Senate Bill No. 2814 introduces a new tax credit program in Texas aimed at promoting low-income housing developments. The bill amends Chapter 171 of the Tax Code by adding Subchapter K, which defines key terms such as "allocation certificate" and "qualified development," and establishes the criteria for housing projects to be eligible for the tax credit. Taxable entities that own an interest in a qualified development can claim an annual credit against their franchise or insurance premium taxes. The bill also outlines the application process for obtaining an allocation certificate, the method for determining credit amounts, and compliance monitoring requirements.

Additionally, the bill specifies that the Texas Department of Housing and Community Affairs will begin reserving credit amounts and issuing allocation certificates starting January 1, 2024. The provisions of the bill will apply to tax reports due between January 1, 2026, and January 1, 2036, with the authority to allocate credits expiring after December 31, 2029. The legislation aims to enhance affordable housing availability in Texas by providing financial incentives for developers, while also ensuring that entities claiming the credit are not subject to retaliatory taxes under Chapter 281. The act is set to take effect on January 1, 2026.

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