S.B. No. 2814 introduces a new tax credit aimed at promoting low-income housing developments in Texas by amending Chapter 171 of the Tax Code to include Subchapter K. This new subchapter defines key terms such as "allocation certificate," which certifies the annual credit amount for each building in a qualified development, and "credit," referring to the low-income housing development tax credit. The bill allows taxable entities that own an interest in a qualified development to claim an annual credit against their taxes, detailing the application process for obtaining an allocation certificate from the Texas Department of Housing and Community Affairs. The total amount of credits allocated each year is capped at $25 million, with provisions for compliance monitoring and recapture of credits if necessary.

Furthermore, the bill establishes a credit against state premium tax liabilities for entities with a direct or indirect interest in qualified housing developments. It outlines eligibility criteria for claiming the credit, specifies that entities must apply for the credit on their tax report, and includes necessary documentation requirements. The Texas Department of Housing and Community Affairs will manage the reservation of credit amounts and issuance of allocation certificates starting January 1, 2024. The legislation also sets limitations on the total credit claimed, allows for the carryforward or backward of surplus credits, and mandates the adoption of implementation rules by the comptroller and the Department. The new regulations will apply to tax reports due between January 1, 2026, and January 1, 2036, with the act taking effect on January 1, 2026.

Statutes affected:
Introduced: ()