Alabama 2024 Regular Session

Alabama House Bill HB346 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~HB346ENROLLED~~
	1	+	HB346ENGROSSED
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3	3		HB346
4		-	V3Q4VVV-3
	4	+	V3Q4VVV-2
5	5		By Representative Almond
6	6		RFD: Ways and Means Education
7	7		First Read: 21-Mar-24
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12		-	5 HB346 ~~Enrolled~~
	12	+	5 HB346 Engrossed
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14	14		First Read: 21-Mar-24
15		-	Enrolled, An Act,
	15	+	A BILL
	16	+	TO BE ENTITLED
	17	+	AN ACT
16	18		Relating to taxation; to establish the Alabama
17	19		Workforce Housing Tax Credit Act; to create the Alabama
18	20		Workforce Housing Tax Credit for qualified workforce housing
19	21		projects; to define certain terms; to provide for maximum
20	22		annual award amounts for qualified projects; to allow the tax
21	23		credits to be claimed for 10 years against the tax liability
22	24		of a qualified taxpayer; to allow a carryforward for earned
23	25		but unused tax credits; to require a portion of the annual
24	26		award cycle cap to be awarded for qualified projects located
25	27		in areas designated as rural by the Alabama Housing Finance
26	28		Authority; and to require the authority to implement and
27	29		administer the provisions of this act.
28	30		BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
29	31		Section 1. This act shall be known and may be cited as
30	32		the Alabama Workforce Housing Tax Credit Act.
31	33		Section 2. Regarding the adoption of qualified
32	34		allocation plans as they relate to the workforce housing tax
33	35		credit by the authority, the authority shall incentivize and
34	36		prioritize four percent qualified projects, or in the case of
35	37		awards under Section 4(f), qualified projects in areas
36		-	identified by the Department of Commerce concerning its
37		-	priorities for the location and type, including new
38		-	construction, rehabilitation, or both, of multifamily housing
39		-	which will support economic development efforts and the
40		-	creation of stable, good-paying jobs in the State of Alabama.
41		-	It is the desire of the Legislature that the efforts of the
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	65	+	28 HB346 Engrossed
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	67	+	awards under Section 4(f), qualified projects in areas
	68	+	identified by the Department of Commerce concerning its
	69	+	priorities for the location and type, including new
	70	+	construction, rehabilitation, or both, of multifamily housing
	71	+	which will support economic development efforts and the
	72	+	creation of stable, good-paying jobs in the State of Alabama.
71	73		It is the desire of the Legislature that the efforts of the
72	74		Department of Commerce in seeking to create jobs will be
73	75		generally supported by the creation of multifamily rental
74	76		housing opportunities supported by the workforce housing tax
75	77		credit.
76	78		Section 3. For the purposes of this act, the following
77	79		terms have the following meanings:
78	80		(1) ALABAMA TAX LIABILITY. The taxes otherwise due
79	81		under Sections 27-3-29, 27-4A-3, 40-16-4, or 40-18-2, Code of
80	82		Alabama 1975.
81	83		(2) AUTHORITY. The Alabama Housing Finance Authority or
82	84		its successor authority or agency.
83	85		(3) AWARD. The issuance by the authority of either of
84	86		the following:
85	87		a. A reservation letter pursuant to the qualified
86	88		allocation plan.
87	89		b. A determination letter for workforce housing tax
88	90		credits to a qualified project during an award cycle, the
89	91		amount of which award shall be claimed in each year of the
90	92		credit period.
91	93		(4) AWARD CYCLE. Each fiscal year or other 12-month
92	94		period designated by the authority over which the authority
93	95		awards workforce housing tax credits to qualified projects.
94		-	(5) AWARD CYCLE CAP. The sum of all of the following:
95		-	a. Five million dollars ($5,000,000) for each year of
96		-	the 10-year credit period as defined in 26 U.S.C. § 42(f)(1).
97		-	Any funds not awarded may be carried forward to the next award
98		-	cycle.
99		-	b. The amount, if any, by which the award cycle cap
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	123	+	56 HB346 Engrossed
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	125	+	awards workforce housing tax credits to qualified projects.
	126	+	(5) AWARD CYCLE CAP. The sum of all of the following:
	127	+	a. Five million dollars ($5,000,000) for each year of
	128	+	the 10-year credit period as defined in 26 U.S.C. § 42(f)(1).
	129	+	Any funds not awarded may be carried forward to the next award
	130	+	cycle.
129	131		b. The amount, if any, by which the award cycle cap
130	132		prescribed by this act for the preceding award cycle exceeds
131	133		the workforce housing tax credits awarded by the authority in
132	134		that award cycle.
133	135		c. The amount of workforce housing tax credits
134	136		recaptured or otherwise disallowed under Section 3(e) in the
135	137		preceding fiscal year.
136	138		(6) CREDIT PERIOD. The 10-year credit period as defined
137	139		in 26 U.S.C. § 42(f)(1), subject to the special rule for the
138	140		first year of the credit period as set forth in 26 U.S.C. §
139	141		42(f)(2).
140	142		(7) DEPARTMENT. The Alabama Department of Revenue, or
141	143		its successor agency.
142	144		(8) ELIGIBILITY CERTIFICATE. A certificate issued by
143	145		the authority to the owner of a qualified project certifying
144	146		that the project is a qualified project that qualifies for the
145	147		workforce housing tax credit authorized by this act and
146	148		specifying the annual amount of workforce housing tax credits
147	149		that may be claimed in each year of the credit period. The
148	150		authority shall issue an eligibility certificate to a
149	151		qualified project upon the authority's approval of a final
150	152		cost certification that complies with the authority's
151	153		requirements.
152		-	(9) FEDERAL LOW-INCOME HOUSING TAX CREDIT or FEDERAL
153		-	TAX CREDIT. The federal tax credit as provided in 26 U.S.C. §
154		-	42.
155		-	(10) FOUR PERCENT QUALIFIED PROJECT. A qualified
156		-	project that is eligible for federal low-income housing tax
157		-	credits pursuant to 26 U.S.C. § 42(h)(4).
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	181	+	84 HB346 Engrossed
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	183	+	requirements.
	184	+	(9) FEDERAL LOW-INCOME HOUSING TAX CREDIT or FEDERAL
	185	+	TAX CREDIT. The federal tax credit as provided in 26 U.S.C. §
	186	+	42.
	187	+	(10) FOUR PERCENT QUALIFIED PROJECT. A qualified
	188	+	project that is eligible for federal low-income housing tax
187	189		credits pursuant to 26 U.S.C. § 42(h)(4).
188	190		(11) MULTIFAMILY HOUSING REVENUE BOND POLICY. The
189	191		authority's policy, as amended from time to time, regarding
190	192		the allocation of tax-exempt bond volume cap for affordable
191	193		multifamily housing.
192	194		(12) QUALIFIED ALLOCATION PLAN. As defined in 26 U.S.C.
193	195		§ 42(m)(1)(B), subject to additions and modifications
194	196		necessary to implement this act.
195	197		(13) QUALIFIED PROJECT. A qualified low-income
196	198		building, as defined in 26 U.S.C. § 42(c)(2), that is located
197	199		in the state, is eligible for the federal low-income housing
198	200		tax credit, and is placed in service on or after January 1,
199	201		2025.
200	202		(14) QUALIFIED TAXPAYER. A taxpayer owning an interest,
201	203		directly or indirectly, through one or more pass-through
202	204		entities, in a qualified project at any time prior to filing a
203	205		tax return claiming a workforce housing tax credit.
204	206		(15) TAXPAYER. An individual, corporation, S
205	207		corporation, partnership, limited partnership, limited
206	208		liability partnership, limited liability company, joint
207	209		venture, financial institution, fiduciary of an estate of a
208	210		trust, or insurer.
209	211		(16) WORKFORCE HOUSING TAX CREDIT or TAX CREDIT. The
210		-	tax credit created by this act.
211		-	Section 4. (a)(1) For applications for federal tax
212		-	credits submitted to the authority on and after January 1,
213		-	2025, the authority, upon approving a federal low-income
214		-	housing tax credit for a qualified project pursuant to the
215		-	authority's qualified allocation plan or multifamily housing
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	239	+	112 HB346 Engrossed
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	241	+	(16) WORKFORCE HOUSING TAX CREDIT or TAX CREDIT. The
	242	+	tax credit created by this act.
	243	+	Section 4. (a)(1) For applications for federal tax
	244	+	credits submitted to the authority on and after January 1,
	245	+	2025, the authority, upon approving a federal low-income
	246	+	housing tax credit for a qualified project pursuant to the
245	247		authority's qualified allocation plan or multifamily housing
246	248		revenue bond policy, may award a workforce housing tax credit
247	249		under this act to the owner of the qualified project so long
248	250		as doing so will not result in exceeding the award cycle cap
249	251		prescribed by this subsection. The workforce housing tax
250	252		credit shall be in an amount determined by the authority to be
251	253		necessary for the financial feasibility of the qualified
252	254		project and consistent with the qualified allocation plan and
253	255		multifamily housing revenue bond policy, as applicable, but
254	256		the annual award for each qualified project shall not be
255	257		greater than two million dollars ($2,000,000).
256	258		(2) The authority shall send written notice of the
257	259		award to the owner of the qualified project. The award notice
258	260		shall state the amount of workforce housing tax credit awarded
259	261		for each year of the qualified project's credit period and
260	262		stipulate that receipt of the tax credit is contingent upon
261	263		issuance of an eligibility certificate.
262	264		(3) Upon issuance of an eligibility certificate, a copy
263	265		of which shall be provided to the department and the Alabama
264	266		Department of Insurance, a workforce housing tax credit shall
265	267		be allowed for the qualified project for each year of the
266	268		credit period in the amount specified in the eligibility
267	269		certificate.
268		-	(4) The total amount of tax credit awards made by the
269		-	authority under this act in each award cycle shall not exceed
270		-	the award cycle cap.
271		-	(b)(1) The tax credit may be allocated by pass-through
272		-	entities to some or all of its partners, members, or
273		-	shareholders, including any not-for-profit entity that is a
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	297	+	140 HB346 Engrossed
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	299	+	certificate.
	300	+	(4) The total amount of tax credit awards made by the
	301	+	authority under this act in each award cycle shall not exceed
	302	+	the award cycle cap.
	303	+	(b)(1) The tax credit may be allocated by pass-through
	304	+	entities to some or all of its partners, members, or
303	305		shareholders, including any not-for-profit entity that is a
304	306		partner, member, or shareholder, in any manner agreed to by
305	307		such persons, regardless of whether or not the person is
306	308		allocated or allowed any portion of any federal low-income
307	309		housing tax credit with respect to the qualified project,
308	310		whether the allocation of the tax credit under the terms of
309	311		the agreement has substantial economic effect within the
310	312		meaning of 26 U.S.C. § 704(b), and whether the person is
311	313		deemed a partner for federal income tax purposes as long as
312	314		the partner or member would be considered a partner or member
313	315		under applicable state law governing such entity, and has been
314	316		admitted as a partner or member on or prior to the date for
315	317		filing the qualified taxpayer's tax return, including any
316	318		amendments thereto, with respect to the year of the tax
317	319		credit. Such pass-through entities or qualified taxpayer may
318	320		assign all or any part of its interest, including its interest
319	321		in the tax credits, to one or more pass-through entities or
320	322		qualified taxpayers, and the qualified taxpayer shall be able
321	323		to claim the tax credit so long as its interest is acquired
322	324		prior to the filing of its tax return claiming the tax credit.
323	325		(2) If the tax credit is used to offset financial
324	326		institution excise tax, the offset shall be limited to the
325	327		state portion of the financial institution excise tax.
326		-	(c) The workforce housing tax credit authorized by this
327		-	act shall not be refundable. Any tax credit not used in a
328		-	taxable year may be carried forward by a qualified taxpayer
329		-	for the succeeding five years.
330		-	(d) Prior to filing the tax return, or in the case of
331		-	pass-through entities, prior to passing the credit to the
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	355	+	168 HB346 Engrossed
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	357	+	state portion of the financial institution excise tax.
	358	+	(c) The workforce housing tax credit authorized by this
	359	+	act shall not be refundable. Any tax credit not used in a
	360	+	taxable year may be carried forward by a qualified taxpayer
	361	+	for the succeeding five years.
	362	+	(d) Prior to filing the tax return, or in the case of
361	363		pass-through entities, prior to passing the credit to the
362	364		qualified taxpayer, a project owner that has been awarded a
363	365		workforce housing tax credit shall submit a copy of the
364	366		eligibility certificate to the department in a manner
365	367		prescribed by the department.
366	368		(e) If under 26 U.S.C. § 42, a portion of any federal
367	369		low-income housing credits taken on a qualified project is
368	370		required to be recaptured or is otherwise disallowed during
369	371		the credit period, the qualified taxpayer claiming workforce
370	372		housing tax credits with respect to the qualified project
371	373		shall also be required to recapture a portion of any tax
372	374		credits authorized by this act. The percentage of workforce
373	375		housing tax credits subject to recapture shall be equal to the
374	376		percentage of federal low-income housing credits subject to
375	377		recapture or otherwise disallowed during such period. Any tax
376	378		credits recaptured or disallowed shall increase the income tax
377	379		liability of the qualified taxpayer who claimed the tax
378	380		credits in a like amount and shall be included on the tax
379	381		return of the qualified taxpayer submitted for the taxable
380	382		year in which the recapture or disallowance event is
381	383		identified. The owner of the qualified project shall report
382	384		any recapture event to the department, the Alabama Department
383	385		of Insurance, authority, and, in the same manner done for the
384		-	recapture of federal low-income housing credits, to the
385		-	qualified taxpayer, if the project owner is not the qualified
386		-	taxpayer.
387		-	(f) For each award cycle, the authority shall award at
388		-	least 20 percent, but not more than 25 percent, of the award
389		-	cycle cap to qualified projects located in areas designated as
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	415	+	of Insurance, authority, and, in the same manner done for the
	416	+	recapture of federal low-income housing credits, to the
	417	+	qualified taxpayer, if the project owner is not the qualified
	418	+	taxpayer.
	419	+	(f) For each award cycle, the authority shall award at
	420	+	least 20 percent, but not more than 25 percent, of the award
419	421		cycle cap to qualified projects located in areas designated as
420	422		rural by the authority, subject to viable requests being
421	423		received. The authority shall award the balance of the
422	424		remaining available award cycle cap to four percent qualified
423	425		projects without any geographic limitation.
424	426		(g) An insurance company claiming a workforce housing
425	427		tax credit against the taxes, licenses, and other fees, fines,
426	428		and penalties imposed, including any retaliatory tax imposed
427	429		on insurance companies by Section 27-3-29, Code of Alabama
428	430		1975, shall not be required to pay any additional tax as a
429	431		result of claiming the tax credit. The workforce housing tax
430	432		credit may fully offset any retaliatory tax imposed by the
431	433		Code of Alabama 1975. A reduction in the taxes of a foreign
432	434		insurance company to the extent obtained through a claim for
433	435		credit under this act does not increase the retaliatory tax
434	436		liability otherwise charged against that company.
435	437		Section 5. The authority shall administer the workforce
436	438		housing tax credit program and shall adopt the guidelines and
437	439		qualified allocation plans necessary to implement and
438	440		administer this act consistent with federal law provided in 26
439	441		U.S.C. § 42. The qualified allocation plan shall provide a
440	442		preference for applications in which there is a commitment
441	443		for: (i) a furnished children's activity center which will be
442		-	made available at no cost to a licensed, qualified, and
443		-	insured childcare provider for after-school care for children
444		-	in grades K through 8 residing at the qualified project during
445		-	ordinary school days from 2:30 pm to 6:00 pm; or (ii) the
446		-	qualified project owner shall subsidize the cost of
447		-	after-school care for children grades K through 8 residing at
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	471	+	224 HB346 Engrossed
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	473	+	for: (i) a furnished children's activity center which will be
	474	+	made available at no cost to a licensed, qualified, and
	475	+	insured childcare provider for after-school care for children
	476	+	in grades K through 8 residing at the qualified project during
	477	+	ordinary school days from 2:30 pm to 6:00 pm; or (ii) the
	478	+	qualified project owner shall subsidize the cost of
477	479		after-school care for children grades K through 8 residing at
478	480		the qualified project for at least three years from the placed
479	481		in service date, by the lesser of $1,000 per year per unit
480	482		occupied by a student participating in the after-school
481	483		program or $50,000 per annum. The authority shall permit
482	484		reserves to be established from project sources to fund such
483	485		subsidy costs. The workforce housing tax credit authorized by
484	486		this act shall not be available to taxpayers that submit an
485	487		application for federal low-income housing tax credits for a
486	488		qualified project after September 30, 2027. No action or
487	489		inaction on the part of the Legislature shall reduce or
488	490		suspend the tax credits authorized by this act in any past or
489	491		future calendar year with respect to a qualified project if
490	492		the application to the authority was substantially complete on
491	493		or prior to September 30, 2027, even if the award is made
492	494		after such date, the qualified project is placed in service
493	495		after September 30, 2027, or the first workforce housing
494	496		credits are available to the qualified taxpayer after
495	497		September 30, 2027.
496	498		Section 6. The tax credit created pursuant to this act
497	499		shall only be claimed with respect to taxable years beginning
498	500		on or after January 1, 2025. The tax credit provided in this
499	501		act shall be subject to the reporting requirements of Section
500		-	40-1-50, Code of Alabama 1975. The department and the Alabama
501		-	Department of Insurance may adopt rules for the administration
502		-	of this act.
503		-	Section 7. This act shall become effective on October
504		-	1, 2024.
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531		-	251 HB346 Enrolled
	528	+	251
	529	+	252 HB346 Engrossed
532	530		Page 10
	531	+	act shall be subject to the reporting requirements of Section
	532	+	40-1-50, Code of Alabama 1975. The department and the Alabama
	533	+	Department of Insurance may adopt rules for the administration
	534	+	of this act.
	535	+	Section 7. This act shall become effective on October
533	536		1, 2024.
534		-	________________________________________________
535		-	Speaker of the House of Representatives
536		-	________________________________________________
537		-	President and Presiding Officer of the Senate
538		-	House of Representatives
539		-	I hereby certify that the within Act originated in and
540		-	was passed by the House 18-Apr-24, as amended.
541		-	John Treadwell
542		-	Clerk
543		-	Senate 07-May-24 Passed
544		-	252
545	537		253
546	538		254
547	539		255
548	540		256
549		-	257
	541	+	257 HB346 Engrossed
	542	+	Page 11
	543	+	1, 2024.
	544	+	House of Representatives
	545	+	Read for the first time and referred
	546	+	to the House of Representatives
	547	+	committee on Ways and Means
	548	+	Education
	549	+	................21-Mar-24
	550	+	Read for the second time and placed
	551	+	on the calendar:
	552	+	1 amendment
	553	+	................11-Apr-24
	554	+	Read for the third time and passed
	555	+	as amended
	556	+	Yeas 103
	557	+	Nays 0
	558	+	Abstains 0
	559	+	................18-Apr-24
	560	+	John Treadwell
	561	+	Clerk
550	562		258
551	563		259
552	564		260
553	565		261
554	566		262
555	567		263
556	568		264
557	569		265
558	570		266
559	571		267
560	572		268
561	573		269
562	574		270
563	575		271
564	576		272
565	577		273
566	578		274
567	579		275
568	580		276
569	581		277
570	582		278
571	583		279
572		-	280
573		-	281
574		-	282
575		-	283
576		-	284
577		-	285
578		-	286