The proposed bill, Substitute Bill No. 1263, aims to establish a tax credit program for the conversion of commercial properties into residential developments, effective July 1, 2025. The bill defines key terms such as "affordable housing," "commercial building," and "qualified conversion expenditures," and outlines the responsibilities of the Commissioner of Housing in administering the program. Owners of commercial buildings who wish to convert their properties into residential units can apply for tax credit vouchers equal to ten percent of their qualified conversion expenditures, provided they meet certain criteria, including a minimum expenditure threshold of $15,000. The bill also stipulates that the total amount of tax credits reserved in any fiscal year cannot exceed three million dollars.

Additionally, the bill includes provisions for the approval process of conversion plans, requiring owners to submit detailed plans and estimates to the Commissioner for evaluation. Tax credits are structured differently for nonprofit corporations and other owners, with caps set at $50,000 and $30,000 per dwelling unit, respectively. The Commissioner of Revenue Services is tasked with administering the tax credits, which can be carried forward if unused. The bill also allows for the adoption of regulations to facilitate its implementation, ensuring that the conversion efforts align with the state's housing goals.