Senator Todd Weiler proposes the following substitute bill:


1     
AFFORDABLE HOUSING AMENDMENTS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Rebecca P. Edwards

5     
Senate Sponsor: Todd Weiler

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to housing and community development.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     creates the Economic Revitalization and Investment Fund;
14          ▸     establishes requirements for the distribution of money from the fund;
15          ▸     modifies state low-income housing tax credit provisions; and
16          ▸     makes technical and conforming changes.
17     Money Appropriated in this Bill:
18          This bill appropriates in fiscal year 2018:
19          ▸     to the Department of Workforce Services -- Economic Revitalization and
20     Investment Fund, as a one-time appropriation:
21               •     from the General Fund, $2,061,000; and
22          ▸     to the Department of Workforce Services -- Olene Walker Housing Loan Fund, as a
23     one-time appropriation:
24               •     from the General Fund, $500,000.
25     Other Special Clauses:
26          This bill provides retrospective operation.
27     Utah Code Sections Affected:
28     AMENDS:
29          35A-8-501, as renumbered and amended by Laws of Utah 2012, Chapter 212
30          35A-8-506, as renumbered and amended by Laws of Utah 2012, Chapter 212
31          59-7-607, as last amended by Laws of Utah 2016, Chapters 135 and 289
32          59-10-1010, as last amended by Laws of Utah 2016, Chapters 135 and 289
33     ENACTS:
34          35A-8-509, Utah Code Annotated 1953
35          35A-8-510, Utah Code Annotated 1953
36          35A-8-511, Utah Code Annotated 1953
37          35A-8-512, Utah Code Annotated 1953
38          35A-8-513, Utah Code Annotated 1953
39     

40     Be it enacted by the Legislature of the state of Utah:
41          Section 1. Section 35A-8-501 is amended to read:
42          35A-8-501. Definitions.
43          As used in this part:
44          (1) "Affordable housing" means housing occupied or reserved for occupancy by
45     households whose incomes are at or below certain income requirements at rental rates
46     affordable to such households.
47          [(1)] (2) "Board" means the Housing Board created by this part.
48          [(2)] (3) "Fund" means the Olene Walker Housing Loan Fund created by this part.
49          (4) (a) "Housing sponsor" means a person who constructs, develops, rehabilitates,
50     purchases, or owns a housing development that is or will be subject to legally enforceable
51     restrictive covenants that require the housing development to provide, at least in part,
52     affordable housing.
53          (b) "Housing sponsor" may include:
54          (i) a local public body;
55          (ii) a nonprofit, limited profit, or for profit corporation;
56          (iii) a limited partnership;
57          (iv) a limited liability company;
58          (v) a joint venture;
59          (vi) a subsidiary of the Utah Housing Corporation;
60          (vii) a cooperative;
61          (viii) a mutual housing organization;
62          (ix) a local government;
63          (x) a local housing authority;
64          (xi) a regional or statewide nonprofit housing or assistance organization; or
65          (xii) any other entity that helps provide affordable housing.
66          [(3)] (5) "Rural" means a county in the state other than Utah, Salt Lake, Davis, or
67     Weber.
68          Section 2. Section 35A-8-506 is amended to read:
69          35A-8-506. Duties of the executive director.
70          [(1)] The executive director, with the approval of the board, may grant or lend fund
71     money to a housing [sponsors] sponsor.
72          [(2) "Housing sponsor" includes a person who constructs, develops, rehabilitates,
73     purchases, or owns a housing development that is or will be subject to legally enforceable
74     restrictive covenants that require the housing development to provide, at least in part,
75     residential housing to low and moderate income persons.]
76          [(3) A housing sponsor includes:]
77          [(a) a local public body;]
78          [(b) a nonprofit, limited profit, or for profit corporation;]
79          [(c) a limited partnership;]
80          [(d) a limited liability company;]
81          [(e) a joint venture;]
82          [(f) a subsidiary of the Utah Housing Corporation or any subsidiary of the subsidiary of
83     the Utah Housing Corporation;]
84          [(g) a cooperative;]
85          [(h) a mutual housing organization;]
86          [(i) a local government;]
87          [(j) a local housing authority;]
88          [(k) a regional or statewide nonprofit housing or assistance organization; or]
89          [(l) any other type of entity or arrangement that helps provide affordable housing for
90     low and moderate income persons.]
91          Section 3. Section 35A-8-509 is enacted to read:
92          35A-8-509. Economic Revitalization and Investment Fund.
93          (1) There is created an enterprise fund known as the "Economic Revitalization and
94     Investment Fund."
95          (2) The Economic Revitalization and Investment Fund consists of money from the
96     following:
97          (a) money appropriated to the account by the Legislature;
98          (b) private contributions;
99          (c) donations or grants from public or private entities; and
100          (d) money returned to the department under Section 35A-8-512.
101          (3) The Economic Revitalization and Investment Fund shall earn interest, which shall
102     be deposited into the Economic Revitalization and Investment Fund.
103          (4) The executive director may distribute money from the Economic Revitalization and
104     Investment Fund to one or more projects that:
105          (a) include affordable housing units for households:
106          (i) whose income is no more than 30% of the area median income for households of
107     the same size in the county or municipality where the project is located; and
108          (ii) at rental rates no greater than the rates described in Subsection 35A-8-511(2)(b);
109     and
110          (b) have been approved by the board in accordance with Section 35A-8-510.
111          (5) (a) A housing sponsor may apply to the department to receive a distribution in
112     accordance with Subsection (4).
113          (b) The application shall include:
114          (i) the location of the project;
115          (ii) the number, size, and tenant income requirements of affordable housing units
116     described in Subsection (4)(a) that will be included in the project; and
117          (iii) a written commitment to enter into a deed restriction that reserves for a period of
118     30 years the affordable housing units described in Subsection (5)(b)(ii) or their equivalent for
119     occupancy by households that meet the income requirements described in Subsection (5)(b)(ii).
120          (c) The commitment in Subsection (5)(b)(iii) shall be considered met if a housing unit
121     is:
122          (i) (A) occupied or reserved for occupancy by a household whose income is no more
123     than 30% of the area median income for households of the same size in the county or
124     municipality where the project is located; or
125          (B) occupied by a household whose income is no more than 60% of the area median
126     income for households of the same size in the county or municipality where the project is
127     located if that household met the income requirement described in Subsection (4)(a) when the
128     household originally entered into the lease agreement for the housing unit; and
129          (ii) rented at a rate no greater than the rate described in Subsection 35A-8-511(2)(b).
130          (d) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
131     department may make additional rules providing procedures for a person to apply to the
132     department to receive a distribution described in Subsection (4).
133          Section 4. Section 35A-8-510 is enacted to read:
134          35A-8-510. Housing loan fund board approval.
135          (1) The board shall review the project applications described in Subsection
136     35A-8-509(5).
137          (2) The board may approve a project that meets the requirements of Subsections
138     35A-8-509(4) and (5) to receive funds from the Economic Revitalization and Investment Fund.
139          (3) The board shall give preference to projects:
140          (a) that include significant additional or matching funds from an individual, private
141     organization, or local government entity;
142          (b) that include significant contributions by the applicant to total project costs,
143     including contributions secured by the applicant from other sources such as professional, craft,
144     and trade services and lender interest rate subsidies;
145          (c) with significant local government contributions in the form of infrastructure,
146     improvements, or other assistance;
147          (d) where the applicant has demonstrated the ability, stability, and resources to
148     complete the project;
149          (e) that will serve the greatest need;
150          (f) that promote economic development benefits;
151          (g) that allow integration into a local government housing plan;
152          (h) that would mitigate or correct existing health, safety, or welfare concerns; or
153          (i) that remedy a gap in the supply of and demand for affordable housing.
154          Section 5. Section 35A-8-511 is enacted to read:
155          35A-8-511. Activities authorized to receive account money.
156          (1) The executive director may distribute funds from the Economic Revitalization and
157     Investment Fund for any of the following activities undertaken as part of an approved project:
158          (a) the acquisition, rehabilitation, or new construction of a building that includes
159     affordable housing units;
160          (b) the purchase of land for the construction of a building that will include affordable
161     housing units; or
162          (c) pre-development work, including planning, studies, design, and site work for a
163     building that will include affordable housing units.
164          (2) The maximum amount of money that may be distributed from the Economic
165     Revitalization and Investment Fund for each affordable housing unit that has been committed
166     in accordance with Subsection 35A-8-509(5)(b)(iii) is the present value, based on the current
167     market interest rate as determined by the board for a multi-family mortgage loan in the county
168     or metropolitan area where the project is located, of 360 monthly payments equal to the
169     difference between:
170          (a) the most recent United States Department of Housing and Urban Development fair
171     market rent for a unit of the same size in the county or metropolitan area where the project is
172     located; and
173          (b) an affordable rent equal to 30% of the income requirement described in Subsection
174     35A-8-509(5)(b)(ii) for a household of:
175          (i) one person if the unit is an efficiency unit;
176          (ii) two people if the unit is a one-bedroom unit;
177          (iii) four people if the unit is a two-bedroom unit;
178          (iv) five people if the unit is a three-bedroom unit;
179          (v) six people if the unit is a four-bedroom unit; or
180          (vi) eight people if the unit is a five-bedroom or larger unit.
181          Section 6. Section 35A-8-512 is enacted to read:
182          35A-8-512. Repayment of funds.
183          (1) Upon the earlier of 30 years from the date an approved project is placed in service
184     or the sale or transfer of the affordable housing units acquired, constructed, or rehabilitated as
185     part of an approved project funded under Section 35A-8-511, the housing sponsor shall remit
186     to the department:
187          (a) the total amount of money distributed by the department to the housing sponsor for
188     the project; and
189          (b) an additional amount of money determined by contract with the department prior to
190     the initial disbursement of money from the Economic Revitalization and Investment Fund.
191          (2) Any claim arising under Subsection (1) is a lien against the real property funded
192     under this chapter.
193          (3) Any money returned to the department under Subsection (1) shall be deposited in
194     the Economic Revitalization and Investment Fund.
195          Section 7. Section 35A-8-513 is enacted to read:
196          35A-8-513. Annual accounting.
197          (1) The executive director shall monitor the activities of recipients of funds from the
198     Economic Revitalization and Investment Fund on a yearly basis to ensure compliance with the
199     terms and conditions imposed on the recipient by the executive director with the approval of
200     the board.
201          (2) A housing sponsor that receives funds from the Economic Revitalization and
202     Investment Fund shall provide the executive director with an annual accounting of how the
203     money the entity received from the Economic Revitalization and Investment Fund has been
204     spent and evidence that the commitment described in Subsection 35A-8-509(5) has been met.
205          (3) The executive director shall make an annual report to the board accounting for the
206     expenditures authorized by the board.
207          (4) The board shall submit a report to the department for inclusion in the annual
208     written report described in Section 35A-1-109 that includes:
209          (a) an accounting for expenditures authorized by the board; and
210          (b) an evaluation of the effectiveness of the program.
211          Section 8. Section 59-7-607 is amended to read:
212          59-7-607. Utah low-income housing tax credit.
213          (1) As used in this section:
214          (a) "Allocation certificate" means a certificate in a form prescribed by the commission
215     and issued by the Utah Housing Corporation to a housing sponsor that specifies the aggregate
216     amount of the tax credit awarded under this section to a qualified development and includes:
217          [(i) the certificate prescribed by the commission and issued by the Utah Housing
218     Corporation to each taxpayer that specifies the percentage of the annual federal low-income
219     housing tax credit that each taxpayer may take as an annual credit against state income tax; or]
220          [(ii) a copy of the allocation certificate that the housing sponsor provides to the
221     taxpayer.]
222          (i) the aggregate annual amount of the tax credit awarded that may be claimed by one
223     or more qualified taxpayers that have been issued a special low-income housing tax credit
224     certificate; and
225          (ii) the credit period over which the tax credit may be claimed by one or more qualified
226     taxpayers that have been issued a special low-income housing tax credit certificate.
227          (b) "Building" means a qualified low-income building as defined in Section 42(c),
228     Internal Revenue Code.
229          (c) "Credit period" means the "credit period" as defined in Section 42(f)(1), Internal
230     Revenue Code.
231          (d) (i) "Designated reporter" means, as selected by a housing sponsor, the housing
232     sponsor itself or one of the housing sponsor's direct or indirect partners, members, or
233     shareholders that will provide information to the Utah Housing Corporation regarding the
234     assignment of tax credits under this section.
235          (ii) Before the Utah Housing Corporation may issue an allocation certificate to a
236     housing sponsor, a housing sponsor shall provide the identity of the housing sponsor's
237     designated reporter to the Utah Housing Corporation.
238          (iii) Before the Utah Housing Corporation may issue a special low-income housing tax
239     credit certificate to a qualified taxpayer, a designated reporter shall provide the information
240     described in Subsection (6) to the Utah Housing Corporation.
241          [(c)] (e) "Federal low-income housing tax credit" means the federal tax credit [under]
242     described in Section 42, Internal Revenue Code.
243          [(d)] (f) "Housing sponsor" means [a corporation in the case of a C corporation, a
244     partnership in the case of a partnership, a corporation in the case of an S corporation, or a
245     limited liability company in the case of a limited liability company] an entity that owns a
246     qualified development.
247          [(e)] (g) "Qualified allocation plan" means [the] a qualified allocation plan adopted by
248     the Utah Housing Corporation [pursuant to] in accordance with Section 42(m), Internal
249     Revenue Code.
250          (h) "Qualified development" means a "qualified low-income housing project":
251          (i) as defined in Section 42(g)(1), Internal Revenue Code; and
252          (ii) that is located in the state.
253          (i) (i) "Qualified taxpayer" means a person that:
254          (A) owns a direct or indirect interest in a qualified development; and
255          (B) meets the requirements to claim a tax credit under this section.
256          (ii) If a housing sponsor is a partnership, limited liability company, or S corporation, a
257     "qualified taxpayer" may include any partner, member, or shareholder of the housing sponsor
258     as determined by the governing documents of the housing sponsor.
259          [(f)] (j) (i) "Special low-income housing tax credit certificate" means a certificate:
260          [(i)] (A) in a form prescribed by the commission;
261          [(ii)] (B) that [a housing sponsor] the Utah Housing Corporation issues to a qualified
262     taxpayer for a taxable year in accordance with this section; and
263          [(iii)] (C) that specifies the amount of the tax credit a qualified taxpayer may claim
264     under this section [if the taxpayer meets the requirements of this section].
265          (ii) The Utah Housing Corporation may only issue one or more special low-income
266     housing tax credit certificates if the aggregate specified amount on all special low-income
267     housing tax credit certificates issued in relation to a qualified development does not exceed the
268     aggregate amount of tax credit awarded to the qualified development and issued to a housing
269     sponsor in an allocation certificate.
270          [(g) "Taxpayer" means a person that is allowed a tax credit in accordance with this
271     section which is the corporation in the case of a C corporation, the partners in the case of a
272     partnership, the shareholders in the case of an S corporation, and the members in the case of a
273     limited liability company.]
274          (2) (a) For taxable years beginning on or after January 1, 1995, [there is allowed] a
275     qualified taxpayer who has been issued a special low-income housing tax credit certificate by
276     the Utah Housing Corporation may claim a nonrefundable tax credit against taxes otherwise
277     due under this chapter or Chapter 8, Gross Receipts Tax on Certain Corporations Not Required
278     to Pay Corporate Franchise or Income Tax[, for taxpayers issued an allocation certificate] Act.
279          (b) The tax credit shall be in an amount equal to [the greater of the amount of:] the tax
280     credit amount specified on the special low-income housing tax credit certificate that the Utah
281     Housing Corporation issues to a qualified taxpayer under this section.
282          [(i) federal low-income housing tax credit to which the taxpayer is allowed during that
283     year multiplied by the percentage specified in an allocation certificate issued by the Utah
284     Housing Corporation; or]
285          [(ii) tax credit specified in the special low-income housing tax credit certificate that the
286     housing sponsor issues to the taxpayer as provided in Subsection (2)(c).]
287          [(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:]
288          [(i) the total amount of low-income housing tax credit under this section that:]
289          [(A) a housing sponsor is allowed for a building; and]
290          [(B) all of the taxpayers may claim with respect to the building if the taxpayers meet
291     the requirements of this section; and]
292          [(ii) the percentage of tax credit a taxpayer may claim:]
293          [(A) under this section if the taxpayer meets the requirements of this section; and]
294          [(B) as provided in the agreement between the taxpayer and the housing sponsor.]
295          [(d)] (c) (i) For [the] a calendar year beginning [on January 1, 1995, through the
296     calendar year beginning on January 1, 2025] on or before December 31, 2016, the aggregate
297     annual tax credit that the Utah Housing Corporation may allocate for the credit period
298     described in Section 42(f), Internal Revenue Code, pursuant to this section and Section
299     59-10-1010 is an amount equal to the product of:
300          (A) 12.5 cents; and
301          (B) the population of Utah.
302          (ii) For a calendar year beginning on or after January 1, 2017, the aggregate annual tax
303     credit that the Utah Housing Corporation may allocate for the credit period described in
304     Section 42(f), Internal Revenue Code, pursuant to this section and Section 59-10-1010 is an
305     amount equal to the product of:
306          (A) 34.5 cents; and
307          (B) the population of Utah.
308          [(ii)] (iii) For purposes of this section, the population of Utah shall be determined in
309     accordance with Section 146(j), Internal Revenue Code.
310          (3) (a) The Utah Housing Corporation shall determine criteria and procedures for
311     allocating the tax credit under this section and Section 59-10-1010 and incorporate the criteria
312     and procedures into the Utah Housing Corporation's qualified allocation plan.
313          (b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
314     based on:
315          (i) the number of affordable housing units to be created in Utah for low and moderate
316     income persons in [the residential housing development of which the building is a part] a
317     qualified development;
318          (ii) the level of area median income being served by [the] a qualified development;
319          (iii) the need for the tax credit for the economic feasibility of [the] a qualified
320     development; and
321          (iv) the extended period for which [the] a qualified development commits to remain as
322     affordable housing.
323          [(4) (a) The following may apply to the Utah Housing Corporation for a tax credit
324     under this section:]
325          [(i) any housing sponsor that has received an allocation of the federal low-income
326     housing tax credit; or]
327          [(ii) any applicant for an allocation of the federal low-income housing tax credit.]
328          [(b) The Utah Housing Corporation may not require fees for applications of the tax
329     credit under this section in addition to those fees required for applications for the federal
330     low-income housing tax credit.]
331          (4) Any housing sponsor may apply to the Utah Housing Corporation for a tax credit
332     allocation under this section.
333          (5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
334     allocate to a [qualifying housing sponsor] qualified development in accordance with the
335     qualified allocation plan of the Utah Housing Corporation.
336          (b) (i) The Utah Housing Corporation [shall allocate the tax credit to housing sponsors
337     in the same manner that it allocates federal low-income housing credits and] shall issue an
338     allocation certificate to [qualifying housing sponsors] a housing sponsor as evidence of the
339     allocation.
340          (ii) The allocation certificate under Subsection (5)(b)(i) shall specify [the allowed
341     percentage of the federal low-income housing tax credit as determined by the Utah Housing
342     Corporation] the amount of the tax credit allocated to a qualified development as determined
343     by the Utah Housing Corporation.
344          (c) The [percentage] amount of the tax credit specified in an allocation certificate may
345     not exceed 100% of the federal low-income housing tax credit awarded to a qualified
346     development.
347          [(6) A housing sponsor shall provide a copy of the allocation certificate to each
348     taxpayer that is issued a special low-income housing tax credit certificate.]
349          [(7) (a) A housing sponsor shall provide to the commission a list of:]
350          [(i) the taxpayers issued a special low-income housing tax credit certificate; and]
351          [(ii) for each taxpayer described in Subsection (7)(a)(i), the amount of tax credit listed
352     on the special low-income housing tax credit certificate.]
353          [(b) A housing sponsor shall provide the list required by Subsection (7)(a):]
354          [(i) to the commission;]
355          [(ii) on a form provided by the commission; and]
356          [(iii) with the housing sponsor's tax return for each taxable year for which the housing
357     sponsor issues a special low-income housing tax credit certificate described in this Subsection
358     (7).]
359          (6) Before the Utah Housing Corporation may issue a special low-income housing tax
360     credit certificate, a designated reporter shall provide to the Utah Housing Corporation in a form
361     prescribed by the Utah Housing Corporation:
362          (a) a list of each qualified taxpayer that has been assigned a portion of the tax credit
363     awarded in an allocation certificate;
364          (b) for each qualified taxpayer described in Subsection (6)(a), the amount of tax credit
365     that has been assigned; and
366          (c) an aggregate list of the tax credit amount assigned related to a qualified
367     development demonstrating that the aggregate annual amount of the tax credits assigned does
368     not exceed the aggregate annual tax credit awarded in the allocation certificate.
369          (7) The Utah Housing Corporation shall provide a special low-income housing tax
370     credit certificate to a qualified taxpayer if:
371          (a) a designated reporter has provided the information regarding the qualified taxpayer
372     as described in Subsection (6); and
373          (b) the Utah Housing Corporation has verified that the aggregate tax credit amount
374     assigned with respect to a qualified development does not exceed the total tax credit awarded
375     in the allocation certificate.
376          (8) (a) All elections made by [the taxpayer] a housing sponsor pursuant to Section 42,
377     Internal Revenue Code, shall apply to this section.
378          (b) (i) If a [taxpayer] qualified development is required to recapture a portion of any
379     federal low-income housing tax credit, [the] then each qualified taxpayer shall also be required
380     to recapture a portion of any state tax credits authorized by this section.
381          (ii) The state recapture amount shall be equal to the percentage of the state tax credit
382     that equals the proportion the federal recapture amount bears to the original federal low-income
383     housing tax credit amount subject to recapture.
384          (iii) The designated reporter shall identify each qualified taxpayer that is required to
385     recapture a portion of any state tax credit as described in this Subsection (8)(b).
386          (9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
387     reallocated within the same time period as provided in Section 42, Internal Revenue Code.
388          (b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
389     be carried over for allocation in subsequent years.
390          [(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
391     tax credit exceeds the tax, may be carried back three years or may be carried forward five years
392     as a credit against the tax.]
393          (10) (a) If a tax credit is not claimed by a qualified taxpayer in the year in which it is
394     earned because the tax credit is more than the tax owed by the qualified taxpayer, the tax credit
395     may be carried back three years or may be carried forward five years as a credit against the tax.
396          (b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
397          (i) before the application of the tax credits earned in the current year; and
398          (ii) on a first-earned first-used basis.
399          (11) Any tax credit taken in this section may be subject to an annual audit by the
400     commission.
401          (12) The Utah Housing Corporation shall annually provide an electronic report to the
402     Revenue and Taxation Interim Committee which shall include at least:
403          (a) the purpose and effectiveness of the tax credits; and
404          (b) the benefits of the tax credits to the state.
405          (13) The commission may, in consultation with the Utah Housing Corporation,
406     [promulgate rules] make rules in accordance with Title 63G, Chapter 3, Utah Administrative
407     Rulemaking Act, to implement this section.
408          Section 9. Section 59-10-1010 is amended to read:
409          59-10-1010. Utah low-income housing tax credit.
410          (1) As used in this section:
411          (a) "Allocation certificate" means a certificate in a form prescribed by the commission
412     and issued by the Utah Housing Corporation to a housing sponsor that specifies the aggregate
413     amount of the tax credit awarded under this section to a qualified development and includes:
414          [(i) the certificate prescribed by the commission and issued by the Utah Housing
415     Corporation to each claimant, estate, or trust that specifies the percentage of the annual federal
416     low-income housing credit that each claimant, estate, or trust may take as an annual tax credit
417     against a tax imposed by this chapter; or]
418          [(ii) a copy of the allocation certificate that the housing sponsor provides to the
419     claimant, estate, or trust.]
420          (i) the aggregate annual amount of the tax credit awarded that may be claimed by one
421     or more qualified taxpayers that have been issued a special low-income housing tax credit
422     certificate; and
423          (ii) the credit period over which the tax credit may be claimed by one or more qualified
424     taxpayers that have been issued a special low-income housing tax credit certificate.
425          (b) "Building" means a qualified low-income building as defined in Section 42(c),
426     Internal Revenue Code.
427          (c) "Credit period" means the "credit period" as defined in Section 42(f)(1), Internal
428     Revenue Code.
429          (d) (i) "Designated reporter" means, as selected by a housing sponsor, the housing
430     sponsor itself or one of the housing sponsor's direct or indirect partners, members, or
431     shareholders that will provide information to the Utah Housing Corporation regarding the
432     assignment of tax credits under this section.
433          (ii) Before the Utah Housing Corporation may issue an allocation certificate to a
434     housing sponsor, a housing sponsor shall provide the identity of the housing sponsor's
435     designated reporter to the Utah Housing Corporation.
436          (iii) Before the Utah Housing Corporation may issue a special low-income housing tax
437     credit certificate to a qualified taxpayer, a designated reporter shall provide the information
438     described in Subsection (6) to the Utah Housing Corporation.
439          [(c)] (e) "Federal low-income housing credit" means the federal low-income housing
440     credit [under] described in Section 42, Internal Revenue Code.
441          [(d)] (f) "Housing sponsor" means [a corporation in the case of a C corporation, a
442     partnership in the case of a partnership, a corporation in the case of an S corporation, or a
443     limited liability company in the case of a limited liability company] an entity that owns a
444     qualified development.
445          [(e)] (g) "Qualified allocation plan" means [the] a qualified allocation plan adopted by
446     the Utah Housing Corporation [pursuant to] in accordance with Section 42(m), Internal
447     Revenue Code.
448          (h) "Qualified development" means a "qualified low-income housing project":
449          (i) as defined in Section 42(g)(1), Internal Revenue Code; and
450          (ii) that is located in the state.
451          (i) (i) "Qualified taxpayer" means a claimant, estate, or trust that:
452          (A) owns a direct or indirect interest in a qualified development; and
453          (B) meets the requirements to claim a tax credit under this section.
454          (ii) If a housing sponsor is a partnership, limited liability company, or S corporation, a
455     "qualified taxpayer" may include any partner, member, or shareholder of the housing sponsor
456     as determined by the governing documents of the housing sponsor.
457          [(f)] (j) (i) "Special low-income housing tax credit certificate" means a certificate:
458          [(i)] (A) in a form prescribed by the commission;
459          [(ii)] (B) that [a housing sponsor] the Utah Housing Corporation issues to a [claimant,
460     estate, or trust] qualified taxpayer for a taxable year in accordance with this section; and
461          [(iii)] (C) that specifies the amount of [a] the tax credit a [claimant, estate, or trust]
462     qualified taxpayer may claim under this section [if the claimant, estate, or trust meets the
463     requirements of this section].
464          (ii) The Utah Housing Corporation may only issue one or more special low-income
465     housing tax credit certificates if the aggregate specified amount on all special low-income
466     housing tax credit certificates issued in relation to a qualified development does not exceed the
467     aggregate amount of tax credit awarded to a qualified development and issued to a housing
468     sponsor in an allocation certificate.
469          (2) (a) For taxable years beginning on or after January 1, 1995, [there is allowed] a
470     qualified taxpayer who has been issued a special low-income housing tax credit certificate by
471     the Utah Housing Corporation may claim a nonrefundable tax credit against taxes otherwise
472     due under this chapter [for a claimant, estate, or trust issued an allocation certificate].
473          (b) The tax credit shall be in an amount equal to [the greater of the amount of:] the tax
474     credit amount specified on the special low-income housing tax credit certificate that the Utah
475     Housing Corporation issues to a qualified taxpayer under this section.
476          [(i) federal low-income housing credit to which the claimant, estate, or trust is allowed
477     during that year multiplied by the percentage specified in an allocation certificate issued by the
478     Utah Housing Corporation; or]
479          [(ii) tax credit specified in the special low-income housing tax credit certificate that the
480     housing sponsor issues to the claimant, estate, or trust as provided in Subsection (2)(c).]
481          [(c) For purposes of Subsection (2)(b)(ii), the tax credit is equal to the product of:]
482          [(i) the total amount of low-income housing tax credit under this section that:]
483          [(A) a housing sponsor is allowed for a building; and]
484          [(B) all of the claimants, estates, and trusts may claim with respect to the building if
485     the claimants, estates, and trusts meet the requirements of this section; and]
486          [(ii) the percentage of tax credit a claimant, estate, or trust may claim:]
487          [(A) under this section if the claimant, estate, or trust meets the requirements of this
488     section; and]
489          [(B) as provided in the agreement between the claimant, estate, or trust and the housing
490     sponsor.]
491          [(d)] (c) (i) For [the] a calendar year beginning on [January 1, 1995, through the
492     calendar year beginning on January 1, 2025] or before December 31, 2016, the aggregate
493     annual tax credit that the Utah Housing Corporation may allocate for the credit period
494     described in Section 42(f), Internal Revenue Code, pursuant to this section and Section
495     59-7-607 is an amount equal to the product of:
496          (A) 12.5 cents; and
497          (B) the population of Utah.
498          (ii) For a calendar year beginning on or after January 1, 2017, the aggregate annual tax
499     credit that the Utah Housing Corporation may allocate for the credit period described in
500     Section 42(f), Internal Revenue Code, pursuant to this section and Section 59-7-607 is an
501     amount equal to the product of:
502          (A) 34.5 cents; and
503          (B) the population of Utah.
504          [(ii)] (iii) For purposes of this section, the population of Utah shall be determined in
505     accordance with Section 146(j), Internal Revenue Code.
506          (3) (a) The Utah Housing Corporation shall determine criteria and procedures for
507     allocating the tax credit under this section and Section 59-7-607 and incorporate the criteria
508     and procedures into the Utah Housing Corporation's qualified allocation plan.
509          (b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a)
510     based on:
511          (i) the number of affordable housing units to be created in Utah for low and moderate
512     income persons in [the residential housing development of which the building is a part] a
513     qualified development;
514          (ii) the level of area median income being served by [the] a qualified development;
515          (iii) the need for the tax credit for the economic feasibility of [the] a qualified
516     development; and
517          (iv) the extended period for which [the] a qualified development commits to remain as
518     affordable housing.
519          [(4) (a) The following may apply to the Utah Housing Corporation for a tax credit
520     under this section:]
521          [(i) any housing sponsor that is a claimant, estate, or trust if that housing sponsor has
522     received an allocation of the federal low-income housing credit; or]
523          [(ii) any applicant for an allocation of the federal low-income housing credit if that
524     applicant is a claimant, estate, or trust.]
525          [(b) The Utah Housing Corporation may not require fees for applications of the tax
526     credit under this section in addition to those fees required for applications for the federal
527     low-income housing credit.]
528          (4) Any housing sponsor may apply to the Utah Housing Corporation for a tax credit
529     allocation under this section.
530          (5) (a) The Utah Housing Corporation shall determine the amount of the tax credit to
531     allocate to a [qualifying housing sponsor] qualified development in accordance with the
532     qualified allocation plan of the Utah Housing Corporation.
533          (b) (i) The Utah Housing Corporation [shall allocate the tax credit to housing sponsors
534     in the same manner that it allocates federal low-income housing credits and] shall issue an
535     allocation certificate to [qualifying housing sponsors] a housing sponsor as evidence of the
536     allocation.
537          (ii) The allocation certificate under Subsection (5)(b)(i) shall specify [the allowed
538     percentage of the federal low-income housing credit] the amount of the tax credit allocated to a
539     qualified development as determined by the Utah Housing Corporation.
540          (c) The [percentage] amount of the tax credit specified in an allocation certificate may
541     not exceed 100% of the federal low-income housing credit awarded to a qualified development.
542          [(6) A housing sponsor shall provide a copy of the allocation certificate to each
543     claimant, estate, or trust that is issued a special low-income housing tax credit certificate.]
544          [(7) (a) A housing sponsor shall provide to the commission a list of:]
545          [(i) the claimants, estates, and trusts issued a special low-income housing tax credit
546     certificate; and]
547          [(ii) for each claimant, estate, or trust described in Subsection (7)(a)(i), the amount of
548     tax credit listed on the special low-income housing tax credit certificate.]
549          [(b) A housing sponsor shall provide the list required by Subsection (7)(a):]
550          [(i) to the commission;]
551          [(ii) on a form provided by the commission; and]
552          [(iii) with the housing sponsor's tax return for each taxable year for which the housing
553     sponsor issues a special low-income housing tax credit certificate described in this Subsection
554     (7).]
555          (6) Before the Utah Housing Corporation may issue a special low-income housing tax
556     credit certificate, a designated reporter shall provide to the Utah Housing Corporation in a form
557     prescribed by the Utah Housing Corporation:
558          (a) a list of each qualified taxpayer that has been assigned a portion of the tax credit
559     awarded in an allocation certificate;
560          (b) for each qualified taxpayer described in Subsection (6)(a), the amount of tax credit
561     that has been assigned; and
562          (c) an aggregate list of the tax credit amount assigned related to a qualified
563     development demonstrating that the aggregate annual amount of the tax credits assigned does
564     not exceed the aggregate annual tax credit awarded in the allocation certificate.
565          (7) The Utah Housing Corporation shall provide a special low-income housing tax
566     credit certificate to a qualified taxpayer if:
567          (a) a designated reporter has provided the information regarding the qualified taxpayer
568     as described in Subsection (6); and
569          (b) the Utah Housing Corporation has verified that the aggregate tax credit amount
570     assigned with respect to a qualified development does not exceed the total tax credit awarded
571     in the allocation certificate.
572          (8) (a) All elections made by [the claimant, estate, or trust] a housing sponsor pursuant
573     to Section 42, Internal Revenue Code, shall apply to this section.
574          (b) (i) If a [claimant, estate, or trust] qualified taxpayer is required to recapture a
575     portion of any federal low-income housing credit, the [claimant, estate, or trust] qualified
576     taxpayer shall also be required to recapture a portion of any state tax credits authorized by this
577     section.
578          (ii) The state recapture amount shall be equal to the percentage of the state tax credit
579     that equals the proportion the federal recapture amount bears to the original federal low-income
580     housing credit amount subject to recapture.
581          (iii) The designated reporter shall identify each qualified taxpayer that is required to
582     recapture a portion of any state tax credits as described in this Subsection (8)(b).
583          (9) (a) Any tax credits returned to the Utah Housing Corporation in any year may be
584     reallocated within the same time period as provided in Section 42, Internal Revenue Code.
585          (b) Tax credits that are unallocated by the Utah Housing Corporation in any year may
586     be carried over for allocation in subsequent years.
587          [(10) (a) Amounts otherwise qualifying for the tax credit, but not allowable because the
588     tax credit exceeds the tax, may be carried back three years or may be carried forward five years
589     as a tax credit.]
590          (10) (a) If a tax credit is not claimed by a qualified taxpayer in the year in which it is
591     earned because the tax credit is more than the tax owed by the qualified taxpayer, the tax credit
592     may be carried back three years or may be carried forward five years as a credit against the tax.
593          (b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
594          (i) before the application of the tax credits earned in the current year; and
595          (ii) on a first-earned first-used basis.
596          (11) Any tax credit taken in this section may be subject to an annual audit by the
597     commission.
598          (12) The Utah Housing Corporation shall annually provide an electronic report to the
599     Revenue and Taxation Interim Committee which shall include at least:
600          (a) the purpose and effectiveness of the tax credits; and
601          (b) the benefits of the tax credits to the state.
602          (13) The commission may, in consultation with the Utah Housing Corporation,
603     promulgate rules to implement this section.
604          Section 10. Appropriation for expendable funds and accounts.
605          The Legislature has reviewed the following expendable funds for the fiscal year
606     beginning July 1, 2017, and ending June 30, 2018. These amounts are additions to amounts
607     otherwise reviewed for fiscal year 2018. The Legislature authorizes the State Division of
608     Finance to transfer amounts among funds and accounts as indicated. Outlays and expenditures
609     from the recipient funds may be made without further legislative action according to a fund's
610     applicable authorizing statute.
611          To Department of Workforce Services -- Economic Revitalization
612          and Investment Fund
613               From General Fund, One-time
$2,061,000

614               Schedule of Programs:
615                    Economic Revitalization and
616                    Investment Fund                    $2,061,000
617          To Department of Workforce Services -- Olene Walker Housing Loan Fund
618               From General Fund, One-time
$500,000

619               Schedule of Programs:
620                    Olene Walker Housing Loan Fund          $500,000
621          The Legislature intends that up to $500,000 of the one-time appropriation to the Olene
622     Walker Housing Loan Fund be used by the Housing and Community Development Division to
623     develop a pilot program for reimbursing persons under certain limited circumstances who
624     provide housing to tenants using Federal Housing Choice Vouchers.
625          Section 11. Retrospective operation.
626          The amendments to Sections 59-7-607 and 59-10-1010 have retrospective operation for
627     a taxable year beginning on or after January 1, 2017.