THE SENATE

S.B. NO.

1169

TWENTY-NINTH LEGISLATURE, 2017

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to the low-income housing tax credit.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Section 235-110.8, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (f) to read:

     "(f)  For the purposes of this section, the determination of:

     (1)  Qualified basis and qualified low-income building shall be made under section 42(c)[;] of the Internal Revenue Code;

     (2)  Eligible basis shall be made under section 42(d)[;] of the Internal Revenue Code;

     (3)  Qualified low-income housing project shall be made under section 42(g)[;] of the Internal Revenue Code; and

     (4)  Recapture of credit shall be made under section 42(j)[,] of the Internal Revenue Code, except that the tax for the taxable year shall be increased under section 42(j)(1) of the Internal Revenue Code, only with respect to credits that were used to reduce state income taxes[; and

     (5)  Application of at-risk rules shall be made under section 42(k);

of the Internal Revenue Code]."

     2.  By amending subsection (i) to read:

     "(i)  The credit allowed under this section shall be claimed against net income tax liability for the taxable year.  For the purpose of deducting this tax credit, net income tax liability means net income tax liability reduced by all other credits allowed the taxpayer under this chapter.

     A tax credit under this section that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.  All claims for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed.  Failure to properly and timely claim the credit shall constitute a waiver of the right to claim the credit.  A taxpayer may claim a credit under this section only if the building or project is a qualified low-income housing building or a qualified low-income housing project under section 42 of the Internal Revenue Code.

     Section 42(k) (with respect to application of at-risk rules), section 465 (with respect to deductions limited to amount at risk), and section 469 (with respect to passive activity losses and credits limited) of the Internal Revenue Code shall not be applied [in] with respect to investments in buildings and projects claiming the credit under this section."

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $         or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 to establish one full-time equivalent (1.00 FTE) position in the Hawaii housing finance and development corporation to oversee the low-income housing tax credit program.

     The sums appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act.

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act, upon its approval, shall take effect on January 1, 2018, and shall apply to qualified low-income buildings awarded credits beginning after December 31, 2017; provided that:

     (1)  The amendments made in section 1 of this Act shall not be repealed when section 235-110.8, Hawaii Revised Statutes, is reenacted on December 31, 2021, pursuant to Act 129, Session Laws of Hawaii 2016; and

     (2)  Section 2 of this Act shall take effect on July 1, 2017.

 

INTRODUCED BY:

_____________________________



Report Title:

Low-income Housing Tax Credit; Hawaii Housing Finance and Development Corporation

 

Description:

Specifies that certain provisions of the Internal Revenue Code related to at-risk rules and deductions and to passive activity loss do not apply with respect to claims for the state low-income housing tax credit.  Appropriates funds to establish one position in the Hawaii Housing Finance and Development Corporation to oversee the Low-Income Housing Tax Credit Program.

 

 

 

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