Bill Text: NC H911 | 2017-2018 | Regular Session | Amended

Bill Title: Private Sector Affordable Housing Act

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2017-04-26 - Ref To Com On Finance [H911 Detail]

Download: North_Carolina-2017-H911-Amended.html



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Short Title:      Private Sector Affordable Housing Act.



Representative Brody.

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Referred to:


April 26, 2017


AN ACT to enact the Private Sector Affordable Housing Act.

The General Assembly of North Carolina enacts:

SECTION 1.  Chapter 105 of the General Statutes is amended by adding a new Article to read:

"Article 3M.

"Affordable Housing Tax Credits.

"§ 105‑129.120.  Credit for affordable housing awarded a federal credit.

(a)        Credit. A taxpayer who claims for the taxable year federal income tax credit under section 42 of the Code with respect to qualified North Carolina housing is allowed a credit under this Article equal to the amount of federal credit the taxpayer took for the taxable year under section 42 of the Code.

(b)        Tax Election. The credit allowed in this section is allowed against the income taxes levied in Article 4 of this Chapter or the gross premiums tax levied in Article 8B of this Chapter. The taxpayer must elect the tax against which the credit will be claimed when filing the return on which the first installment of the credit is claimed. This election is binding. Any carryforwards of the credit must be claimed against the same tax.

(c)        Limitations. The following limitations apply to the credit allowed in this section:

(1)        The credit allowed in this section may not exceed fifty percent (50%) of the tax against which it is claimed for the taxable year, reduced by the sum of all other credits made by or on behalf of the taxpayer. This limitation applies to the cumulative amount of credit, including carryforwards, claimed by the taxpayer under this section against each tax for the taxable year. Any unused portion of the credit may be carried forward for the succeeding five years.

(2)        No credit may be allowed in this section for any project receiving a loan through the Workforce Housing Loan Program from the North Carolina Housing Finance Agency for qualified North Carolina low‑income housing development, as defined in Section 31.1 of S.L. 2014‑100.

(d)       Allocation. Notwithstanding the provisions of G.S. 105‑131.8 and G.S. 105‑269.15, a pass‑through entity that qualifies for the credit provided in this section may allocate the credit among any of its owners in its discretion as long as an owner's adjusted basis in the pass‑through entity, as determined under the Code at the end of the taxable year in which the federal credit is first claimed, is at least forty percent (40%) of the amount of credit allocated to that owner. Owners to whom a credit is allocated are allowed the credit as if they had qualified for the credit directly. A pass‑through entity and its owners must include with their tax returns for every taxable year in which an allocated credit is claimed a statement of the allocation made by the pass‑through entity and the allocation that would have been required under G.S. 105‑131.8 or G.S. 105‑269.15.

(e)        Qualifying Buildings. As used in this section, the term "qualified North Carolina housing" means a qualified building for which a federal credit was allowed under section 42 of the Code and to which one or more of the following apply:

(1)        The building is used for senior and disabled housing allowing home health and supporting services, including projects meeting the requirements of 42 U.S.C. § 3607.

(2)        The aggregate basis of the building and any land on which it is located is financed at least fifty percent (50%) by federally tax‑exempt bonds.

(3)        The building is located in an area declared a major disaster under 42 U.S.C. § 5121.

(f)        Forfeiture for Disposition. If the taxpayer is required to recapture all or part of a federal credit under that section 42 of the Code with respect to qualified North Carolina housing, the taxpayer must report the recapture event to the Secretary. The taxpayer forfeits the corresponding part of the credit allowed under this section with respect to that qualified North Carolina housing. If the credit was allocated among the owners of a pass‑through entity, the forfeiture applies to the owners in the same proportion that the credit was allocated.

(g)        Liability From Forfeiture. A taxpayer that forfeits a credit under this section is liable for all past taxes avoided as a result of the credit plus interest at the rate established under G.S. 105‑241.21, computed from the date the taxes would have been due if the credit had not been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited. A taxpayer or owner of a pass‑through entity that fails to pay the taxes and interest by the due date is subject to the penalties provided in G.S. 105‑236.

"§ 105‑129.121.  Substantiation.

A taxpayer allowed a credit under this Article must maintain and make available for inspection any information or records required by the Secretary of Revenue. The burden of proving eligibility for a credit and the amount of the credit rests upon the taxpayer.

"§ 105‑129.122.  Report.

The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by taxpayer:

(1)        The number of taxpayers that took the credit allowed in this Article.

(2)        The location of each qualified North Carolina housing for which a credit was taken.

(3)        The total cost to the General Fund of the credits taken."

SECTION 2.  This act is effective for taxable years beginning on or after January 1, 2018.