2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:12. State low-income housing credit

RS 47:12 - State low-income housing credit
A. There shall be allowed as a credit against the amount of individual income tax, corporate income tax, or corporate franchise tax owed by a taxpayer a state low-income housing credit in an amount equal to the amount determined pursuant to Subsection C of this Section, which shall be computed in accordance with the provisions of Section 42 of the 1986 Code, except as the calculations and definitions in that Section are modified in this Section.
B.(1) The amount of the credit allocated to any project shall be authorized by the credit agency based on a project's need for the credit for economic feasibility.
(a) The low-income housing project shall meet all of the following requirements:
(i) It shall be located in a state enterprise zone.
(ii) It shall involve the material participation (within the meaning of Section 469(h) of the 1986 Code) of a qualified non-profit organization in the development and operation of the project throughout the compliance period and extended use period.
(iii) It shall involve the education and training of the residents of the low-income units for job opportunities identified by local workforce development boards.
(iv) It shall involve tenants in the management and operation of the project through a limited equity housing cooperative which is contractually entitled to acquire the project at the end of the compliance period at the minimum purchase price as defined in Section 42 of the 1986 Code.
(v) It shall meet either of the following requirements:
(aa) It shall have been allocated by the credit agency a credit for federal income tax purposes under Section 42 of the 1986 Code.
(bb) It shall qualify for a credit under Section 42(h)(4)(B) of the 1986 Code.
(b) The credit agency may impose fees for the credit under this Section not in excess of twenty-five percent of the fees required for applications for the tax credit pursuant to Section 42 of the 1986 Code.
(2)(a) The credit agency shall certify to the taxpayer the amount of tax credit under this Section to which the taxpayer is entitled for each year in the credit period.
(b) The taxpayer shall provide proof of the certification to any return upon which a tax credit is claimed under this Section.
(c) In the case of a failure to provide proof of the certification for the year to the return in which a tax credit is claimed under this Section, no credit under the Section shall be allowed for that year until a copy of the certification is provided.
C. Section 42(b) of the 1986 Code shall be deemed modified as follows:
(1) In the case of any qualified low-income building placed in service by the taxpayer during 1990, the term "applicable percentage" means nine percent for each of the first three years and three percent for the fourth year for new buildings (whether or not the building is federally subsidized) and for existing buildings.
(2) In the case of any qualified low-income building placed in service by the taxpayer after 1990 (for new buildings whether or not the building is federally subsidized and for existing buildings), the term "applicable percentage" means either of the following:
(a) For each of the first three years, the highest percentage prescribed under Section 42(b)(2) of the 1986 Code, for the month in which the building is placed in service, in lieu of the percentage prescribed in Section 42(b)(1)(A) of the 1986 Code.
(b) For the fourth year, the difference between thirty percent and the sum of the applicable percentages for the first three years.
D. The term "qualified low-income housing project" as defined in Section 42(c)(2) of the 1986 Code shall be deemed modified by adding the following requirements:
(1) The taxpayer shall be entitled to receive a cumulative cash distribution on the taxpayer's cash invested in the qualified low-income housing project in an amount not to exceed eight percent per annum. For purposes of this Paragraph, if the taxpayer is a partnership or an S corporation, the limitation on return shall apply to each of the partners or the shareholders, respectively.
(2) The taxpayer shall apply any cash available for distribution in excess of the amount eligible to be distributed under Paragraph (1) to reduce any mortgage loan on the project or to fund operating and maintenance reserves as approved by the credit agency.
E. The provisions of Section 42(f) of the 1986 Code shall be deemed modified as follows:
(1) The term "credit period" as defined in Section 42(f)(1) of the 1986 Code is modified by substituting "four taxable years" for "10 taxable years".
(2) The special rule for the first taxable year of credit period under Section 42(f)(2) of the 1986 Code shall not apply to the tax credit under this Section.
F. The provisions of Section 42(h) of the 1986 Code shall be deemed modified as follows:
Section 42(h)(2) of the 1986 Code shall not be applicable and instead the following provisions shall be applicable:
(1) The total amount for the four-year period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the credit agency for the calendar year in which the allocation is made.
(2) The total amount for the four-year credit period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the credit agency for the calendar year in which the allocation is made.
G.(1) Except as provided in Paragraph (2), the aggregate housing credit dollar amount which may be allocated annually by the credit agency for the 1990, 1991, and 1992 calendar years pursuant to this Section shall be an amount equal to twenty-five cents multiplied by the state population in that year.
(2) The portion of the aggregate housing credit dollar amount of the credit agency which is not allocated for each of the calendar years may be carried over to any subsequent calendar years through 1993.
H.(1) The term "compliance period" as defined in Section 42(i)(1) of the 1986 Code is modified to mean, with respect to any building, the period of thirty consecutive taxable years beginning with the first taxable year of the credit period with respect thereto, subject to the limitation in Paragraph (2).
(2) If, after the first fifteen years of the compliance period, title to the qualified low-income housing project is not transferred to the limited equity housing cooperative, the taxpayer shall continue to maintain the units as low-income units subject to the set-aside and rent requirements for an additional thirty years.
I. Section 42(j) of the 1986 Code shall not be applicable and the following shall be substituted in its place:
(1) The requirements of this Section shall be set forth in a regulatory agreement between the credit agency and the taxpayer.
(2) The regulatory agreement shall include, but not be limited to, the following:
(a) A term equal to the compliance period.
(b) A requirement that the agreement be filed in the official records of the parish in which the qualified low-income housing project is located.
(c) A provision stating which state and local agencies can enforce the regulatory agreement in the event the taxpayer fails to satisfy any of the requirements of this Section.
(d) A provision that the regulatory agreement shall be deemed a contract enforceable by tenants and third-party beneficiaries thereto.
(e) A provision incorporating the requirements of Section 42 of the 1986 Code as modified by this Section.
(f) A requirement that the taxpayer provide the credit agency, or its designee, and the local agency that can enforce the regulatory agreement with advance notice if the taxpayer intends to reduce the number of low-income units.
(g) A requirement that the taxpayer notify the credit agency, or its designee, and the local agency that can enforce the regulatory agreement if there is a determination by the Internal Revenue Service that the project is not in compliance with Section 42(g) of the 1986 Code.
(h) A requirement that the taxpayer, as security for the performance of taxpayer's obligations under the regulatory agreement, assign the taxpayer's interest in rents which it receives from the project, provided that until there is a default under the regulatory agreement the taxpayer is entitled to collect and retain the rents.
(3) The remedies available in the event of a default under the regulatory agreement that is not cured within a reasonable cure period, include, but are not limited to:
(a) Allowing any of the parties designated to enforce the regulatory agreement to collect all rents with respect to the project;
(b) Taking possession of the project and operating the project in accordance with the regulatory agreement until the enforcer determines the taxpayer is in a position to operate the project in accordance with the regulatory agreement;
(c) Applying to any court for specific performance;
(d) Securing the appointment of a receiver to operate the project; or
(e) Any other relief as may be appropriate.
J. In allocating the housing credit, the credit agency shall give priority to qualified low-income housing projects that satisfy the following criteria, which are weighted according to the numerical order of the Paragraphs listed below:
(1) Projects that have received government financing or mortgage assistance.
(2) Projects that commit to providing low-income units for a significantly longer period than the compliance period under this Section.
(3) Projects that commit to charging rent for low-income units that is less than the rent requirements under Section 42(g)(2) of the 1986 Code.
(4)(a) Projects for which the rate of return on cash investment is less than the rate allowed under this Section.
(b) Projects targeted to those groups identified in the state's qualified allocation plan as having special needs, including projects that ensure that rural areas receive a proportionate share of the housing credits.
K. Section 42(l) of the 1986 Code shall be modified as follows: the term "secretary" shall be replaced by the term "credit agency".
L. In the case where the credit allowed under this Section exceeds the net tax for the taxable year, that portion of the credit which exceeds the net tax may be carried over to the net tax in succeeding taxable years with respect to which this Section shall remain in effect for purposes of carrying over excess credit, until this credit is used. The credit shall be applied first to the earliest years possible.
M. The aggregate amount of tax credits granted pursuant to this Section shall not exceed one million dollars per year. The credit agency shall not authorize any credit if the total amount of credit authorized in any year exceeds one million dollars.
N. This Section shall remain in effect only until January 1, 1994, and as of that date is repealed, unless a later enacted statute, which is enacted before January 1, 1994, deletes or extends the date. However, any unused credit may be used beyond that date on the same basis and to the same extent as permitted under the law immediately prior to January 1, 1994.
O. As used in this Section:
(1) "1986 Code" means the Internal Revenue Code of 1986, as amended.
(2) "Credit agency" means the Louisiana Housing Corporation or any successor thereof.
Acts 1990, No. 1033, §1, eff. July 1, 1990, and applicable to tax years beginning on or after July 1, 1990; Acts 1999, No. 386, §1; Acts 2001, No. 1032, §15; Acts 2011, No. 408, §5(B), eff. July 5, 2011; Acts 2015, No. 426, §4.