Bill Summary – FastDemocracy

1                                STATE OF OKLAHOMA
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 2                   2nd Session of the 59th Legislature (2024)
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 3   HOUSE BILL 4018                         By: McBride
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 6                                 AS INTRODUCED
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 7            An Act relating to revenue and taxation; amending 68
 7            O.S. 2021, Section 2357.403, as amended by Section 1,
 8            Chapter 139, O.S.L. 2022 (68 O.S. Supp. 2023, Section
 8            2357.403), which relates to affordable housing tax
 9            credits; providing for reallocation of credits; and
 9            providing an effective date.
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14   BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15       SECTION 1.       AMENDATORY      68 O.S. 2021, Section 2357.403, as
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16   amended by Section 1, Chapter 139, O.S.L. 2022 (68 O.S. Supp. 2023,
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17   Section 2357.403), is amended to read as follows:
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18       Section 2357.403    A.   This act shall be known and may be cited
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19   as the "Oklahoma Affordable Housing Act".
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20       B.   As used in this section:
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21       1.   "Allocation year" means the year for which the Oklahoma
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22   Housing Finance Agency allocates credits pursuant to this section;
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23       2.   "Eligibility statement" means a statement authorized and
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24   issued by the Oklahoma Housing Finance Agency certifying that a
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     Req. No. 9829                                                      Page 1
 1   given project qualifies for the Oklahoma Affordable Housing Tax
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 2   Credit authorized by this section.     The Oklahoma Housing Finance
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 3   Agency, under Title 330, Oklahoma Housing Finance Agency, Chapter
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 4   36, Affordable Housing Tax Credit Program Rules, shall promulgate
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 5   rules establishing criteria upon which the eligibility statements
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 6   will be issued.     The eligibility statement shall specify the amount
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 7   of Oklahoma Affordable Housing Tax Credits allocated to a qualified
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 8   project.   The Oklahoma Housing Finance Agency shall only authorize
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 9   the tax credits created by this section to qualified projects which
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10   are placed in service after July 1, 2015, but which shall not be
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11   used to reduce tax liability accruing prior to January 1, 2016;
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12       3.   "Federal low-income housing tax credit" means the federal
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13   tax credit as provided in Section 42 of the Internal Revenue Code of
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14   1986, as amended;
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15       4.   "Oklahoma Affordable Housing Tax Credit" means the tax
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16   credit created by this section;
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17       5.   "Qualified project" means a qualified low-income building as
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18   that term is defined in Section 42 of the Internal Revenue Code of
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19   1986, as amended; and
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20       6.   "Taxpayer" means a person, firm or corporation subject to
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21   the tax imposed by Section 2355 of this title or an insurance
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22   company subject to the tax imposed by Section 624 or 628 of Title 36
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23   of the Oklahoma Statutes or other financial institution subject to
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24   the tax imposed by Section 2370 of this title.
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     Req. No. 9829                                                     Page 2
 1       C.   For qualified projects placed in service after July 1, 2015,
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 2   the amount of state tax credits created by this section which are
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 3   allocated to a project shall not exceed that of the federal low-
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 4   income housing tax credits for a qualified project.    The total
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 5   Oklahoma Affordable Housing Tax Credits allocated to all qualified
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 6   projects for an allocation year shall not exceed Four Million
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 7   Dollars ($4,000,000.00).   For purposes of this section, the "credit
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 8   period" shall mean the period of ten (10) taxable years and "placed
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 9   in service" shall have the same meaning as is applicable under the
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10   federal credit program.    Reallocated and rolled over credits will
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11   count against the Four Million Dollar ($4,000,000.00) limit of their
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12   original allocation year and not count against the limit of the year
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13   in which they are allocated.
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14       D.   A taxpayer owning an interest in an investment in a
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15   qualified project shall be allowed Oklahoma Affordable Housing Tax
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16   Credits under this section for tax years beginning on or after
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17   January 1, 2016, if the Oklahoma Housing Finance Agency issues an
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18   eligibility statement for such project, which tax credit shall be
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19   allocated among some or all of the partners, members or shareholders
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20   of the taxpayer owning such interest in any manner agreed to by such
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21   partners, members or shareholders.   Such taxpayer may assign its
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22   interest in the investment.
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23       E.   An insurance company claiming a credit against state premium
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24   tax or retaliatory tax or any other tax imposed by Section 624 or
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     Req. No. 9829                                                      Page 3
 1   628 of Title 36 of the Oklahoma Statutes shall not be required to
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 2   pay any additional retaliatory tax under Section 628 of Title 36 of
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 3   the Oklahoma Statutes as a result of claiming the credit.     The
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 4   credit may fully offset any retaliatory tax imposed by Section 628
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 5   of Title 36 of the Oklahoma Statutes.
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 6      F.   The credit authorized by this section shall not be used to
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 7   reduce the tax liability of the taxpayer to less than zero ($0.00).
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 8      G.   Any credit claimed but not used in a taxable year may be
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 9   carried forward two (2) subsequent taxable years.
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10      H.   The owner of a qualified project eligible for the credit
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11   authorized by this section shall submit, at the time of filing the
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12   tax return with the Oklahoma Tax Commission, an eligibility
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13   statement from the Oklahoma Housing Finance Agency.   In the case of
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14   failure to attach the eligibility statement, no credit under this
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15   section shall be allowed with respect to such project for that year
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16   until required documents are provided to the Tax Commission.
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17      I.   If under Section 42 of the Internal Revenue Code of 1986, as
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18   amended, a portion of any federal low-income housing credits taken
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19   on a qualified project is required to be recaptured during the first
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20   ten (10) years after a project is placed in service, the taxpayer
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21   claiming Oklahoma Affordable Housing Tax Credits with respect to
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22   such project shall also be required to recapture a portion of such
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23   credits.   The amount of Oklahoma Affordable Housing Tax Credits
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     Req. No. 9829                                                       Page 4
 1   subject to recapture shall be proportionally equal to the amount of
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 2   federal low-income housing credits subject to recapture.
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 3      J.   The Oklahoma Housing Finance Agency or the Oklahoma Tax
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 4   Commission may require the filing of additional documentation
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 5   necessary to determine the accuracy of a tax credit claimed.
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 6      K.   The Oklahoma Affordable Housing Act shall undergo a review
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 7   every five (5) years by a committee of nine (9) persons, to be
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 8   appointed three persons each by the Governor, President Pro Tempore
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 9   of the Senate, and the Speaker of the House of Representatives.
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10      SECTION 2.   This act shall become effective November 1, 2024.
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12      59-2-9829      MAH     01/17/24
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     Req. No. 9829                                                    Page 5
Statutes affected: 
Introduced: 68-2357.403
Floor (House): 68-2357.403
Floor (Senate): 68-2357.403
Engrossed: 68-2357.403
Enrolled (final version): 68-2357.403