HSB 274

This bill relates to tax credits and programs administered by the economic development authority (authority). The bill is divided into divisions. DIVISION I —— HOUSING TRUST FUND. The bill removes the $3 million cap placed on the transfer of the real estate transfer tax receipts to the housing trust fund by the treasurer of state. Currently, the treasurer of state transfers percent of real estate transfer tax receipts received by the treasurer of state to the housing trust fund up to $3 million. DIVISION II —— WORKFORCE HOUSING TAX INCENTIVES.119 sets an aggregate tax credit amount limit for certain economic development programs.356 shall not be allocated more than $25 million in tax credits, and of the tax credits allocated to these programs, $10 million of the tax credits is reserved for allocation to qualified housing projects in small cities. The bill increases the workforce housing tax credit allocations from $25 million to $50 million. Of the moneys allocated to workforce housing tax credits, the bill increases the tax credits reserved for qualified housing projects in small cities from $10 million to $20 million. The increased amounts for workforce housing and small city tax credit allocations established in the bill are repealed July 1, 2024. The bill strikes the requirement that the average dwelling unit costs of a proposed housing development not exceed certain dollar amounts per dwelling unit in order to receive workforce housing tax incentives. The bill allows the authority to set the average dwelling unit costs by rule as a requirement for a project to receive workforce housing tax incentives, based upon building materials, labor, site development, and acquisition costs. _____ Currently, upon completion of a housing project, a housing business (housing developer, contractor, or nonprofit that completes a housing project) submits an examination of the project in accordance with the American institute of certified public accountants to the authority.356. The bill also requires the authority to review the information submitted by the housing business prior to notifying the housing business of tax incentive awards. The bill permits the authority to establish a disaster housing recovery period following the declaration of a major disaster by the president of the United States. Currently, the authority may accept applications for disaster recovery housing projects on a continuous basis. DIVISION III —— HIGH QUALITY JOBS PROGRAM —— DAY CARE CENTERS. The bill permits the authority to consider whether a proposed project will provide a licensed child center for use by the business’s employees in determining the business’s eligibility for participation in the high quality jobs program. DIVISION IV —— HIGH QUALITY JOBS PROGRAM —— RURAL COMMUNITIES. The bill provides for tax incentives for eligible businesses in rural communities. “Rural community” is defined in the bill as a city located in this state with a population of 30,000 or less in a county with a population of 50,000 or less. If the rural community is located in more than one county, the rural community is considered to be located in the county that has the greatest taxable base within the city. _____ retained that pay at least 110 percent of the qualifying wage threshold and the amount of the qualifying investment. The tax incentives are based upon a schedule as detailed in the bill.335B. The bill directs the authority to adopt rules to administer the high quality jobs program. This division of the bill takes effect upon enactment. DIVISION V —— INVESTMENTS IN QUALIFYING BUSINESSES AND EQUITY INVESTMENTS IN INNOVATION FUNDS. Under current law the authority must allocate $2 million to investments in qualifying businesses and $8 million to equity investments in innovation funds (equity investments). The division limits the authority’s tax credit allocations for investments in qualifying businesses and equity investments to a maximum aggregate of $10 million. The division requires the authority to determine on or before June of each fiscal year the amount of tax credits to be allocated to each. In addition, any amount of tax credits allocated and not awarded in that fiscal year must be reallocated to either investments in qualifying businesses or to equity investments for the next fiscal year, and those tax credits do not count towards the maximum aggregate of $10 million. This applies to tax credits allocated on or after the fiscal year beginning July 1, 2021, and for each fiscal year thereafter. The division modifies the maximum amount of an investment tax credit that may be issued to a natural person and the person’s spouse or dependent from a calendar year basis to a fiscal year basis. The maximum amount of tax credits that may be issued for equity investments in any one qualifying business is also modified from a calendar year to a fiscal year. The division is effective upon enactment.