An Act To Encourage the Construction of Affordable Housing
Sec. 1. 36 MRSA §2535 is enacted to read:
§ 2535. Credit for low-income housing development
A taxpayer is allowed a credit against the tax otherwise due under this chapter as determined under chapter 916.
Sec. 2. 36 MRSA c. 916 is enacted to read:
LOW-INCOME HOUSING DEVELOPMENT TAX CREDIT
§ 6701. Definitions
As used in this section, unless the context otherwise indicates, the following terms have the following meanings:
§ 6702. Low-income housing development tax credit
§ 6703. Recapture of credit
§ 6704. Filing requirements
A qualified taxpayer to which a credit has been allocated under section 6702, subsection 2 shall file with the qualified taxpayer's income tax return under chapter 823 and, if applicable, chapter 825 a copy of the allocation certificate issued by the authority for the qualified development allowing the credit and, if the qualified taxpayer has allocated the credit to constituent taxpayers under section 6702, subsection 3, a copy of the certification to the department for the allocation of the credit among the constituent taxpayers. A person who has received a portion of a credit as a constituent taxpayer under section 6702, subsection 3 shall file with the constituent taxpayer's income tax return under chapter 823 a copy of the allocation certificate issued by the authority for the qualified development allowing the credit and a copy of the certification for the allocation of the credit among the constituent taxpayers.
§ 6705. Insurance premium taxes
A qualified taxpayer who is subject to a tax under chapter 357, does not pay taxes under Part 8 and is otherwise eligible to claim a credit under this section may claim and carry forward the credit against the tax under chapter 357 to the same extent as the taxpayer would have been able to claim or carry forward the credit under the tax in Part 8. All other provisions of this chapter apply to a credit claimed pursuant to this section.
§ 6706. Rules
The authority and the State Tax Assessor, in consultation with each other, shall adopt rules, respectively, necessary to carry out the provisions of this chapter. Rules adopted pursuant to this section are routine technical rules as defined by Title 5, chapter 375, subchapter 2-A.
§ 6707. Compliance monitoring
The authority, in consultation with the State Tax Assessor, shall monitor and oversee compliance with the provisions of this chapter and shall report specific occurrences of noncompliance to the State Tax Assessor.
§ 6708. Report to the Legislature
Sec. 3. Effective date. This Act takes effect January 1, 2018.
This bill creates a tax credit for owners of low-income housing developments that qualify for tax credits under federal law and are financed with tax-exempt bonds, located in the State and determined by the Maine State Housing Authority to be eligible for a federal tax credit whether or not a federal tax credit is allocated to the development. A taxpayer who receives the credit must agree to enter a restrictive covenant to maintain and operate the development as low-income housing and follow various federal requirements for 15 years. The state tax credit is for 6 years and has a recapture provision if the basis of the development goes below a certain amount. An insurance company is allowed to apply the credit against the company's insurance premium tax. The Maine State Housing Authority is required annually to report various details of the qualified developments that received a credit for the prior tax year.