An Act To Encourage the Preservation of Affordable Housing
Maine Legislature, Session 122, LD 1165
Committee Amendment CA_A_H634 (House)
Amends: 30-A MRSA §4722, 36 MRSA §5122, 36 MRSA §5200-A

COMMITTEE AMENDMENT "Il" to H.P. 808, L.D. 1165, Bill, 
To Encourage the presefJation of Affordable Housing" 
"An 
Amend the bill by striking out everything after the enacting 
clause and before the summary and inserting in its place the 
following: 
'Sec. 1. 30-A MRSA §4722~ sub-§ 1, 1fX" 
as amended by PL 2003, 
c. 704, §5, is further amended t.o read: 
x. 
Advise 
the 
Governor 
and 
other officials 
of 
State 
Government on matters relating to energy conservation; aae 
Sec. 2. 30-A MRSA §4722, sub-§I,,v, as enacted by PL 2003, c. 
704, §6, is amended to read: 
Y. 
Expand access to housing for young professionals and 
young families. 
The Maine State Housing Authority shall 
develop recommendations to create or modify programs with 
the 
goal 
of 
expanding 
access 
to 
housing 
for 
young 
professionals and young families. 
The Maine State Housing 
Authority shall specifically consider strategies to assist 
renters and first-time home buyers who are under 35 years of 
age and explore options for linking assistance levels to 
student loan obligations. 
The Maine State Housing Authority 
shall collaborate with the Maine Community College System, 
vocational high schools and community action programs to 
encourage the development of affordable housing in high-cost 
housing areas of the State. 
Page l-LR1927(2) 
COMMITTEE AMENDMENT 
,,*ftt. 
COMMITTEE AMENDMENT ,A" to H.P. 808, L.D. 1165 
(1) 
The Maine State Housing Authority shall report its 
findings and recommendations regarding expanded access 
to housing for young professionals and young families 
to the Future for Youth in Maine State Work Action 
Tactics Team established in Title 5, section 13161 and 
to the joint standing committee of the Legislature 
having jurisdiction over housing matters no later than 
January 15, 2005 and annually thereafterT: and 
Sec.3. 30-A MRSA §4722, sub-§l, 1JZ is enacted to read: 
Z. 
Certify transfers of multifamily affordable housing 
property that qualify for the deduction under Title 36, 
section S122, subsection 2, paragraph U or Title 36, section 
5200-A, 
subsection 
2« 
paragraph 
P. 
The 
affordability 
restrictions 
that 
apply 
under 
this 
paragraph 
must 
be 
contained in a declaration signed by the transferee and 
recorded in the appropriate registry of deeds at the time of 
the sale or transfer. 
(1) 
For the purposes of this paragraph, "multifamily 
affordable housing property" means a decent. safe and 
sanitary dwelling, apartment building or other living 
accommodation that includes at least 6 
units, 
that 
meets 
at least one 
of 
the 
following 
affordability 
restrictions 
and 
for 
which 
those 
affordability 
restrictions, as app'licable, expire in 10 years or less 
from the date of the sale or transfer of the property: 
(a) 
At least 
20°-& of the units have restricted 
rents affordable to households earning no 
more 
than 80% of the area median income as determined 
by the United States Department of Housing and 
Urban Development: 
(b) 
The property is assisted by the United States 
Department of Housing and Urban Development, the 
United States Department of Agriculture or the 
Maine State Housing Authority: or 
(cl 
The property qualifies for low-income housing 
credits under Section 42 of the Code. 
(2) 
For the purposes of this paragraph, property does 
not qualify as multifamily affordable housing property 
unless: 
( a) 
The 
transferee 
agrees 
to 
maintain 
the 
property 
as 
:nultifamily 
affordable 
housing 
COMMITTEE AMENDMENT 
, 
, ," " 
COMMITTEE AMENDMENT 'A" to H.P. 808, L.D. 1165 
property for 
an additional 
years 
from 
the 
scheduled expiration: 
(b) 
If the existing federal, 
state or other 
assistance 
is 
not 
available 
to 
maintain 
the 
property 
as 
multifamily 
affordable 
housing 
property, the transferee agrees to ensure that 1/2 
of the units are affordable to persons at 60% of 
the area median income as determined by the United 
States Department of Housing and Urban Development 
for 
years 
from 
the 
expiration 
of 
the 
then-existing affordability restrictions: or 
(c) 
The 
transferee 
agrees 
to 
an 
al ternati ve 
affordability 
agreement 
approved 
by 
the 
Maine 
State Housing Authority. 
Sec. 4. 36 MRSA §5122, sub-§2, 1JQ, as corrected by RR 2003, c. 
1, §38, is amended to read: 
Q. 
A fraction of any amount previously added back by the 
taxpayer 
to 
federal 
adjusted 
gross 
income 
pursuant 
to 
subsection 1, paragraph N. 
(1) 
With respect to property first placed in service 
during taxable years beginning in 2002, the adjustment 
under this paragraph is available for each year during 
the 
recovery 
period, 
beginning 
years 
after 
the 
beginning of the tal~able year during which the property 
was first placed in service. 
The fraction is equal to 
the amount added back under subsection 1, paragraph N 
with respect to the property, divided by the number of 
years in the recovery period minus 2. 
(2) 
With respect to all other property, 
for 
the 
taxable year immediately following the taxable year 
during which the property was first placed in service, 
the fraction allowed by this paragraph is equal to 
5'?-0 
of the amount added back under subsection 1, paragraph 
N with respect to the property. 
For each subsequent 
taxable year during the recovery period, the fraction 
is 
equal 
to 
95% 
of 
the 
amount 
added 
back 
under 
subsection 1, paragraph N with respect to the property, 
divided by the number of years in the recovery period 
minus 2. 
In the case of property expensed pursuant to Section 179 of 
the Code, 
the term "recovery period" means 
the recovery 
period that would have been applicable to the property had 
Section 179 not been applied; 
a~a 
COMMITTEE AMENDMENT 
". 
~ 
COMMITTEE AMENDMENT ·A .. to H.P. 808, L.n. 1165 
Sec. 5. 36 MRSA §5122, sub-§2, fI', as amended by PL 2003, c. 
705, §12 and affected by §14, is further amended to read: 
T. 
For income tax years beginning on or after January 1, 
2002 and before January 1, 2004, 
an amount equal to the 
total premiums spent for long-term care insurance policies 
certified under Title 24-A, section 5075-A as long as the 
amount subtracted is reduced by the long-term care premiums 
claimed as an itemized deduction pursuant to section 5125. 
For income tax years beginning on or after January 1, 2004, 
an amount equal to the total premiums spent for qualified 
long-term care insurance contracts certified under Title 
24-A, section 5075-A, as long as the amount subtracted is 
reduced by any amount claimed as a deduction for federal 
income tax purposes in accordance with the Code, Section 
(1) 
and by the long-term care premiums claimed as an 
itemized deduction pursuant to section 5125T; and 
Sec. 6. 36 MRSA §5122, sub-§2, 1fU is enacted to read: 
U. 
For income tax years beginning on or after January 1, 
2006, 
to the extent included in federal adjusted gross 
income and not otherwise removed from Maine taxable income, 
an amount egual to the total of capital gains and ordinary 
income resulting from deoreciation recapture determined in 
accordance with the Code, Sections 1245 and 1250 that is 
realized upon the sale of property certified as multifamily 
affordable housing property 
by 
the 
Maine 
State 
Housing 
Authority in accordance with Title 
30-A, 
section 
4722, 
subsection 1, paragraph Z. 
Sec. 7. 36 MRSA §5200-A, sub-§2, 1rL, as amended by PL 2003, c. 
20, Pt. EE, §3, is further amended to read: 
L. 
An 
amount equal to the absolute value of 
any net 
operating loss 
ar~s~ng from a tax year beginning or ending 
in 2001 for which federal taxable income was increased under 
subsection 1, paragraph M and that, pursuant to Section 102 
of the federal Job Creation and Worker Assistance Act of 
2002, Public Law 107-147, was carried back more than 2 years 
to the taxable year for federal income tax purposes, but 
only to the extent that: 
(1) Maine taxable income is not reduced below zero; 
(2) The taxable year is either within 2 years prior to 
the 
year 
in 
which 
the 
loss 
arose 
or 
within 
the 
COMMITTEE AMENDMENT 
"Cl~ 
~ 
• 
COMMITTEE AMENDMENT )\ " to H.P. 808, L.D. 1165 
allowable 
federal 
period 
operating losses; and 
for 
carry-over 
of 
net 
(3) 
The 
amount 
has 
not been previously used as 
a 
modification pursuant to this subsection; aBe 
Sec. 8. 36 MRSA §5200-A, suh-§2, 11M, as repealed and replaced 
by PL 2003, c. 479, §6, is ame~ded to read: 
M. 
A fraction of any amount previously added back by the 
taxpayer to federal taxable income pursuant to subsection 1, 
paragraph N. 
(1) 
With respect to property first placed in service 
during taxable years beginning in 2002, the adjustment 
under this paragraph is available for each year during 
the 
recovery 
period, 
beginning 
years 
after 
the 
beginning of the taxable year during which the property 
was first placed in service. 
The fraction is equal to 
the amount added back under subsection 1, paragraph N 
with respect to the property, divided by the number of 
years in the recovery period minus 2. 
(2) 
With 
respect to all other 
property, 
for 
the 
taxable year 
immediately following the taxable year 
during which the property was first placed in service, 
the fraction allowed by this paragraph is equal to 5°-0 
of the amount added back under subsection 1, paragraph 
N with respect to the property. 
For each subsequent 
taxable year during t.he recovery period, the fraction 
is 
equal 
to 
95% 
of 
the 
amount 
added 
back 
under 
subsection 1, paragraph N with respect to the property, 
divided by the number of years in the recovery period 
minus 2. 
In the case of property expensed pursuant to Section 179 of 
the Code, 
the term "recovery period" means the recovery 
period that would have been applicable to the property had 
Section 179 not been appliedT; and 
Sec. 9. 36 MRSA §5200-A, sub-§2, V is enacted to read: 
P. 
For income tax years beginning on or after January 1, 
2006, to the extent included in federal taxable income and 
not otherwise removed from Maine taxable income, an amount 
equal to the total of capital gains and ordinary income 
resulting 
from 
depreciation 
recapture 
determined 
in 
accordance with the Code, Sections 1245 and 1250 that is 
realized upon the sale of property certified as multifamily 
affordable 
housing property 
by 
the 
Maine 
State 
Housing 
COMMITTEE AMENDMENT 
~.'. 
COMMITTEE AMENDMENT "A" to H.P. 808, L.D. 1165 
Authority in accordance 
with Title 
30-A, 
section 4722, 
subsection 1, paragraph Z. 
Sec. 
10. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
The 
ADMINISTRATIVE AHD FIHAHCIAL SERVICES, DEPAR1HENT OF 
Maine Revenue Services 
0002 
following 
Initiative: 
Provides funds for the computer programming costs 
associated with the income tax exemption for capital gains and 
depreciation 
recapture 
related 
to 
the 
transfer 
of 
certain 
affordable housing property. 
GENERAL FUHD 
All Other 
GENERAL FUND TOTAL 
SUMMARY 
2005-06 
$20,000 
$20,000 
2006-07 
$0 
$0' 
This amendment restructures the provisions of the bill to 
improve administration of the exemption 
from 
the 
income 
tax 
capital gains and depreciation recapture associated with the sale 
of multifamily affordable housing property. 
The amendment also 
deletes the real estate transfer tax exemption for affordable 
housing from the bill. 
The amendment also adds an appropriations 
and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
• 
Approved: 06/02/05 ~ae 
Net Cost (Savings) 
General Fund 
LD 1165 
LR 1927(02) 
An Act To Encourage the Preservation of Affordable Housing 
Fiscal Note for Bill as Amended by Committee Amendment ,A" 
Committee: Taxation 
Fiscal Note Required: Yes 
Fiscal Note 
2005-06 
$58,114 
2006-07 
$128,953 
Projections 
2007-08 
$135,258 
Appropriations/Allocations 
General Fund 
$20,000 
$0 
$0 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
($38,114) 
($2,048) 
($128,953) 
($6,930) 
($135,258) 
($7,419) 
Projections 
2008-09 
$142,021 
$0 
($142,021) 
($7,790) 
This bill is expected to decrease General Fund revenue by $38,114 in fiscal year 2005-06 and $128,953 in fiscal year 
2006-07. This bill also includes a General Fund appropriation of $20,000 for the computer programming costs 
associated with the income tax exemption. 
LR1927(2) - Fiscal Note - Page 1 of 1