any suit or proceeding had or commenced in any civil cause of action before the repeal. All rights and liabilities under such acts continue and may be enforced in the same manner as allowed before the repeal.
