An Act To Encourage the Construction of Affordable Housing
Maine Legislature, Session 128, LD 1461
Committee Amendment CA_A_S470 (Senate)
Amends: 36 MRSA §2536, 36 MRSA §5219-S

COMMITTEE AMENDMENT "A " to S.P. 507, L.D. 1461, Bill, "An Act To 
Encourage the Construction of Affordable Housing" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 36 MRSA §2536 is enacted to read: 
§2536. Credit for low-income housing development 
A taxpayer is allowed a credit against the tax otherwise due under this chapter as 
determined under section 5219-SS. 
Sec. 2. 36 MRSA §5219-SS is enacted to read: 
§5219-SS. Low-income housing development tax credit 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Allocation certificate" means a statement issued by the authority to a qualified 
development under subsection 2, paragraph B certifying that a development qualifies 
for the credit and specifying the amount of the credit allowed. 
B. "Authority" means the Maine State Housing Authority established under Title 
30-A, chapter 201. 
C. "Compliance period" means the period of 15 years beginning with the first taxable 
year of the credit period. 
D. 
"Credit period" means the 6-year period beginning with the date a qualified 
development is placed in service. If a qualified development is composed of more 
than'one building, the qualified development is placed in service on the date the last 
building of the qualified development is placed in service. 
E. "Federal tax credit" means the federal low-income housing tax credit provided by 
Section 42 of the Code. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "f\" to S.P. 507, L.D. 1461 
F. "Qualified allocation plan" means the qualified allocation plan adopted by the 
authority pursuant to Section 42(m) of the Code. 
G. "Qualified basis" means the qualified basis of the development as determined 
pursuant to Section 42 of the Code. 
H. 
"Qualified development" means a qualified low-income housing project, as 
defined in Section 42 of the Code, that is located in the State and determined by the 
authority to be eligible for a federal tax credit. 
I. "Qualified taxpayer" means a person that owns a direct or indirect interest in a 
qualified development and is subject to the taxes imposed under this Part or chapter 
357. 
J. "Rural municipality" means a municipality in the State with a population of fewer 
than 30,000 individuals. 
2. Allocation of credit. The authority may allocate a state tax credit in the form of 
an allocation certificate to a qualified development, which must be done by issuing an 
allocation certificate to the owner of the qualified development. 
A copy of each 
allocation certificate must be provided to the State Tax Assessor. The authority may 
determine the time at which the allocation certificate is issued. Unless otherwise provided 
in this section or the context clearly requires otherwise, the authority shall determine 
eligibility for a state tax credit in accordance with the standards and requirements set 
forth in Section 42 of the Code. The state tax credit must be in an amount determined by 
the authority, subject to the following: 
A. The state tax credit must be necessary for the :financial feasibility of the qualified 
development; 
B. The aggregate amount over the credit period of a state tax credit allocation to a 
qualified development may not exceed the amount of the aggregate federal tax credit 
allocated to that qualified development. Notwithstanding that the federal tax credit is 
claimed over 10 years, the state tax credit is claimed over the 6-year credit period, 
except that, notwithstanding paragraph G, any amount of a credit that exceeds the tax 
due for a tax year may be carried forward as a tax credit against subsequent tax 
liability for up to 11 tax years. The federal tax credit and the state tax credit are 
earned over the compliance period. An annual state tax credit may exceed the annual 
federal tax credit for any year of the credit period; 
C. The state tax credit must be made pursuant to the authority's qualified allocation 
plan; 
D. The state tax credit combined with the federal tax credit must be in the least 
amount necessary to ensure the financial feasibility of a qualified development; 
7 
E. Thirty-five percent of the qualified developments awarded an allocation ce1iificate 
pursuant to this subsection must be located in rural municipalities; 
F. Credit allocations may be made only in calendar years 2019 and 2020. In each 
calendar year, the aggregate amount of state tax credit allocations awarded by the 
authority to qualified developments may not exceed $4,000,000 for each year of the 
COMMITTEE AMENDMENT 
de, 
COMMITTEE AMENDMENT"-!\ "to S.P. 507, L.D. 1461 
credit period, except that in 2020 credits may also be allocated in the amount of 
allowable credits not allocated in 2019; and 
G. The state tax credit must be claimed in equal amounts of 1/6 of the total state tax 
credit for each tax year that starts and ends within the credit period. For any tax year 
that does not fall completely within the credit period, the state tax credit must be 
prorated based on the number of months of the credit period contained in the tax year. 
3. Tax credit. For tax years beginning on or after January 1, 2021, a state tax credit 
is allowed as provided in this section against taxes imposed under this Part or under 
chapter 357. If a credit is available for a qualified development in a tax year prior to tax 
year 2021, the amount available prior to tax year 2021 may be claimed in 2021 and that 
year must be considered the first year of the credit period for that qualified development. 
A credit may be taken against the taxes imposed under this Part or chapter 357 for each 
tax year of the credit period. The credit is not refundable. 
4. Pass-through entities. If the owner of a qualified development receiving a state 
tax credit is a partnership, limited liability company, S corporation or similar pass-
through entity, that owner may allocate the credit among the owner's partners, 
shareholders, members or other owners in any manner agreed to by those partners, 
shareholders, members or other owners. If there are multiple tiers of pass-through 
entities, the credit may be allocated through any number of pass-through entities in any 
manner agreed to by the partners, shareholders, members or other owners of those pass-
through entities. An allocation of a credit through multiple pass-through entities under 
this subsection may not be considered a transfer. The owner of a qualified development 
shall: 
A. Certify to the State Tax Assessor the amount of credit allocated to each partner, 
shareholder, member or other owner and provide a copy of the certification to the 
partner, shareholder, member or other owner; or 
B. Notify the State Tax Assessor that the owner of the qualified development has 
assigned the duty of certification to one of the owner's partners, shareholders, 
members or other owners. That partner, shareholder, member or other owner shall 
provide the certification to the State Tax Assessor and provide. a copy of the 
certification to all other partners, shareholders, members or owners. 
Each partner, shareholder, member or other owner may claim as a state tax credit against 
its tax under this Part or chapter 357 the certified amount allocated under this subsection 
to that partner, shareholder, member or other owner, subject to any restrictions in this 
section. 
5. Limitations. The authority may not allocate a state tax credit pursuant to this 
section unless: 
A. The qualified development is subject to a recorded restrictive covenant requiring 
the development to be maintained and operated as a qualified development during the 
compliance period; and 
B. Beginning with the first tax year of the compliance period or a longer period 
agreed to by the authority and the owner of the qualified development, the owner of 
the qualified development ensures the compliance of the qualified development with 
COMMITTEE AMENDMENT 
1.\ r 
COMMITTEE AMENDMENT"~" to S.P. 507, L.D. 1461 
the accessibility and adaptability requirements of the federal tax credit and Title VIII 
of the federal Civil Rights Act of 1968 as amended by the federal Fair Housing 
Amendments Act of 1988. 
6. 
Recapture of credit. 
State tax credits allocated under this section must be 
recaptured as provided in this subsection. 
A. If a qualified taxpayer entitled to a state tax credit under this section is subject to 
recapture of the federal tax credit or would be subject to recapture of the federal tax 
credit if the taxpayer had been allocated a federal tax credit, the tax liability of the 
qualified taxpayer under this Part or under chapter 357 must be increased by the state 
tax credit recapture amount determined under paragraph B for the tax year of the 
recapture. 
B. The state tax credit recapture amount is an amount equal to the aggregate decrease 
in the state tax credit allowed to the qualified taxpayer under this section for all prior 
tax years calculated in the same manner as under section 42(j) of the Code. 
C. If the recapture of any state tax credit under this subsection is required in any tax 
year, the owner of the qualified development must report to the authority for that tax 
year the proportion of the state tax credit required to be recaptured, the identity of 
each taxpayer subject to the recapture, including in the case of any pass-through 
entity the identity of each partner, member. shareholder or other owner, and the 
amount of the state tax credit previously allocated to each such taxpayer. 
D. If the recapture of any state tax credit under this subsection is required in any tax 
year. the owner of the qualified development shall notify each taxpayer subject to the 
recapture of the proportion of state tax credit required to be recaptured. 
7. Filing requirements. A qualified taxpayer to which a state tax credit has been 
allocated under this section shall file with the qualified taxpayer's income tax return under 
chapter 823 a copy of the allocation certificate issued by the authority for the qualified 
development allowing the state tax credit. A person who has received an allocation of a 
state tax credit as a partner, shareholder, member or other owner of a pass-through entity 
shall file with the person's income tax return under chapter 823 a copy of the allocation 
certificate issued by the authority for the qualified development and a copy of the 
certification provided to the partner, shareholder, member or other owner pursuant to 
subsection 4. A qualified taxpayer subject to recapture under subsection 6 shall file with 
the qualified taxpayer's income tax return under chapter 823 a copy of the notification of 
recapture required pursuant to subsection 6, paragraph D. 
8. Rules. The authority and the State Tax Assessor, in consultation with each other, 
each may adopt rules necessary to carry out the provisions of this subsection. Rules 
adopted pursuant to this subsection are routine technical rules as defined by Title 5. 
chapter 375, subchapter 2-A. 
9. Compliance monitoring. The auth01ity shall provide the State Tax Assessor with 
a copy of any notice of noncompliance the authority provides to the United States Internal 
Revenue Service regarding a qualified development that receives a state tax credit under 
this section. 
COMMITTEE AMENDMENT 
i. \j ~· 
COMMITTEE AMENDMENT" A. "to S.P. 507, L.D. 1461 
10. Report to the Legislature. By December 31st of each year in which an 
allocation has been made under this section. the authority shall provide a written report to 
the Legislature for that year. A report under this subsection must be made available to the 
public. A report under this subsection must: 
A. Specify the number of qualified developments that have been allocated a state tax 
credit during that year and the total number of units supported by each development; 
B. 
Describe for each qualified development under paragraph A the geographic 
location of the development, the household type and any specific demographic 
information available about residents intended to be served by the development. the 
income levels intended to be served by the development and the rents authorized for 
the development; and 
C. Provide housing market and demographic information that demonstrates how the 
qualified developments under paragraph A are addressing the need for affordable 
housing within the communities the developments are intended to serve and 
information about any remaining disparities in the affordability of housing within 
those communities. 
Sec. 3. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services, Bureau of 0002 
Initiative: Provides funding for one Staff Attorney position, one Management Analyst II 
position and related costs to review and process a low-income housing development tax 
credit. 
GENERAL FUND 
POSITIONS - LEGISLATIVE COUNT 
Personal Services 
All Other 
GENERAL FUND TOTAL 
SUMMARY 
2017-18 
2018-19 
0.000 
2.000 
$0 
$113,676 
$0 
$10,858 
$0 
$124,534 
This amendment is the majority report and replaces the bill. The amendment moves 
the allocation of the bill's low-income housing development tax credit to the chapter of 
the Maine Revised Statutes, Title 36 that contains income tax credits. The amendment 
makes changes to the bill's provisions in order to clarify and improve the administration 
of the credit. This amendment adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/12/18 feac:.. 
LD 1461 
LR 1619(02) 
An Act To Encourage the Construction of Affordable Housing 
Fiscal Note for Bill as Amended by Committee Amendment "A ( s- L/ 7 o) 
Committee: Taxation 
Net Cost (Savings) 
General Fund 
Appropriations/ Allocations 
General Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2017-18 
$0 
$0 
$0 
$0 
FY 2018-19 
$124,534 
$124,534 
$0 
$0 
Projections 
FY 2019-20 
$196,585 
$196,585 
$0 
$0 
Projections 
FY 2020-21 
$582,200 
$202,200 
($380,000) 
($20,000) 
This bill creates a low income housing development tax credit and would reduce General Fund revenue by $380,000 
and Local Government Fund revenue by $20,000 in fiscal year 2020-21. When fully phased in the reduction in 
revenue is estimated at $24 million annually. The bill includes a General Fund appropriation of $124,534 in fiscal 
year 2018-19 to the Depaiiment of Administrative and Financial Services for one Staff Attorney position, one 
Management Analyst II position and related costs to review and process the low income housing development tax 
credit. 
Additional costs to the Maine State Housing Authority to implement the requirements of this legislation can be 
absorbed within existing budgeted resources. 
LR 1619(02) - Fiscal Note - Page I of I