41-3954. Affordable housing tax credit; limit; eligibility statement; rules; public hearings; annual report; definitions
(Rpld. 1/1/26)
A. The affordable housing tax credit is established. The department shall administer the credit as provided by this section.
B. On application, the department shall allocate tax credits under this section for projects in this state that qualify for the federal low-income housing tax credit under section 42 of the internal revenue code and that are placed in service, for purposes of the federal credit, from and after June 30, 2022, in an amount equal to at least fifty percent of the amount of the federal credit allowed in each taxable year during the federal credit period. The department shall allocate tax credits under this section according to the department's current qualified allocation plan adopted pursuant to section 42(m) of the internal revenue code.
C. The department shall prescribe forms, procedures and criteria for applying, evaluating and qualifying for the credit under this section. The department shall issue an eligibility statement for each qualified project that identifies the qualified project, the allocation year and the amount of the credits allocated to the project.
D. The department shall allocate a total of $4, 000, 000 of tax credits under this section in any calendar year according to the date of the allocation of the credit. An approved amount applies against the dollar limit for the year in which the application is submitted. If, at the end of the calendar year, an unused balance occurs under the dollar limit prescribed by this subsection, the balance shall be reallocated for the purposes of this subsection in the following year.
E. Any taxpayer that owns an interest in an investment in a qualified project that receives an eligibility statement from the department is allowed a tax credit under this section for taxable years beginning from and after December 31, 2021 if the taxpayer acquires the interest before filing a tax return claiming the tax credit. The taxpayer shall apply the credit against the taxpayer's insurance premium or income tax liability as provided by and subject to the procedures, terms and conditions prescribed by section 20-224.04, 43-1075 or 43-1163, as applicable.
F. A qualified project that is approved for the purposes of the credit under this section is not eligible for any abatement, exemption or other reduction in state or local ad valorem property taxes otherwise allowed by statute.
G. The Arizona department of housing, with the cooperation of the department of insurance and financial institutions and the department of revenue, shall adopt rules and publish and prescribe forms and procedures as necessary to administer this section, including criteria on which eligibility statements are issued under this section.
H. On or before July 30 of each year, the department shall hold a public hearing to solicit and accept public comments relating to the amount of the credit under this section to be used for qualified projects that are financed through tax-exempt bond issuance as part of the qualified allocation plan process and other affordable housing tax credit issues. The department shall post a copy of all comments submitted during each public hearing on the department's website before September 15 of the year in which the public hearing is held.
I. On or before December 31 of each year, the department shall submit to the president of the senate and the speaker of the house of representatives a report that addresses whether the credits approved under this section produced a significant number of additional affordable housing units in this state and that analyzes the economic impact of the credits approved under this section on this state. The department shall provide a copy of this report to the secretary of state.
J. For the purposes of this section:
1. " Internal revenue code" has the same meaning prescribed by section 43-105.
2. " Qualified project" means a qualified low-income building as defined in section 42(c)(2) of the internal revenue code.
3. " Taxpayer" means a person, firm or corporation that is subject to taxation under title 20 or under title 43, chapter 10 or 11.