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H.858

Introduced by Committee on General, Housing and Military Affairs

Date:

Subject:  Tax credit for affordable housing; employer‑assisted housing, home ownership activities

Statement of purpose:  This bill would amend the tax credit for affordable housing to allow the credit to be taken for the costs of employer‑assisted housing and home ownership activities.  It would also increase the cap on the total amount of affordable housing tax credits that may be taken in any calendar year from $150,000.00 to $500,000.00, of which not more than $100,000.00 may be for credits to support home ownership activities.

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 is amended to read:

§ 5930u.  TAX CREDIT FOR AFFORDABLE HOUSING

(a)  As used in this section:

(1)  “Affordable housing project” or “project” means a project identified in 26 U.S.C. § 42(g).

(2)  “Allocation plan” means the plan created by the Vermont housing finance agency and approved by the committee to set forth the process and criteria under which specific housing developments or activities in support of home ownership, such as employer‑assisted housing programs, will be selected to receive affordable housing tax credits.  The allocation plan shall limit the amount of benefit allowed for an individual family and other home ownership activities.

(2)(3)  “Affordable housing tax credits” means the tax credit provided by this subchapter.

(3)(4)  “Allocating agency” means the Vermont housing finance agency.

(4)(5)  “Committee” means the joint committee on tax credits consisting of five members; a representative from the department of housing and community affairs, the Vermont housing and conservation board, the Vermont housing finance agency, the Vermont state housing authority, and the office of the governor.

(5)(6)  “Credit certificate” means a certificate issued by the allocating agency to a taxpayer that specifies the amount of affordable housing tax credits that can be applied against the taxpayer’s individual or corporate income tax or franchise or insurance premium tax liability as provided in this subchapter.

(6)(7)  “Eligible applicant” means any municipality, private sector developer, department of state government as defined in 10 V.S.A. § 6302(a), nonprofit organization qualifying under Section 501(c)(3) of the Internal Revenue Code, or cooperative housing organization, or employer with employees residing in the state, the purpose of which is the creation and retention of affordable housing for lower income Vermonters, and the bylaws that require that housing to be maintained as affordable housing for lower income Vermonters on a perpetual basis.

(7)(8)  “Eligible cash contribution” means an amount of cash contributed to the owner, developer, or sponsor of an affordable housing project and determined by the allocating agency as eligible for affordable housing tax credits.

(8)(9)  “Section 42 credits” means tax credit provided by 26 U.S.C. §§ 38 and 42.

(b)(1)  Affordable housing credit allocation.  Prior to the placement of an affordable housing project in service, the owner, or a person having the right to acquire ownership of a building, may apply to the committee for an allocation of affordable housing tax credits under this section.  The committee shall advise the allocating agency on an affordable housing tax credit application based upon published priorities and criteria.  An eligible applicant may apply to the allocating agency for an allocation of affordable housing tax credits under this section for an affordable housing project or for activities in support of home ownership that have been specifically authorized by the allocation plan. In the case of an affordable housing project identified in 26 U.S.C. § 42(g), the eligible applicant must also be the owner or a person having the right to acquire ownership of a building and must make an application prior to the placement of the affordable housing project in service.  The allocating agency shall issue a letter of approval if it finds that the applicant meets the priorities, criteria, and other provisions of subdivision (2) of this subsection.  The burden of proof shall be on the applicant.

(2)  Upon receipt of a completed application, an allocation of affordable housing tax credits with respect to a project under this section shall be granted to an applicant, provided the applicant demonstrates to the satisfaction of the committee allocating agency all of the following:

(A)  The owner of the project has received from the allocating agency a binding commitment for, a reservation or allocation of, or an out-of-cap determination letter for, Section 42 credits or meets the specific requirements of the allocation plan for activities in support of homeownership;

(B)  The project has received community support.

(c)  Amount of credit. A taxpayer who makes 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.

(d)  Availability of credit.  Affordable housing tax credits allocated with respect to a project shall be available to the taxpayer in each of five consecutive tax years, beginning with the tax year in which the eligible cash contribution is made.

(e)  Claim for credit.  A taxpayer claiming affordable housing tax credits shall submit with each return on which such credit is claimed a copy of the allocating agency’s credit allocation to the affordable housing project and the taxpayer’s credit certificate.  Any unused affordable housing tax credit may be carried forward to reduce the taxpayer’s tax liability for no more than 14 succeeding tax years, following the first year the affordable housing tax credit is allowed.

(f)  [Deleted.]

(g)  In any calendar year, the allocating agency shall not award a total amount of tax credits to all applicants under this subchapter in excess of $150,000.00 $500,000.00 and shall not award more than $100,000.00 of tax credits to support homeownership activities.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us