A.B. 62
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ASSEMBLY BILL NO. 62–COMMITTEE ON REVENUE
(ON BEHALF OF THE ADVISORY COMMITTEE ON HOUSING)
PREFILED NOVEMBER 20, 2024
____________
Referred to Committee on Revenue
SUMMARY—Revises provisions relating to transferable tax credits
for affordable housing. (BDR 32-437)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to taxation; revising the procedure for applying
for transferable tax credits for affordable housing;
revising provisions governing the transfer of transferable
tax credits for affordable housing; revising provisions
relating to the amount of transferable tax credits for
affordable housing that may be approved; revising
provisions relating to the expiration of transferable tax
credits for affordable housing; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law authorizes the Housing Division of the Department of Business 1
and Industry to issue transferable tax credits, which are authorized to be taken 2
against certain state taxes, to the sponsor of a project for the acquisition, 3
development, construction, improvement, expansion, reconstruction or 4
rehabilitation of low income housing, as defined by existing federal law. (NRS 5
360.860-360.870; 26 U.S.C. § 42) Under existing law, to be issued transferable tax 6
credits, the project sponsor is required to: (1) apply to, and obtain from, the 7
Division a reservation of an amount of transferable tax credits; (2) close the project 8
within a certain period after obtaining a reservation of transferable tax credits by 9
acquiring title to the project site, entering into an agreement with a licensed 10
contractor to construct the project and obtaining certain financing for the project; 11
and (3) submit to the Division a final application for the issuance of transferable tax 12
credits not less than 45 days before the project closes. A project sponsor that is 13
issued transferable tax credits is authorized to transfer those credits to another 14
entity, and that entity is authorized to transfer the credits to one or more of its 15
subsidiaries or affiliates. (NRS 360.867) 16
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Section 1 of this bill: (1) requires, with certain exceptions, a final application 17
for the issuance of transferable tax credits to be submitted not less than 15 days 18
before the closing of the project rather than not less than 45 days before the closing 19
of the project; (2) authorizes a project sponsor to demonstrate the acquisition of the 20
land to close the project by entering into a long-term ground lease for the project 21
site; and (3) authorizes a project sponsor to transfer transferable tax credits to a 22
member or partner of the project sponsor to any other entity, who may then transfer 23
the transferable tax credits to another entity. 24
Existing law limits to $10,000,000 the amount of transferable tax credits which 25
the Division is authorized to approve in each fiscal year, with certain exceptions. If 26
the Division determines that approval of more than $10,000,000 of transferable tax 27
credits in a fiscal year is necessary to ensure the maximum development of 28
affordable housing through the issuance of transferable tax credits, the Division is 29
authorized to approve not more than $13,000,000 of transferable tax credits in that 30
fiscal year and must reduce the amount of transferable tax credits authorized to be 31
approved in the next fiscal year by the amount of credits that are approved in excess 32
of $10,000,000. (NRS 360.868) Section 2 of this bill provides that any such 33
reduction to the amount of transferable tax credits authorized to be approved in a 34
fiscal year must first reduce the amount of unused transferable tax credits from 35
prior fiscal years that are available for approval before the amount of transferable 36
tax credits available for approval in a fiscal year is reduced below $10,000,000. 37
Additionally, section 2 increases from $40,000,000 to $100,000,000 the total 38
amount of transferable tax credits for affordable housing that the Division is 39
authorized to approve for all fiscal years. Finally, section 2 provides that the 4-year 40
period during which transferable tax credits may be used begins on the date on 41
which the Division notifies the project sponsor that transferable tax credits will be 42
issued rather than on the date on which the Division issues the transferable tax 43
credits. 44
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 360.867 is hereby amended to read as follows: 1
360.867 1. On behalf of a project, the project sponsor may 2
apply to the Division for a certificate of eligibility for transferable 3
tax credits which may be applied to: 4
(a) Any tax imposed by chapter 363A or 363B of NRS; 5
(b) The gaming license fees imposed by the provisions of 6
NRS 463.370; 7
(c) Any tax imposed by chapter 680B of NRS; or 8
(d) Any combination of the fees and taxes described in 9
paragraphs (a), (b) and (c). 10
2. To apply for a certificate of eligibility for transferable tax 11
credits, the project sponsor must: 12
(a) Submit an application on a form prescribed by the Division; 13
and 14
(b) Comply with the requirements to obtain an allocation of 15
federal low-income housing tax credits which are set forth in the 16
qualified allocation plan. 17
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3. The Division shall: 1
(a) Review each application for a certificate of eligibility for 2
transferable tax credits submitted pursuant to subsection 2 and any 3
supporting documents to determine whether the requirements for 4
eligibility for a reservation of transferable tax credits are met and the 5
amount of transferable tax credit threshold points awarded to the 6
project; 7
(b) Determine the amount of transferable tax credits for which 8
the project may be eligible, which amount must equal the amount 9
determined by the Division to be necessary to make the project 10
financially feasible after considering all other sources of financing 11
for the project; and 12
(c) Reserve the amount of transferable tax credits for which each 13
project is determined to be eligible pursuant to paragraph (b) in the 14
order of the amount of transferable tax credit threshold points 15
awarded to each such project pursuant to paragraph (a) until a 16
reservation is made for each project or the amount of transferable 17
credits reserved for the fiscal year is equal to the amount of 18
transferable tax credits which the Division is authorized to approve 19
for the fiscal year pursuant to NRS 360.868, whichever occurs first. 20
If the amount of transferable tax credits reserved for the fiscal year 21
reaches the amount of transferable tax credits which the Division is 22
authorized to approve for the fiscal year pursuant to NRS 360.868 23
before each eligible project is reserved the full amount of 24
transferable tax credits for which it is determined to be eligible 25
pursuant to paragraph (b), the Division may take any action that the 26
Division determines will ensure the maximum development of 27
affordable housing in this State, including, without limitation, 28
proportionally reducing the reservation of each project for which 29
transferable tax credits are reserved or reserving for the last project 30
to receive a reservation of transferable tax credits an amount of 31
transferable tax credits that is less than the full amount of 32
transferable tax credits for which the project was determined to be 33
eligible pursuant to paragraph (b). 34
4. If the Division reserves transferable tax credits for a project 35
pursuant to subsection 3, the Division shall provide written notice of 36
the reservation which identifies the amount of the tax credits 37
reserved for the project to: 38
(a) The project sponsor; 39
(b) The Department; 40
(c) The Nevada Gaming Control Board; 41
(d) The Office of Finance; and 42
(e) The Fiscal Analysis Division of the Legislative Counsel 43
Bureau. 44
5. The Division: 45
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(a) Shall terminate a reservation of transferable tax credits if the 1
project for which the reservation is awarded is not closed within 2
the period specified in paragraph (a) of subsection 6 unless, before 3
the expiration of that period, the Division receives from the project 4
sponsor a written request for an extension of not more than 45 days. 5
The Division may grant only one extension pursuant to this 6
paragraph and, if the project is not closed before the expiration of 7
the extension period, the Division must terminate the reservation of 8
transferable tax credits. A request for an extension submitted 9
pursuant to this paragraph must be accompanied by proof 10
satisfactory to the Division that: 11
(1) The requirements for financing the project have been 12
substantially completed; 13
(2) The delay in closing was the result of circumstances that 14
could not have been anticipated by and were outside the control of 15
the project sponsor at the time the application was submitted by the 16
project sponsor; and 17
(3) The project will be closed not later than 45 days after the 18
Division receives the request. 19
(b) May terminate a reservation of transferable tax credits if the 20
Division determines that any event, circumstance or condition 21
occurs for which a reservation of federal low-income housing tax 22
credits may be terminated. If transferable tax credits are terminated 23
pursuant to this paragraph, the Division may issue a reservation for 24
the amount of transferable tax credits terminated to other projects 25
eligible for transferable tax credits in the order of the amount of 26
transferable tax credit threshold points awarded to each such project 27
pursuant to paragraph (a) of subsection 3. 28
6. Except as otherwise provided in this section, to be issued 29
transferable tax credits: 30
(a) Not later than 270 days after the Division provides written 31
notice of the reservation of transferable tax credits pursuant to 32
subsection 4, the project sponsor must demonstrate to the Division 33
that the project has been closed by providing proof satisfactory to 34
the Division that the project sponsor has: 35
(1) Purchased and holds title in fee simple to , or has entered 36
into a long-term ground lease for, the project site in the name of 37
the project sponsor. 38
(2) Entered into a written agreement with a contractor who is 39
licensed in this State to begin construction. 40
(3) Obtained adequate financing for the construction of the 41
project. The applicant must provide written commitments or 42
contracts from third parties. 43
(4) Executed a written commitment for a loan for permanent 44
financing for the construction of the project in an amount that 45
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ensures the financial feasibility of the project. The commitment may 1
be subject to the condition that the construction is completed and the 2
project is appraised for an amount sufficient to justify the loan in 3
accordance with the requirements of the lender for credit. If the 4
project is a rural development project that receives loans or grants 5
from the United States Department of Agriculture, the applicant 6
must provide a form approved by the Division that indicates that 7
money has been obligated for the construction of the project before 8
the expiration of the period. An advance of that money is not 9
required before the expiration of the period. 10
(b) Not less than [45] 15 days before the project is closed, the 11
project sponsor must submit to the Division a final application for 12
transferable tax credits on a form provided by the Division and such 13
other information as the Division deems necessary to determine 14
whether the project qualifies for the issuance of transferable tax 15
credits. Upon receipt of a final application pursuant to this 16
paragraph, the Division shall complete a review of the project and 17
the project sponsor. If, after such review, the Division determines 18
that the project complies with the requirements upon which 19
transferable tax credits were reserved pursuant to this section and a 20
declaration of restrictive covenants and conditions will be recorded 21
in the office of the county recorder for the county in which the 22
project is located: 23
(1) The Division shall: 24
(I) Determine the appropriate amount of transferable tax 25
credits for the project, which must be the amount the Division 26
determines is necessary to make the project financially feasible after 27
all other sources of funding are allocated and paid toward the final 28
cost of the project and may not exceed the amount of transferable 29
tax credits reserved for the project pursuant to this section; and 30
(II) Notify the project sponsor that the transferable tax 31
credits will be issued; 32
(2) Within 30 days after the receipt of the notice, the project 33
sponsor shall make an irrevocable declaration of the amount of 34
transferable tax credits that will be applied to each fee or tax set 35
forth in subsection 1, thereby accounting for all of the credits which 36
will be issued; and 37
(3) Upon receipt of the declaration described in subparagraph 38
(2), the Division shall issue transferable tax credits to the project 39
sponsor in the amount approved by the Division. The project 40
sponsor may transfer the transferable tax credits to a member or 41
partner of the project sponsor or to any other entity. The project 42
sponsor shall notify the Division upon transferring any transferable 43
tax credits. An entity to which a project sponsor transfers any 44
transferable tax credits may transfer those transferable tax credits to 45
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one or more of its subsidiaries or affiliates and shall notify the 1
Division upon making any such transfer. The Division shall notify 2
the Department of Taxation, the Office of Finance, the Fiscal 3
Analysis Division of the Legislative Counsel Bureau and the 4
Nevada Gaming Control Board of all transferable tax credits issued, 5
segregated by each fee or tax set forth in subsection 1, and of all 6
transferable tax credits transferred, segregated by each fee or tax set 7
forth in subsection 1. 8
7. Upon completion of the project, the project sponsor shall 9
submit to the Division a certification of costs on a form provided by 10
the Division and such other information as the Division deems 11
necessary to determine the final cost of the project. If, based upon 12
the final cost of the project indicated in the certification of costs, the 13
Division determines that the amount of transferable tax credits 14
issued by the Division to the project sponsor is greater than the 15
amount of transferable tax credits to which the project sponsor is 16
entitled: 17
(a) The Division shall notify the project sponsor, the Department 18
of Taxation, the Office of Finance, the Fiscal Analysis Division of 19
the Legislative Counsel Bureau and the Nevada Gaming Control 20
Board that the project sponsor is required to repay the portion of the 21
transferable tax credits to which the project sponsor is not entitled. 22
The notice must specify the amount of transferable tax credits that 23
the project sponsor is required to repay. 24
(b) The project sponsor shall repay to the Department of 25
Taxation or the Nevada Gaming Control Board, as applicable, the 26
portion of the transferable tax credits to which the project sponsor is 27
not entitled. 28
8. The project sponsor may submit a request to the 29
Administrator of the Division to protect from disclosure any 30
information in the application which, under generally accepted 31
business practices, would be considered a trade secret or other 32
confidential proprietary information of the business. After 33
consulting with the business, the Administrator of the Division shall 34
determine whether to protect the information from disclosure. The 35
decision of the Administrator of the Division is final and is not 36
subject to judicial review. If the Administrator of the Division 37
determines to protect the information from disclosure, the protected 38
information: 39
(a) Is confidential proprietary information of the business; 40
(b) Is not a public record; 41
(c) Must be redacted by the Administrator of the Division from 42
any copy of the application that is disclosed to the public; and 43
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(d) Must not be disclosed to any person who is not an officer or 1
employee of the Division unless the lead participant consents to the 2
disclosure. 3
9. The Division may adopt any regulations necessary to carry 4
out the provisions of NRS 360.860 to 360.870, inclusive. 5
10. The Nevada Tax Commission and the Nevada Gaming 6
Commission: 7
(a) Shall adopt regulations prescribing the manner in which 8
transferable tax credits described in this section will be 9
administered. 10
(b) May adopt any other regulations that are necessary to carry 11
out the provisions of NRS 360.860 to 360.870, inclusive. 12
11. As used in this section: 13
(a) “Affiliate” means a person who, directly or indirectly 14
through one or more intermediaries, controls, is controlled by or is 15
under common control with a specified person. 16
(b) “Certification of costs” means a report from an independent 17
certified public accountant attesting: 18
(1) To the amount of the actual costs of construction of the 19
project; and 20
(2) That those costs may be included in the eligible basis of 21
the project pursuant to the provisions of 26 U.S.C. § 42. 22
(c) “Subsidiary” means an entity in which a person owns 23
beneficially or of record 50 percent or more of the outstanding 24
equity interests. 25
(d) “Transferable tax credit threshold points” means points 26
awarded based on specific objectives determined by the Division 27
through the dissemination of a strategic plan for the development of 28
affordable housing created by the Division, the review of housing 29
data and the receipt of input from persons interested in the 30
development of affordable housing. 31
Sec. 2. NRS 360.868 is hereby amended to read as follows: 32
360.868 1. Except as otherwise provided in this subsection, 33
the Division shall not approve any application for transferable tax 34
credits submitted pursuant to NRS 360.867 if: 35
(a) Approval of the application would cause the total amount of 36
transferable tax credits approved pursuant to NRS 360.867 for each 37
fiscal year to exceed $10,000,000. Any portion of the $10,000,000 38
per fiscal year for which transferable tax credits have not previously 39
been approved may be carried forward and made available for 40
approval during the next or any future fiscal year. If the Division 41
determines that approval of an application that would cause the total 42
amount of transferable tax credits approved pursuant to NRS 43
360.867 in a fiscal year to exceed $10,000,000 is necessary to 44
ensure the maximum development of affordable housing in this 45
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State through the approval of transferable tax credits pursuant to 1
NRS 360.867, the Division may approve the application unless the 2
approval of the application would cause the total amount of 3
transferable tax credits approved pursuant to NRS 360.867 in the 4
fiscal year to exceed $13,000,000. If the Division approves an 5
application for transferable tax credits that causes the total amount 6
of transferable tax credits approved pursuant to NRS 360.867 in a 7
fiscal year to exceed $10,000,000, the Division must reduce the 8
amount of transferable tax credits which may be approved pursuant 9
to NRS 360.867 in the next fiscal year by the amount of transferable 10
tax credits approved in excess of $10,000,000 in the previous fiscal 11
year. Any reduction made pursuant to this paragraph to the 12
amount of transferable tax credits which may be approved 13
pursuant to NRS 360.867 in a fiscal year must be made to the 14
amount of carried forward transferable tax credits available for 15
approval in a fiscal year before the amount of transferable tax 16
credits which may be approved in a fiscal year is reduced below 17
$10,000,000. 18
(b) Approval of the application would cause the total amount of 19
transferable tax credits approved for all fiscal years pursuant to NRS 20
360.867 to exceed [$40,000,000.] $100,000,000. 21
2. The transferable tax credits issued to a project sponsor 22
pursuant to NRS 360.867 expire 4 years after the date on which the 23
Division notifies the project sponsor that the transferable tax 24
credits [are] will be issued [to the project sponsor.] as required by 25
subsection 6 of NRS 360.867. 26
Sec. 3. This act becomes effective on July 1, 2025. 27
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