Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                            HB 819.1
                                                HOUSE BILL NO. 819
   INTRODUCED BY P. GREEN, D. BEDEY, M. MALONE, T. WELCH, F. ANDERSON, E. KERR-CARPENTER,
      C. KNUDSEN, S. GIST, G. NIKOLAKAKOS, K. ZOLNIKOV, A. BUCKLEY, S. VINTON, E. STAFMAN, F.
       SMITH, M. BERTOGLIO, L. BREWSTER, J. DOOLING, L. JONES, K. WALSH, D. LOGE, J. READ, R.
      FITZGERALD, M. HOPKINS, J. GILLETTE, T. BROCKMAN, G. PARRY, M. YAKAWICH, J. GROSS, J.
      SMALL, S. O'BRIEN, R. LYNCH, E. MCCLAFFERTY, S. MORIGEAU, J. ELLSWORTH, K. BOGNER, G.
        KMETZ, B. BARKER, J. LYNCH, P. TUSS, D. HARVEY, J. KASSMIER, B. PHALEN, S. STEWART
     PEREGOY, J. KARLEN, B. CARTER, Z. ZEPHYR, M. ROMANO, L. SMITH, D. BAUM, E. MATTHEWS, N.
                               DURAM, N. HASTINGS, E. BOLDMAN, M. CAFERRO
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  A BILL FOR AN ACT ENTITLED: “AN ACT PROVIDING FOR THE MONTANA COMMUNITY
  REINVESTMENT PLAN; PROVIDING FOR DONATIONS TO THE MONTANA COMMUNITY REINVESTMENT
  PLAN THAT PROVIDES FUNDING FOR ATTAINABLE WORKFORCE HOUSING; PROVIDING FOR A TAX
  CREDIT FOR DONATIONS TO THE PROGRAM; PROVIDING FOR DISTRIBUTION OF THE FUNDS TO
  COMMUNITY REINVESTMENT ORGANIZATIONS; PROVIDING FOR COMMUNITY REINVESTMENT
  ORGANIZATION REQUIREMENTS; REQUIRING COMMUNITY REINVESTMENT ORGANIZATIONS TO
  PROCURE MATCHING FUNDS; PROVIDING FOR A MONTANA COMMUNITY REINVESTMENT
  COMMISSION; PROVIDING DEFINITIONS; PROVIDING RULEMAKING AUTHORITY; PROVIDING A
  STATUTORY APPROPRIATION; AMENDING SECTIONS 15-30-2303 AND 17-7-502, MCA; AND PROVIDING
  A DELAYED EFFECTIVE DATE.”
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          WHEREAS, the availability of attainable workforce housing is critical to the well-being of individuals,
  communities, businesses, and organizations of all sizes, and the economy at large; and
          WHEREAS, access to attainable workforce housing provides greater opportunities to realize the
  American dream, allows for more robust job creation, promotes a stronger economy, and is essential to
  ensuring our residents and future generations are able to live, work, and raise their families in the state; and
          WHEREAS, driven by a shortage of housing supply, the state faces a crisis of attainable workforce
  housing that poses substantial challenges to hardworking Montanans, employers, communities, and the state's
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68th Legislature 2023                                                                                            HB 819.1
  economic health; and
           WHEREAS, between 2010 and 2020, the state's population growth of 9.6% outpaced the state's
  housing unit growth of 6.6%, and a substantial factor contributing to tight housing supply has been
  underbuilding of entry-level homes, which are in high demand but low supply; and
           WHEREAS, it is in the public interest of our state, our communities, and our people to find solutions to
  the tight supply of attainable workforce housing; and
           WHEREAS, the health and stability of the state is directly dependent on the health and stability of local
  economic regions that are struggling due to an inadequate workforce, which is creating concerns for negative,
  long-term consequences; and
           WHEREAS, a diverse, capable workforce is essential to retain the economic vitality and prosperity of
  the state within the global marketplace; and
           WHEREAS, the Montana Community Reinvestment Plan Act may generate 2,500 attainable workforce
  housing dwellings allowing qualified individuals to achieve homeownership.
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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           NEW SECTION. Section 1.        Short title. [Sections 1 through 10] may be cited as the "Montana
  Community Reinvestment Plan Act".
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           NEW SECTION. Section 2.        Purpose. The legislature finds and declares the purpose of the Montana
  community reinvestment plan act is to begin to address housing needs and offer a regional, community-based
  solution to creating affordable, attainable workforce housing infrastructure in the state.
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           NEW SECTION. Section 3.        Definitions. As used in [sections 1 through 10], the following definitions
  apply:
           (1)     "Attainable workforce housing" means housing of a cost that an eligible household would spend
  no more than 30% of gross monthly income for a mortgage payment, property taxes, and insurance.
           (2)     "Commission" means the Montana community reinvestment commission established in [section
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68th Legislature 2023                                                                                           HB 819.1
  7].
          (3)      "Community reinvestment organization" means the regional entity or entities established in
  [section 8].
          (4)      "Contribution credit" means the tax credit available to taxpayers in exchange for a contribution
  to the Montana community reinvestment contribution account provided for in [section 6].
          (5)      "Department" means the department of revenue, unless specifically stated otherwise.
          (6)      "Eligible household" means a household earning between 60% and 140% of median income for
  the state.
          (7)      "Montana community reinvestment contribution account" means the account in the state
  special revenue fund and any subaccounts established pursuant to [section 5].
          (8)      "Procurement account" means a restricted account established by each community
  reinvestment organization pursuant to [section 9].
          (9)      "Program" means the Montana community reinvestment plan.
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          NEW SECTION. Section 4.        Montana community reinvestment plan. (1) There is a Montana
  community reinvestment plan that enables regional community reinvestment organizations to reduce the cost of
  housing to an affordable range for Montana's workforce. The program creates a deed-restricted housing
  inventory that becomes a perpetual attainable workforce housing infrastructure for employers, employees, and
  entire communities.
          (2)      The program is funded with taxpayer donations provided for in [section 6(3)] to the Montana
  community reinvestment contribution account and matching funds required in [section 9(4)].
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          NEW SECTION. Section 5.        Montana community reinvestment contribution account. (1) There is
  an account in the state special revenue fund established by 17-2-102 known as the Montana community
  reinvestment contribution account. The purpose of the account is to fund the establishment of affordable,
  attainable workforce housing infrastructure in the state.
          (2)      The account consists of contributions to the Montana community reinvestment plan pursuant to
  [section 4].
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68th Legislature 2023                                                                                                HB 819.1
          (3)      (a) Money in the account must be used by the department for the purpose of administering the
  provisions of [sections 1 through 10]. The department may use 1% of annual contributions for costs incurred by
  the department in administering the program.
          (b)      (i) Except as provided in [section 9(6)], after subtracting administrative costs and subject to
  subsection (3)(b)(ii), the department shall distribute by October 1 annually the money in the account to
  community reinvestment organizations based on the percentage of the combined county gross domestic
  product within the regional boundaries of the organization to that of the state gross domestic product.
          (ii)     If the procurement account cash balance of a community reinvestment organization does not
  meet the requirements of [section 9(4)], the money allocated to that community reinvestment organization must
  be distributed proportionally to the remaining community reinvestment organizations participating in the
  program. The cash balances in the procurement accounts of the remaining community reinvestment
  organizations must meet the requirements of [section 9(4)].
          (4)      Money in the account is statutorily appropriated, as provided in 17-7-502, to the department for
  the purposes described in subsection (3). Money in the account is not subject to legislative fund transfers.
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          NEW SECTION. Section 6.         Montana community reinvestment contribution credit allowed --
  eligibility -- rulemaking. (1) A taxpayer is allowed a credit against the taxes that are otherwise due under Title
  15, chapter 30 or chapter 31, for a contribution to the Montana community reinvestment plan provided for in
  [sections 1 through 10]. The credit is equal to $1 for every 95 cents contributed. The credit may not be refunded
  if the taxpayer has a tax liability less than the amount of the credit. If the amount of credit exceeds the
  taxpayer's tax liability for the current tax year, the excess may be carried back 1 tax year.
          (2)      (a) If the credit allowed under this section is claimed by a small business corporation, a pass-
  through entity, or a partnership, the credit must be attributed to shareholders, owners, or partners using the
  same proportion as used to report the entity's income or loss.
          (b)      A donation by an estate or trust qualifies for the contribution credit. Any credit not used by the
  estate or trust may be attributed to each beneficiary of the estate or trust in the same proportion used to report
  the beneficiary's income from the estate or trust for Montana income tax purposes.
          (3)      The department shall issue contribution credits annually in exchange for certified taxpayer
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68th Legislature 2023                                                                                                HB 819.1
  contributions to the Montana community reinvestment contribution account. Credits must be issued during the
  first quarter of each fiscal year and are subject to the total credit limit provided for in this subsection. The
  department shall issue tax credit certifications as provided in this section and shall announce the availability of
  the credits 30 days prior to their availability. Total credits issued annually may not exceed $28,750,000.
           (4)     Subject to the limit provided for in subsection (3), on receipt of a contribution the department
  shall issue to the taxpayer certification of the amount certified for credit under this section.
           (5)     The department shall deposit certified taxpayer contributions in the Montana community
  reinvestment contribution account provided for in [section 5].
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           NEW SECTION. Section 7.         Montana community reinvestment commission. (1) There is a
  Montana community reinvestment commission administratively attached to the department of revenue.
           (2)     The commission shall certify eligible community reinvestment organizations and provide
  oversight of their compliance with the requirements provided for in [sections 8 and 9].
           (3)     The commission consists of five members appointed by the governor and selected from
  applicants from around the state taking into account geographic and population diversity. Appointments must
  be made without regard to political affiliation and must be made solely for the stewardship of state resources
  and the implementation of the program. A person may not be appointed to the commission unless the person is
  informed or interested and experienced in the subjects of economic development, human resources, housing,
  finance, or development.
           (4)     The department shall appoint a nonvoting member to the commission to provide information
  and guidance relative to issues under the department's purview.
           (5)     (a) Except as provided in subsection (5)(b), members are appointed to a term of 4 years and
  may serve no more than two consecutive 4-year terms.
           (b)     The initial appointees must have staggered terms in order that two of the members serve an
  initial 2-year term. An initial member serving a 2-year term may serve two additional full terms, for a total of 10
  years.
           (6)     The commission shall make recommendations to the department regarding any oversight rules
  necessary for the certification of community reinvestment organizations and for the use of foreclosure mitigation
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  set-aside funds provided for in [section 9(5)].
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          NEW SECTION. Section 8.         Community reinvestment organizations. (1) A community
  reinvestment organization meeting the requirements of [section 9] may be established no later than December
  31, 2024.
          (2)      There may be a maximum of 15 community reinvestment organizations in the state.
          (3)      The geographic boundaries of each community reinvestment organization must be the same as
  the boundaries determined by the department of commerce for certified regional development corporations
  provided for in 90-1-116, in which an established certified regional development corporation exists.
          (4)      Counties that are not within the boundaries of an existing certified regional development
  corporation region may participate in a neighboring community reinvestment organization or create a
  community reinvestment organization that includes one or more other counties not within an existing certified
  regional development corporation subject to the limit provided in subsection (2).
          (5)      Each county wishing to participate in the program shall make an affirmative decision to
  participate by joining a community reinvestment organization. Counties that do not join a community
  reinvestment organization are ineligible to participate in the program.
          (6)      (a) To participate in the program and join an established community reinvestment organization,
  a county shall enact local ordinances that provide for an expedited development and construction review
  process with priority for attainable workforce housing.
          (b)      An incorporated city, consolidated city-county, or county governed by ordinances that do not
  meet the criteria of subsection (6)(a) is not eligible for the program to be administered within the legal or
  jurisdictional boundaries of the incorporated city, consolidated city-county, or county.
          (7)      To be certified by the Montana community reinvestment commission provided for in [section 7],
  a community reinvestment organization shall provide the information required by the commission by January
  15, 2025.
          (8)      A community reinvestment organization certified by the Montana community reinvestment
  commission shall enter into an interagency agreement with the commission pursuant to [section 9(4)]. The
  interagency agreement qualifies the community reinvestment organization to receive funding pursuant to
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68th Legislature 2023                                                                                            HB 819.1
  [section 5].
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          NEW SECTION. Section 9.         Community reinvestment organization requirements. (1) A
  community reinvestment organization shall meet the requirements of this section.
          (2)      A community reinvestment organization must be established as a federally recognized
  charitable organization under 26 U.S.C. 501(c)(3) or (c)(6).
          (3)      Each community reinvestment organization shall create a procurement account for the deposit
  and distribution of funds to participating counties within the community reinvestment organization's region.
          (4)      Each community reinvestment organization shall procure matching funds. At the time of the
  execution of the interagency agreement required by [section 8], the cash balance of a community reinvestment
  organization's procurement account must be greater than or equal to 10 times the amount to be distributed
  pursuant to [section 5(3)].
          (5)      (a) Money in a procurement account must be used as follows:
          (i)      99% must be distributed to participating counties to be used to assist eligible households in
  purchasing attainable workforce housing as provided in this section; and
          (ii)     1% must be dedicated to a foreclosure mitigation set-aside fund to be held locally.
          (b)      Money in a procurement account may not be used for preconstruction, development, or
  construction-related purposes.
          (c)      If a county elects not to participate in the program under [sections 1 through 10], the money
  allocated to that county must be distributed proportionally to the remaining counties participating in the program
  within the same region as the nonparticipating county.
          (6)      An incorporated city, consolidated city-county