Limiting and discontinuing the Kansas affordable housing tax credit and expanding transferability of Kansas housing investor tax credits.
Impact
The modification in the bill is likely to have a significant impact on low-income and affordable housing development in Kansas. By eliminating the tax credits for qualified developments that receive the lesser 4% federal tax credits, the bill may discourage development in markets that are traditionally more resource-strapped. However, the continuation of support for developments eligible for 9% federal tax credits, at least until the 2028 cut-off, recognizes and supports higher levels of investment necessary for sustainable affordable housing projects.
Summary
House Bill 2289 seeks to amend the Kansas affordable housing tax credit act by discontinuing credits for certain qualified developments, specifically those receiving a 4% federal tax credit. Importantly, the bill limits the aggregate amount of such credits and establishes a sunset provision that discontinues all credits after the 2028 qualified allocation plan. This significant adjustment aims to refine the structure of tax incentives related to affordable housing in Kansas.
Sentiment
Discussions involving HB 2289 are polarized, with supporters emphasizing the need for a more sustainable and focused approach to how tax credits are allocated and utilized in the realm of affordable housing. Proponents argue that the bill will streamline tax incentives and foster better housing opportunities by creating a more effective credit allocation system. Conversely, opponents worry that the bill may hinder efforts to develop affordable housing in smaller markets by removing essential funding mechanisms, especially in rural areas where development costs remain high, and tax incentives are crucial.
Contention
Key points of contention surrounding HB 2289 include the fairness of discontinuing credits for the 4% developments, which are vital for lower-income housing initiatives. Critics argue that while the intention is to simplify and strengthen the overall housing tax credit framework, the approach may inadvertently limit housing accessibility for those who need it most. The debate highlights the challenge of balancing fiscal responsibility with the urgent need for adequate affordable housing across Kansas.
Expanding the use of bond proceeds under the Kansas reinvestment housing incentive district act and the transferability of income, privilege and premium tax credits issued under the Kansas housing investor tax credit act.
Expanding the use of bond proceeds under the Kansas rural housing incentive district act, the transferability of income, privilege and premium tax credits issued under the Kansas housing investor tax credit act and enacting the Kansas urban housing incentive district act.
Decreasing the corporate income tax rate, discontinuing tax credits of the high performance incentive program and payroll withholding tax benefits of the promoting employment across Kansas act and repealing certain unused tax credits.
Enacting the Kansas film and digital media industry production development act, providing a tax credit, sales tax exemption and loans and grants to incentivize film, video and digital media production in Kansas, establishing a program to be administered by the secretary of commerce for the purpose of developing such production in Kansas, requiring the secretary of commerce to issue reports on the economic impact, providing sales tax exemptions for purchases by a certain community theaters and purchases and sales made by the friends of cedar crest association and establishing an income, privilege and premium tax credit for employers that employ members of the Kansas army and air national guard and establishing an income tax credit for employees that are members thereof.
Establishing an income, privilege and premium tax credit for employers that employ members of the Kansas army and air national guard and establishing an income tax credit for employees that are members thereof.
House Substitute for SB 37 by Committee on Financial Institutions and Pensions - Modifying income tax rates for individuals, exempting all social security benefits from Kansas income tax, increasing the Kansas standard deduction and the Kansas personal exemption, decreasing the privilege tax normal tax, establishing a 0% state rate for sales and use taxes for food and food ingredients on July 1, 2024, and modifying the percent credited to the state highway fund, increasing the extent of property tax exemption for residential property from the statewide school levy, decreasing the rate of ad valorem tax imposed by a school district, abolishing the local ad valorem tax reduction fund and the county and city revenue sharing fund and providing for certain transfers to the state school district finance fund.
Expanding the use of bond proceeds under the Kansas rural housing incentive district act, the transferability of income, privilege and premium tax credits issued under the Kansas housing investor tax credit act and enacting the Kansas urban housing incentive district act.