Bill Summary – FastDemocracy

67th Legislature                                                                                                       HB 397.1
                                                     HOUSE BILL NO. 397
                                               INTRODUCED BY J. KASSMIER
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   A BILL FOR AN ACT ENTITLED: “AN ACT PROVIDING FOR WORKFORCE HOUSING TAX CREDITS;
   PROVIDING THAT THE CREDITS MAY BE TAKEN AGAINST THE INCOME TAX OR INSURANCE
   PREMIUM TAXES; AMENDING SECTION 15-30-2303, MCA; AND PROVIDING AN APPLICABILITY DATE
   AND A TERMINATION DATE.”
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   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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              NEW SECTION. Section 1.         Workforce housing tax credit. (1) Commencing with tax years
   beginning on or after January 1, 2022, a taxpayer owning an interest in a qualified project issued an eligibility
   statement by the board of housing may claim a credit against taxes imposed by Title 15, chapter 31, 33-2-705,
   33-2-709, 50-3-109, and this chapter.
              (2)   The board of housing shall issue eligibility statements for qualified projects on approval of a final
   cost certification. If the credit is claimed by a small business corporation as defined in 15-30-3301, a pass-
   through entity, or a partnership, the credit may be allocated to some or all shareholders, owners, members, or
   partners, regardless of whether the shareholder, owner, member, or partner is a partner for federal income tax
   purposes. The eligibility statement must specify the total amount of the credit for which the qualified project is
   eligible for each year of the credit period.
              (3)   The credit is approved for a period of 6 tax years beginning with the tax year in which a qualified
   project is placed in service.
              (4)   The total amount of credits allocated by the board of housing to qualified projects for any
   allocation year may not exceed 50% of the amount of federal low-income housing tax credits that may be
   allocated by the board of housing for that year, plus the total amount of all unallocated credits from previous
   calendar years and the total amount of all previously allocated credits that have been revoked or otherwise
   recovered by the board of housing.
              (5)   If the amount of the credit exceeds the taxpayer's liability for the year, the credit may be carried
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   forward 5 years. The entire amount of the credit not used in the year must be carried first to the earliest tax year
   in which the credit may be applied and then to each succeeding tax year.
              (6)   A taxpayer claiming the credit must own a direct or indirect interest, through one or more pass-
   through entities, in the qualified project at any time prior to filing a tax return claiming the credit and shall submit
   a copy of the eligibility statement with the tax return claiming the credit. If the board of housing has not issued
   the eligibility statement at the time the taxpayer files the return, the taxpayer shall file an amended return to
   include the eligibility statement.
              (7)   If all or a portion of the federal low-income housing credit is recaptured or is otherwise disallowed
   during the credit period, the same portion of the Montana credit is also recaptured or disallowed. Any credits
   recaptured or disallowed increase the tax liability of the taxpayer who claimed the credit in the same amount
   and must be included on the tax return of the taxpayer for the year in which the credit is recaptured or
   disallowed.
              (8)   The board of housing may not allocate to a project a combined amount of federal low-income
   housing credits and Montana credits that is more than is necessary to make the project financially feasible.
              (9)   Notwithstanding any other provision of this section, a developer of a qualified project, including the
   owner of a developer, may not claim a credit or receive any remuneration related to a credit except for the
   developer's fee and other distributions allowed by the board of housing.
              (10) As used in this section, the following definitions apply:
              (a)   "Allocation year" means the year for which the board of housing reserves tax credits pursuant to
   this section.
              (b)   "Developer" means an individual or entity responsible for initiating and controlling the development
   process with respect to a qualified project and for ensuring that all or any material portions of all phases of the
   development process are accomplished.
              (c)   "Qualified project" means a qualified low-income building, as that term is defined in section 42 of
   the Internal Revenue Code, 26 U.S.C. 42, located in the state and placed into service on or after January 1,
   2022.
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              NEW SECTION. Section 2.         Workforce housing tax credit. Commencing with tax years beginning
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   on or after January 1, 2022, a taxpayer owning an interest in a qualified project, as defined in [section 1], that is
   issued an eligibility statement by the board of housing may claim a credit against the taxes imposed under this
   chapter. The credit must be administered in accordance with the provisions of [section 1].
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              NEW SECTION. Section 3.         Workforce housing tax credit. (1) Commencing with tax years
   beginning on or after January 1, 2022, a taxpayer owning an interest in a qualified project, as defined in [section
   1], that is issued an eligibility statement by the board of housing may claim a credit against taxes due under 33-
   2-705 or 33-2-709. The credit must be administered in accordance with the provisions of [section 1].
              (2)   An insurance company claiming a workforce housing tax credit against the taxes imposed by 33-2-
   705 or 33-2-709 may not be required to pay any additional retaliatory tax as a result of claiming the credit. The
   credit may fully offset any retaliatory tax imposed by the state.
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              NEW SECTION. Section 4.         Workforce housing tax credit. Commencing with tax years beginning
   on or after January 1, 2022, a taxpayer owning an interest in a qualified project, as defined in [section 1], that is
   issued an eligibility statement by the board of housing may claim a credit against taxes due under 50-3-109.
   The credit must be administered in accordance with the provisions of [section 1].
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              Section 5. Section 15-30-2303, MCA, is amended to read:
              "15-30-2303.    Tax credits subject to review by interim committee. (1) The following tax credits
   must be reviewed during the biennium commencing July 1, 2019:
              (a)   the credit for income taxes imposed by foreign states or countries provided for in 15-30-2302;
              (b)   the credit for contractor's gross receipts provided for in 15-50-207;
              (c)   the credit for new or expanded manufacturing provided for in 15-31-124 through 15-31-127;
              (d)   the credit for installing an alternative energy system provided for in 15-32-201 through 15-32-203;
              (e)   the credit for energy-conserving expenditures provided for in 15-30-2319 and 15-32-109; and
              (f)   the credit for elderly homeowners and renters provided for in 15-30-2337 through 15-30-2341.
              (2)   The following tax credits must be reviewed during the biennium commencing July 1, 2021:
              (a)   the credit for commercial or net metering system investment provided for in Title 15, chapter 32,
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   part 4;
              (b)   the credit for qualified elderly care expenses provided for in 15-30-2366;
              (c)   the credit for dependent care assistance and referral services provided for in 15-30-2373 and 15-
   31-131;
              (d)   the credit for contributions to a university or college foundation or endowment provided for in 15-
   30-2326, 15-31-135, and 15-31-136;
              (e)   the credit for donations to an educational improvement account provided for in 15-30-2334, 15-30-
   3110, and 15-31-158; and
              (f)   the credit for donations to a student scholarship organization provided for in 15-30-2335, 15-30-
   3111, and 15-31-159.
              (3)   The following tax credits must be reviewed during the biennium commencing July 1, 2023:
              (a)   the credit for providing disability insurance for employees provided for in 15-30-2367 and 15-31-
   132;
              (b)   the credit for installation of a geothermal system provided for in 15-32-115;
              (c)   the credit for property to recycle or manufacture using recycled material provided for in Title 15,
   chapter 32, part 6;
              (d)   the credit for converting a motor vehicle to alternative fuel provided for in 15-30-2320 and 15-31-
   137;
              (e)   the credit for infrastructure use fees provided for in 17-6-316; and
              (f)   the credit for contributions to a qualified endowment provided for in 15-30-2327 through 15-30-
   2329, 15-31-161, and 15-31-162.
              (4)   The following tax credits must be reviewed during the biennium commencing July 1, 2025:
              (a)   the credit for preservation of historic buildings provided for in 15-30-2342 and 15-31-151;
              (b)   the credit for mineral or coal exploration provided for in Title 15, chapter 32, part 5;
              (c)   the credit for capital gains provided for in 15-30-2301;
              (d)   the credit for a new employee in an empowerment zone provided for in 15-30-2356 and 15-31-
   134;
              (e)   the credit for an oilseed crush facility provided for in 15-32-701; and
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              (f)   the credit for unlocking state lands provided for in 15-30-2380.
              (5)   The following tax credits must be reviewed during the biennium commencing July 1, 2027:
              (a)   the biodiesel or biolubricant production facility credit provided for in 15-32-702;
              (b)   the biodiesel blending and storage credit provided for in 15-32-703;
              (c)   the adoption tax credit provided for in 15-30-2364;
              (d)   the credit for providing temporary emergency lodging provided for in 15-30-2381 and 15-31-171;
              (e)   the credit for hiring a registered apprentice or veteran apprentice provided for in 15-30-2357 and
   15-31-173;
              (f)   the earned income tax credit provided for in 15-30-2318; and
              (g)   the media production and postproduction credits provided for in 15-31-1007 and 15-31-1009; and
              (h)   the workforce housing tax credits provided for in [sections 1 through 4].
              (6)   The revenue interim committee shall review the tax credits scheduled for review in the biennium of
   the next regular legislative session, including any individual or corporate income tax credits with an expiration or
   termination date that are not listed in this section, and make recommendations to the legislature about whether
   to eliminate or revise the credits. The legislature may extend the review dates by amending this section. The
   revenue interim committee shall review the credits using the following criteria:
              (a)   whether the credit changes taxpayer decisions, including whether the credit rewards decisions that
   may have been made regardless of the existence of the tax credit;
              (b)   to what extent the credit benefits some taxpayers at the expense of other taxpayers;
              (c)   whether the credit has out-of-state beneficiaries;
              (d)   the timing of costs and benefits of the credit and how long the credit is effective;
              (e)   any adverse impacts of the credit or its elimination and whether the benefits of continuance or
   elimination outweigh adverse impacts; and
              (f)   the extent to which benefits of the credit affect the larger economy."
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              NEW SECTION. Section 6.         Codification instruction. (1) [Section 1] is intended to be codified as an
   integral part of Title 15, chapter 30, and the provisions of Title 15, chapter 30, apply to [section 1].
              (2)   [Section 2] is intended to be codified as an integral part of Title 15, chapter 31, and the provisions
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   of Title 15, chapter 31, apply to [section 2].
              (3)   [Section 3] is intended to be codified as an integral part of Title 33, chapter 2, part 7, and the
   provisions of Title 33, chapter 2, part 7, apply to [section 3].
              (4)   [Section 4] is intended to be codified as an integral part of Title 50, chapter 3, part 1, and the
   provisions of Title 50, chapter 3, part 1, apply to [section 4].
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              NEW SECTION. Section 7.         Applicability. [This act] applies to tax years beginning after December
   31, 2021.
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              NEW SECTION. Section 8.         Termination. [This act] terminates December 31, 2026.
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Statutes affected: 
HB0397_1.pdf: 15-30-2303
HB0397_2.pdf: 15-30-2303
HB0397_X.pdf: 15-30-2303
Amended: 15-30-2303
Introduced: 15-30-2303