SEARCH SITE

VIRGINIA LAW PORTAL

SEARCHABLE DATABASES

ACROSS SESSIONS

Developed and maintained by the Division of Legislative Automated Systems.

2006 SESSION

069160140
SENATE BILL NO. 279
Offered January 11, 2006
Prefiled January 10, 2006
A BILL to amend and reenact §§ 36-55.63, 36-137, and 36-139 of the Code of Virginia and to amend the Code of Virginia by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered 58.1-439.12:02, relating to tax credits for low-income housing units.
----------
Patron-- Whipple
----------
Referred to Committee on Finance
----------

Be it enacted by the General Assembly of Virginia:

1.  That §§ 36-55.63, 36-137, and 36-139 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered 58.1-439.12:02 as follows:

§ 36-55.63. Low-income housing credit.

A. Any person shall be entitled to a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); or Article 1 (§ 58.1-2500 et seq.) of Chapter 25 of Title 58.1 for any five taxable years in which a federal low-income housing credit is allowed for low-income housing units placed in service on or after January 1, 1998, provided such person qualified for and claimed the low-income housing credit on the federal income tax return filed for the taxable year, and meets the qualifications established by the Board of Housing and Community Development for claiming such credit on the applicable Virginia tax return.

B. The Board of Housing and Community Development shall issue regulations establishing the amount of the low-income housing credit allowable, the taxable year or years in which such credit may be taken by the taxpayer, and the terms and conditions for qualifying for such credit. The Virginia low-income housing credit amount shall be a percentage of the federal low-income tax credit claimed for the taxable year; however, the specific percentage shall be determined by the Board. If the low-income housing credit claimed on the person's federal tax return was calculated on a period of less than twelve months, the Board may nevertheless calculate the Virginia low-income housing credit amount on the basis of a twelve-month period for the taxable year.

C. The Department of Housing and Community Development shall administer the approval of low-income housing credits. The total maximum amount of low-income housing credits which may be approved by the Board in any calendar year shall be $500,000. Credits granted to a partnership, limited liability company or electing small business corporation (S corporation) shall be allocated among all partners or shareholders, respectively, either in proportion to their ownership interest in such entity or as the partners or shareholders mutually agree as provided in an executed document, the form of which shall be prescribed by the Board.

D. If any person qualifies in a taxable year for the Virginia low-income housing credit, and in a subsequent taxable year is subject to the credit recapture provisions for federal income tax purposes, such person shall similarly be subject to a credit recapture amount on the Virginia tax return for which the applicable Virginia low-income housing credit was applied or used. The Board shall promulgate regulations establishing the terms and conditions for computing the credit recapture amount for the applicable Virginia tax return.

E. To claim the credit authorized under this section, the taxpayer shall apply to the Department of Housing and Community Development to determine the credit amount allowable for the taxable year. The Department shall certify to the Department of Taxation or the State Corporation Commission, as applicable, that such person qualified for the Virginia low-income housing credit amount claimed on the applicable tax return for the taxable year. The taxpayer shall attach the certification form to the Virginia tax return filed with the Department of Taxation or the State Corporation Commission, as applicable. The Department of Housing and Community Development shall also provide the Department of Taxation or the State Corporation Commission, as applicable, with credit recapture amounts and any other information it may require relating to the credit claimed by the taxpayer.

F. In no case shall the Department of Housing and Community Development approve low-income housing credits pursuant to this section for housing units placed in service on or after January 1, 2006. In addition, only those persons who were approved by the Department to receive a credit under this section and § 58.1-435 for their taxable year beginning in calendar year 2005 shall be eligible to receive credit under this section for taxable year 2006 and thereafter, and such persons shall be eligible for credit only for those low-income housing units for which the Department approved credit under this section and § 58.1-435 for taxable year 2005.

§ 36-137. Powers and duties of Board; appointment of Building Code Academy Advisory Committee.

The Board shall exercise the following powers and duties, and such others as may be provided by law:

1. Provide a means of citizen access to the Department.

2. Provide a means of publicizing the policies and programs of the Department in order to educate the public and elicit public support for Department activities.

3. Monitor the policies and activities of the Department and have the right of access to departmental information.

4. Advise the Governor and the Director on matters relating to housing and community development.

5. Make such rules and regulations as may be necessary to carry out its responsibilities and repeal or amend such rules when necessary.

6. Issue a certificate of competence concerning the content, application, and intent of specified subject areas of the building and fire prevention regulations promulgated by the Board to present or prospective personnel of local governments and to any other persons seeking to become qualified to perform inspections pursuant to Chapter 6 (§ 36-97 et seq.) of this title, Chapter 9 (§ 27-94 et seq.) of Title 27, and any regulations adopted thereunder, who have completed training programs or in other ways demonstrated adequate knowledge.

7. Levy by regulation up to two percent of building permit fees authorized pursuant to § 36-105 to support training programs of the Building Code Academy established pursuant to § 36-139. Local building departments shall collect such levy and transmit it quarterly to the Department of Housing and Community Development. Localities that maintain, individual or regional, training academies accredited by the Department of Housing and Community Development shall retain such levy. However, such localities may send employees to training programs of the Building Code Academy upon payment of a fee calculated to cover the cost of such training. Any unspent balance shall be reappropriated each year for the continued operation of the Building Code Academy.

The Board shall appoint a Building Code Academy Advisory Committee (the Committee) comprised of representatives of code enforcement personnel and construction industry professions affected by the provisions of the building and fire prevention regulations promulgated by the Board. Members of the Committee shall receive no compensation but shall be entitled to be reimbursed for all reasonable and necessary expenses incurred in the performance of their duties in accordance with § 2.2-2813. The Committee shall advise the Board and the Director on policies, procedures, operations, and other matters pertinent to enhancing the delivery of training services provided by the Building Code Academy.

8. Establish general policies, procedures, and programs for the Virginia Housing Partnership Revolving Fund established in Chapter 9 (§ 36-141 et seq.) of this title.

9. Determine the categories of housing programs, housing sponsors and persons and families of low and moderate income eligible to participate in grant or loan programs of the Virginia Housing Partnership Revolving Fund and designate the proportion of such grants or loans to be made available in each category.

10. Advise the Director of the Department on the program guidelines required to accomplish the policies and procedures of the Virginia Housing Partnership Revolving Fund.

11. Advise the Virginia Housing Development Authority on matters relating to the administration and management of loans and grants from the Virginia Housing Partnership Revolving Fund.

12. Establish the amount of the low-income housing credit pursuant to § 36-55.63 and the community housing tax credit pursuant to § 58.1-439.12:02, the terms and conditions for qualifying for such creditcredits, and the terms and conditions for computing any credit recapture amount for the Virginia income tax return.

13. Serve in an advisory capacity to the Center for Housing Research established by § 23-135.7:14.

14. Advise the Department in the development of the Consolidated Plan Strategy to guide and coordinate the housing programs of the Department, the Virginia Housing Development Authority, and other state agencies and instrumentalities.

15. Advise the Governor and the Department on the expansion of affordable, accessible housing for older Virginians and Virginians with disabilities, including supportive services.

§ 36-139. Powers and duties of Director.

The Director of the Department of Housing and Community Development shall have the following responsibilities:

1. Collecting from the governmental subdivisions of the Commonwealth information relevant to their planning and development activities, boundary changes, changes of forms and status of government, intergovernmental agreements and arrangements, and such other information as he may deem necessary.

2. Making information available to communities, planning district commissions, service districts and governmental subdivisions of the Commonwealth.

3. Providing professional and technical assistance to, and cooperating with, any planning agency, planning district commission, service district, and governmental subdivision engaged in the preparation of development plans and programs, service district plans, or consolidation agreements.

4. Assisting the Governor in the providing of such state financial aid as may be appropriated by the General Assembly in accordance with § 15.2-4216.

5. Administering federal grant assistance programs, including funds from the Appalachian Regional Commission, the Economic Development Administration and other such federal agencies, directed at promoting the development of the Commonwealth's communities and regions.

6. Developing state community development policies, goals, plans and programs for the consideration and adoption of the Board with the ultimate authority for adoption to rest with the Governor and the General Assembly.

7. Developing a Consolidated Plan to guide the development and implementation of housing programs and community development in the Commonwealth for the purpose of meeting the housing and community development needs of the Commonwealth and, in particular, those of low-income and moderate-income persons, families and communities.

8. Determining present and future housing requirements of the Commonwealth on an annual basis and revising the Consolidated Plan, as necessary to coordinate the elements of housing production to ensure the availability of housing where and when needed.

9. Assuming administrative coordination of the various state housing programs and cooperating with the various state agencies in their programs as they relate to housing.

10. Establishing public information and educational programs relating to housing; devising and administering programs to inform all citizens about housing and housing-related programs that are available on all levels of government; designing and administering educational programs to prepare families for home ownership and counseling them during their first years as homeowners; and promoting educational programs to assist sponsors in the development of low and moderate income housing as well as programs to lessen the problems of rental housing management.

11. Administering the provisions of the Industrialized Building Safety Law (§ 36-70 et seq.).

12. Administering the provisions of the Uniform Statewide Building Code (§ 36-97 et seq.).

13. Administering the provisions of the Statewide Fire Prevention Code (§ 27-94 et seq.).

14. Establishing and operating a Building Code Academy for the training of persons in the content, application, and intent of specified subject areas of the building and fire prevention regulations promulgated by the Board of Housing and Community Development.

15. Administering, in conjunction with the federal government, and promulgating any necessary regulations regarding energy standards for existing buildings as may be required pursuant to federal law.

16. Identifying and disseminating information to local governments about the availability and utilization of federal and state resources.

17. Administering, with the cooperation of the Department of Health, state assistance programs for public water supply systems.

18. Advising the Board on matters relating to policies and programs of the Virginia Housing Partnership Revolving Fund.

19. Designing and establishing program guidelines to meet the purposes of the Virginia Housing Partnership Revolving Fund and to carry out the policies and procedures established by the Board.

20. Preparing agreements and documents for loans and grants to be made from the Virginia Housing Partnership Revolving Fund; soliciting, receiving, reviewing and selecting the applications for which loans and grants are to be made from such fund; directing the Virginia Housing Development Authority as to the closing and disbursing of such loans and grants and as to the servicing and collection of such loans; directing the Virginia Housing Development Authority as to the regulation and monitoring of the ownership, occupancy and operation of the housing developments and residential housing financed or assisted by such loans and grants; and providing direction and guidance to the Virginia Housing Development Authority as to the investment of moneys in such fund.

21. Advising the Board on matters relating to policies for the low-income housing credit and the community housing tax credit and administering the approval of low-income housing such credits as provided in §§ 36-55.63 and 58.1-439.12:02, respectively.

22. Establishing and administering program guidelines for a statewide homeless intervention program.

23. Administering 15 percent of the Low Income Home Energy Assistance Program (LIHEAP) Block Grant and any contingency funds awarded and carry over funds, furnishing home weatherization and associated services to low-income households within the Commonwealth in accordance with applicable federal law and regulations.

24. Developing a strategy concerning the expansion of affordable, accessible housing for older Virginians and Virginians with disabilities, including supportive services.

25. Serving as the Executive Director of the Commission on Local Government as prescribed in § 15.2-2901 and perform all other duties of that position as prescribed by law.

26. Carrying out such other duties as may be necessary and convenient to the exercise of powers granted to the Department.

§ 58.1-439.12:02. Community Housing Tax Credit.

A. For taxable years beginning on or after January 1, 2006, a developer or investor who builds or substantially rehabilitates a multifamily housing project that qualifies under the federal Low Income Housing Tax Credit Program (LIHTC) administered by the Virginia Housing Development Authority, shall be allowed a credit against the tax imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1- 1200 et seq.); or Article 1 (§ 58.1-2500 et seq.) of Chapter 25 of Title 58.1. The credit shall equal 50% of the actual amount expended by the developer or investor to acquire the land for such multifamily housing project qualifying under the federal LIHTC. In no event, however, shall the credit exceed an amount equal to $5,000 multiplied by the number of units of low-income housing (placed in service as a result of such land acquisition) that qualify under the federal LIHTC. Credit shall only be allowed for that portion of such land acquisition costs that directly relates to a unit or units of low-income housing that qualify under the federal LIHTC. The credit may be claimed in the taxable year in which the qualifying multifamily housing is placed in service.

B. The amount of credit that may be claimed by the taxpayer in any taxable year shall not exceed the lesser of (i) the tax imposed for the taxable year, or (ii) $500,000. Any credit not usable for the taxable year may be carried over for credit in the next five taxable years until the total amount of the tax credit has been taken.

C. A developer or investor who has been allowed a tax credit under this section may transfer any unused credit for use by another taxpayer on a Virginia income tax return.

D. The land that is the subject of a tax credit under this section shall not again be the subject of a tax credit under this section for at least 15 years from when the credit is first allowed. In addition, no tax credit shall be allowed more than once under this section for a unit or units of multifamily housing unless the basis for subsequent tax credit is a substantial rehabilitation to such unit or units.

E. Any credit claimed or transferred under this section shall be claimed or transferred in accordance with guidelines established by the Board of the Department of Housing and Community Development. If any multifamily housing for which a credit has been allowed under this section is not operated in compliance with the provisions of § 42 of the U.S. Internal Revenue Code of 1986, as amended, within the 15 years that immediately follow the taxable year in which the qualifying multifamily housing is placed in service, the Department of Taxation or the State Corporation Commission, as applicable, shall recapture the entire amount of any credit claimed for such multifamily housing up through the taxable year of noncompliance. In addition, no credit may be claimed pursuant to this section for such noncomplying multifamily housing subsequent to the finding of noncompliance. The entire amount of any such credit claimed shall be recaptured from the taxpayer who actually claimed the credit. The Department of Housing and Community Development shall at least annually check each multifamily housing that it has certified, pursuant to subsection G, as qualifying for the credit provided under this section to verify that such housing is being operated in compliance with the provisions of § 42 of the U.S. Internal Revenue Code of 1986, as amended.

F. The Board of Housing and Community Development shall develop guidelines setting forth the general requirements for qualification of the credit provided under this section, including the land acquisition costs for which credit is eligible. The guidelines shall also include provisions prohibiting a tax credit under this section and § 36-55.63 in the same taxable year for the same housing unit. To qualify for such credit, the developer or investor shall comply with a competitive process for allocation of tax credits established by the Board, and the process shall be in conjunction with applying for the federal LIHTC. For purposes of this section, the total amount of tax credits available each fiscal year to all such developers or investors shall not exceed $10 million. The promulgation of guidelines by the Board shall be exempt from the Administrative Process Act (§ 2.2-4000 et seq.).

G. To claim the credit allowed under this section, a developer or investor shall apply to the Department of Housing and Community Development, which shall determine the amount of credit. The Director of the Department of Housing and Community Development shall certify to the Department of Taxation or the State Corporation Commission, as applicable, that such person qualified for the credit amount claimed on the applicable tax return for the taxable year. The developer or investor shall attach the certification form to the Virginia tax return filed with the Department of Taxation or the State Corporation Commission, as applicable. The Director shall also provide the Department of Taxation or the State Corporation Commission, as applicable, with credit recapture amounts and any other information it may require relating to the credit claimed by the taxpayer. The guidelines developed by the Board of Housing and Community Development pursuant to subsection F shall include guidelines for cases where a developer or investor has transferred any tax credit pursuant to this section.

H. Credits granted to a partnership, limited liability company or electing small business corporation (S corporation) shall be allocated among all partners or shareholders, respectively, either in proportion to their ownership interest in such entity or as the partners or shareholders mutually agree as provided in an executed document, the form of which shall be prescribed by the Board of Housing and Community Development.