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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2040 By: Nichols
AS INTRODUCED
An Act relating to revenue and taxation; a mending 68
O.S. 2021, Section 2357.403, as amended by Section 1,
Chapter 139, O.S.L. 2022 (68 O.S. Supp. 2022, Section
2357.403), which relate s to affordable housing tax
credits; increasing amount of tax credits; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.403, as
amended by Section 1, Chapter 139, O.S.L. 2022 (68 O.S. Supp. 2022,
Section 2357.403), is amended to read as follows:
Section 2357.403 A. This act shall be known and may be cited
as the "Oklahoma Affordable H ousing Act".
B. As used in this section:
1. "Allocation year" means the year for which the Oklahoma
Housing Finance Agency all ocates credits pursuant to this section;
2. "Eligibility statement " means a statement authorized and
issued by the Oklahoma Hou sing Finance Agency certifying that a
given project qualifies for the Oklahoma Affordable Housing Tax
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Credit authorized by this section. The Oklahoma Housing Finance
Agency, under Title 330, Oklahoma Housing Finance Agency, Chapter
36, Affordable Housing Tax Credit Program Rules, shall promulgate
rules establishing criteri a upon which the eligibility statements
will be issued. The eligibility statement shall specify the amount
of Oklahoma Affordable Housing T ax Credits allocated to a qualified
project. The Oklahoma Housing Finance Agency shall only authorize
the tax credits created by this section to qualified projects which
are placed in service after July 1, 2015, but which shall not be
used to reduce tax l iability accruing prior to January 1, 2016;
3. "Federal low-income housing tax credit" means the federal
tax credit as provided in Section 42 of the Internal Revenue Code o f
1986, as amended;
4. "Oklahoma Affordable Housing Tax Credit " means the tax
credit created by this section;
5. "Qualified project" means a qualified low-income building as
that term is defined in Section 42 of the Internal Revenue Code of
1986, as amended; and
6. "Taxpayer" means a person, firm or corporation subject to
the tax imposed by Section 2355 of this title or an insuran ce
company subject to the tax imposed by Section 624 or 628 of Title 36
of the Oklahoma Statutes or other financial institu tion subject to
the tax imposed by Section 2370 of this title.
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C. For qualified proje cts placed in service after July 1, 2015,
the amount of state tax credits created by this section which are
allocated to a project shall not exceed that of the federal low-
income housing tax credits for a qualified project . The total
Oklahoma Affordable Housing Tax Credits allocated to all qualifi ed
projects for an allocation y ear shall not exceed Four Million
Dollars ($4,000,000.00) Ten Million Dollars ($10,000,000.00) . For
purposes of this section, the "credit period" shall mean the period
of ten (10) taxable years and "placed in service" shall have the
same meaning as is app licable under the federal credit program.
D. A taxpayer owning an interest in an investment in a
qualified project sha ll be allowed Oklahoma Affordable Housing Tax
Credits under this se ction for tax years beginning on or after
January 1, 2016, if the Okla homa Housing Finance Agency issues an
eligibility statement for such project, which tax credit shall be
allocated among some or all of the partners, members or shareholders
of the taxpayer owning such interest in any m anner agreed to by such
partners, members or shareholders. Such taxpayer may assign i ts
interest in the investment.
E. An insurance company claiming a cre dit against state premium
tax or retaliatory tax or any other tax im posed by Section 624 or
628 of Title 36 of the Oklahoma Statutes shall not be required to
pay any additional retaliato ry tax under Section 628 of Title 36 of
the Oklahoma Statutes as a res ult of claiming the credit. The
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credit may fully offset any retalia tory tax imposed by Section 628
of Title 36 of the Oklahoma Statutes.
F. The credit authorized by this section shall not be used to
reduce the tax liability of the taxpayer to less than zero ($0.00).
G. Any credit claimed but not used in a taxable year m ay be
carried forward two (2) su bsequent taxable years.
H. The owner of a qualified project eligible for the credit
authorized by this section shall submit, at the time of filing the
tax return with the Oklahoma Tax Commission, an eligibility
statement from the Oklahoma Housing Finance Agency. In the case of
failure to attach the eligibility statement, no credit under t his
section shall be allowed with respect to such project for that year
until required documents are provided to the Tax Commission.
I. If under Section 42 of the Intern al Revenue Code of 1986, as
amended, a portion of any federal low -income housing credi ts taken
on a qualified project is required to be recaptured durin g the first
ten (10) years after a project is placed in service, the tax payer
claiming Oklahoma Affordab le Housing Tax Credits with respect to
such project shall also be required to recaptur e a portion of such
credits. The amount of Oklahoma Affordable Ho using Tax Credits
subject to recapture shall be proportionally equal to the amount of
federal low-income housing credits subject to recapture.
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J. The Oklahoma Housing Finance Agency or the Oklahoma Tax
Commission may require the filing of additional docu mentation
necessary to determine the accuracy of a tax credit claimed.
K. The Oklahoma Affordable Housin g Act shall undergo a review
every five (5) years by a committee of nine (9) persons, to be
appointed three persons each by the Governor, President Pr o Tempore
of the Senate, and the Speaker of the House of Representatives.
SECTION 2. This act shall become effective January 1, 2024.
59-1-6820 MAH 12/15/22