Bill Text: HI SB2517 | 2016 | Regular Session | Introduced

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Bill Title: Community Contribution Program; Tax Credit; Low-income Housing; Community Development

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2016-01-27 - Referred to EET/HOU, WAM. [SB2517 Detail]

Download: Hawaii-2016-SB2517-Introduced.html

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THE SENATE	S.B. NO.	2517
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to community development.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

Community CONTRIBUTION program

     §   -1  Definitions.  As used in this chapter:

     "Department" means the department of business, economic development, and tourism.

     "Eligible business" means any business located in Hawaii.

     "Eligible sponsor" means:

     (1)  A community action program;

     (2)  A nonprofit community based development organization whose mission is the provision of housing for persons with special needs or low-income or very-low-income households or increasing entrepreneurial and job development opportunities for low-income persons;

     (3)  A neighborhood housing services corporation;

     (4)  A local housing authority;

     (5)  A community redevelopment agency;

     (6)  A historic preservation district agency or organization;

     (7)  A Regional workforce board;

     (8)  A direct-support organization;

     (9)  An enterprise zone development agency;

    (10)  A community-based organization which is recognized as educational, charitable, or scientific pursuant to section 501(c)(3) of the Internal Revenue Code and whose bylaws and articles of incorporation include affordable housing, economic development, or community development as the primary mission of the corporation;

    (11)  Units of local government;

    (12)  Units of state government; or

    (13)  Such other agency as the department of taxation may designate by rule.

     "Qualified business" means any business located in Hawaii that has been approved by the department to participate in the community contribution program.

     "Qualified sponsor" means an eligible sponsor that has been approved by the department to participate in the community contribution program.

     §   -2  Community contribution program; eligibility; qualified businesses and sponsors.  (a)  There is established within the department of business, economic development, and tourism, the community contribution program, which provides incentives to qualified business that make qualified community contributions to qualified sponsors for qualified community development projects.

     (b)  Any eligible business may apply to participate in the community contribution program and thereby become a qualified business eligible for the incentives available pursuant to this chapter and section 235-  .  No qualified business shall have a financial interest in a qualified sponsor.

     (c)  Any eligible sponsor may apply to participate in the community contribution program and thereby become a qualified sponsor eligible to solicit qualified community contributions pursuant to this chapter.  No eligible sponsor shall receive qualified community contributions prior to being approved as a qualified sponsor by the department.

     §   -3  Applications; requirements.  (a)  Any eligible sponsor may apply to participate in the community contribution program by submitting an application to the department that sets forth the qualified community development project to be supported, area in which the project is to be located, and any supporting information required by the department through the adoption of administrative rules.

     (b)  Any eligible business may apply to participate in the community contribution program by submitting an application to the department that sets forth the qualified sponsor and qualified community development project to be supported and the type, value, and purpose of the qualified community contribution.  The qualified sponsor shall verify in writing the terms of the application and receipt of the community contribution and shall include the written verification shall be submitted by the eligible business with the proposal.

     §   -4  Qualified community contributions.  (a)  Qualified community contributions shall include but not be limited to the following:

     (1)  Cash;

     (2)  Property;

     (3)  Goods;

     (4)  Project development impact and management fees;

     (5)  Down payment and closing costs;

     (6)  Housing counseling and marketing fees not to exceed ten per cent of the donation; or

     (7)  Removal of liens recorded against residential property by county or state agencies,

made by an eligible business to a qualified sponsor.  Dues and services shall not constitute qualified community contributions.

     (b)  Qualified community contributions shall not be used to pay any administrative or operational costs of the eligible sponsor.

     §   -5  Qualified community development projects.  (a)  Qualified community development projects are projects that:

     (1)  Provide, construct, improve, or substantially rehabilitate housing, commercial, industrial, or public facilities, or to promote entrepreneurial or job development opportunities for low-income persons;

     (2)  Increase access to high-speed broadband capability in rural communities; or

     (3)  Are designed to provide, construct, or rehabilitate housing for low-income or very-low-income persons or for persons with special needs.

     (b)  Qualified community development projects shall be located within an area designated as an enterprise zone pursuant to chapter 209E; provided that any project designed to construct or rehabilitate housing for low-income or very-low-income households or provide housing opportunities for persons with special needs is exempt from the area requirement pursuant to this subsection.

     (c)  This section does not preclude projects that propose to construct or rehabilitate housing for low-income or very-low-income households on scattered sites or provide housing opportunities for persons with special needs.

     (d)  The department shall periodically monitor all qualified community development projects in a manner consistent with available resources to ensure that resources are utilized pursuant to this chapter; provided that each project shall be reviewed no less than once every two years.

     §   -6  Community contribution program tax credit.  (a)  Each qualified business may apply for and receive the community contribution program tax credit as provided under section 235‑  .

     (b)  Any qualified community contribution for which a qualified business claims a tax credit pursuant to section 235‑   shall be used exclusively for qualified community development projects.

     (c)  Each qualified business shall submit to the department a form to be supplied by the department that provides the information necessary for the department to determine if it may certify the applicability of the tax credits provided in section 235-  .

     (d)  The form referred to in subsection (c) shall be prima facie evidence of the eligibility of a qualified business for the purposes of the tax credit.

     (e)  Any approval or disapproval by the department of a certification for the tax credit shall be in writing.  If the certification is approved, the notification shall state the maximum tax credits allowable to the qualified business.  A copy of the decision shall be transmitted to the director of taxation, who shall apply such tax credits to the tax liability of the qualified business pursuant to section 235-  .

     §   -7  Adoption of rules.  The department may adopt rules, pursuant to chapter 91, to effectuate the purposes of this chapter, including rules for the approval or disapproval of proposals by eligible businesses for participation in the community contribution program."

     SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-    Community contribution program tax credit.  (a)  There shall be allowed to each qualified business, as defined in section    -1, subject to the tax imposed by this chapter a community contribution program tax credit which shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

     (b)  The tax credits shall be for projects that provide housing opportunities for persons with special needs and homeownership opportunities for low-income or very-low-income households.  The amount of the tax credit shall be equal to fifty per cent of a qualified community contribution, as defined in section    -1, against any tax imposed by this chapter.  A maximum of $200,000 of tax credits in the aggregate for all eligible taxpayers may be used in any one taxable year.

     (c)  The total amount of tax credits that may be granted for all programs under this section shall be $           in fiscal year 2016-2017, $           in fiscal year 2017-2018, $           in fiscal year 2018-2019, and $           in fiscal year 2019-2020.

     (d)  If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of credit over liability may be used as a tax credit against the taxpayer's net income tax liability in subsequent years until exhausted.  For the purposes of this section, "net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.  All claims for a tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

     (e)  In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for the qualified costs incurred by the entity for the taxable year.  The cost upon which the tax credit is computed shall be determined at the entity level.  Distribution and share of the tax credit shall be determined pursuant to section 704(b) (with respect to partner's distributive share) of the Internal Revenue Code.

     (f)  The director of taxation shall prepare any forms that may be necessary to claim a credit under this section.  The director may also require the taxpayer to furnish information to ascertain the validity of the claim for the tax credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

     (g)  If, during the first ten business days of the fiscal year, eligible tax credit application for projects that provide housing opportunities for persons with special needs or homeownership opportunities for low-income or very-low-income households are received for less than the annual tax credits available for those projects, the tax credits for those applications shall be granted on a first-come, first-served basis for any subsequent eligible forms received before the end of the fiscal year.  If, during the first ten business days of the fiscal year, eligible tax credit applications for projects that provide housing opportunities for persons with special needs or homeownership opportunities for low-income or very-low-income households are received for more than the annual tax credits available for those projects, the tax credits shall for those applications shall be granted as follows:

     (1)  If tax credit applications submitted for approved projects of an eligible sponsor do not exceed $200,000 in total, the tax credit shall be granted in full if the tax credit applications are approved; and

     (2)  If tax credit applications submitted for approved projects of an eligible sponsor exceed $200,000 in total, the amount of tax credits granted under paragraph (1) shall be subtracted from the amount of available tax credits and the remaining tax credits shall be granted to each approved tax credit application on a pro rata basis.

     (h)  If, during the first ten business days of the fiscal year, eligible tax credit applications for projects other than those that provide housing opportunities for persons with special needs or homeownership opportunities for low-income or very-low-income households are received for less than the annual tax credits available for those projects, the tax credits for those applications shall be granted on a first-come, first-served basis for any subsequent eligible forms received before the end of the fiscal year.  If, during the first ten business days of the fiscal year, eligible tax credit applications for projects other than those that provide housing opportunities for persons with special needs or homeownership opportunities for low-income or very-low-income households are received for more than the annual tax credits available for those projects, the tax credits for those applications shall be granted on a pro rata basis."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2015, and shall be repealed on June 30, 2020.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Community Contribution Program; Tax Credit; Low-income Housing; Community Development

 

Description:

Establishes a community contribution program that offers tax incentives to encourage Hawaii businesses to make donations toward community development and housing projects for low-income persons.  Repeals 6/30/2020.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.