The Alabama Workforce Housing Tax Credit Act, as outlined in HB346, establishes a tax credit to incentivize the development of qualified workforce housing projects. The act defines the terms and conditions under which the tax credits can be claimed, including a 10-year claim period against the tax liability of qualified taxpayers and provisions for carrying forward unused tax credits. The Alabama Housing Finance Authority is designated to implement and administer the act, with a requirement that a portion of the annual award cap be allocated to projects in rural areas. The tax credit is non-refundable but can be carried forward for five years and may offset the state portion of the financial institution excise tax. The act applies to projects placed in service on or after January 1, 2025.

The bill also details the process for awarding tax credits, including the issuance of reservation and determination letters, and sets a cap on the total amount of tax credits awarded each cycle. At least 20% but not more than 25% of the cap must be allocated to rural projects, if viable requests are received. The bill includes provisions for recapturing workforce housing tax credits if federal low-income housing credits are recaptured or disallowed, increasing the taxpayer's income tax liability. Insurance companies claiming the credit are exempt from additional tax payments due to the credit, which can offset any retaliatory tax imposed. The authority is tasked with adopting guidelines and preferences for projects, such as those providing after-school care. The tax credit will not be available for applications after September 30, 2027, but this does not affect prior applications. The act is effective from October 1, 2024, and the Senate passed the bill with an insertion on May 7, 2024.

Statutes affected:
Introduced: 27-3-29, 27-4A-3, 40-16-4, 40-18-2, 27-3-29
Engrossed: 27-3-29, 27-4A-3, 40-16-4, 40-18-2, 27-3-29
Enrolled: 27-3-29, 27-4A-3, 40-16-4, 40-18-2, 27-3-29