AN ACT RELATING TO THE TAX CREDIT FOR AFFORDABLE HOUSING
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 32 V.S.A. § 5930u(c), (d), and (g) are amended to read:
(c) Amount of credit. A taxpayer who makes an eligible cash contribution shall be entitled to claim against the taxpayer's individual income, corporate, franchise, or insurance premium tax liability a credit in an amount specified on the taxpayer's credit certificate. The first-year allocation of a credit amount to a taxpayer shall also be deemed an allocation of the same amount in each of the following four years.
Affordable The amount of affordable housing tax credits
credit allocated with respect to a project shall be available to the
taxpayer in each of every year for five consecutive tax years,
beginning with the tax year in which the eligible cash contribution is made. Total
tax credits available to the taxpayer shall be the amount of the first-year
allocation plus the succeeding four years’ deemed allocations.
(g) In any
year, the allocating agency shall not award a total amount of tax credits
may award up to $400,000.00 in total first-year credit allocations to
all applicants under this subchapter in excess of $150,000.00.
In any fiscal year, total first-year allocations plus succeeding-year deemed
allocations shall not exceed $2,000,000.00.
Sec. 2. ADMINISTRATION REPORT ON NEW AFFORDABLE HOUSING
The Agency of Commerce and Community Development and the Department of Taxes, in consultation with the Vermont Housing Finance Agency and the Affordable Housing Coalition, are requested to study whether an additional tax credit, or other alternative form of incentive, would enable more low- and moderate-income individuals to become first-time homebuyers in Vermont. The study should include: (a) a description of possible recipients of the credit, for example, whether the credit would be available to employers who provide home buying assistance to employees, to income-eligible homebuyers, or others; (b) any limits on the credit; (c) a description of those who would be eligible for home buying assistance under the proposal; (d) a description of the goals of the credit, including the home buying assistance which would be provided, how and by whom, and the costs of the assistance provided; (e) an analysis of the annual cost of the proposal to the revenues of the state beginning in fiscal year 2008; (f) an analysis of the effectiveness of existing tax credits in other states for employer assistance to low- and moderate-income employees on first-home purchases; and (g) detailed information on the number of first-time homebuyers currently aided by VHFA, including income levels, the form of aid received, the price of homes purchased, whether this initial aid is sufficient to allow continued ownership, and if not, what additional issues need to be addressed. The Agency of Commerce and Community Development and the Department of Taxes shall report their findings to the standing committees of jurisdiction of the House and Senate by December 1, 2006.
Sec. 3. 32 V.S.A. § 312 is amended to read:
§ 312. TAX EXPENDITURE REPORT
(a) For purposes of this section, "tax expenditure" shall mean the actual or estimated loss in tax revenue resulting from any exemption, exclusion, deduction, or credit applicable to the tax.
(b) Tax expenditure reports. Biennially, as part of the budget process, beginning January 15, 2009, the department of taxes shall file with the house committees on ways and means and appropriations and the senate committees on finance and appropriations a report on tax expenditures in the personal and corporate income, sales and use, and meals and rooms tax returns, insurance premium tax and bank franchise tax returns, and education property tax grand lists and such other tax expenditures for which the joint fiscal office and the tax department jointly have produced revenue estimates. The report shall include, for each tax expenditure, the following information:
(1) A description of the tax expenditure.
(2) The most recent fiscal information available on the direct cost of the tax expenditure in the past two years.
(3) The date of enactment of the expenditure.
(4) A description of and estimate of the number of taxpayers directly benefiting from the expenditure provision.
Sec. 4. EFFECTIVE DATE AND TRANSITION RULE
This act shall take effect upon passage except that Sec. 1 (increase in amount available for affordable housing investment tax credits) shall take effect July 1, 2006, and the total amount of first-year tax credits which may be allocated in fiscal year 2007 under 32 V.S.A. § 5930u(g) shall be limited to $300,000.00, and the total amount of first-year tax credits which may be allocated in fiscal years 2008 and after shall be $400,000.00.
The Vermont General Assembly
115 State Street