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(1) As used in this section:
(a) "Allocation certificate" means a certificate in a form prescribed by the commission and issued by the Utah Housing Corporation to a housing sponsor that specifies the aggregate amount of the tax credit awarded under this section to a qualified development and includes:
(i) the aggregate annual amount of the tax credit awarded that may be claimed by one or more qualified taxpayers that have been issued a special low-income housing tax credit certificate; and
(ii) the credit period over which the tax credit may be claimed by one or more qualified taxpayers that have been issued a special low-income housing tax credit certificate.
(b) "Building" means a qualified low-income building as defined in Section 42(c), Internal Revenue Code.
(c) "Credit period" means the "credit period" as defined in Section 42(f)(1), Internal Revenue Code.
(d)
(i) "Designated reporter" means, as selected by a housing sponsor, the housing sponsor itself or one of the housing sponsor's direct or indirect partners, members, or shareholders that will provide information to the Utah Housing Corporation regarding the assignment of tax credits under this section.
(ii) Before the Utah Housing Corporation may issue an allocation certificate to a housing sponsor, a housing sponsor shall provide the identity of the housing sponsor's designated reporter to the Utah Housing Corporation.
(iii) Before the Utah Housing Corporation may issue a special low-income housing tax credit certificate to a qualified taxpayer, a designated reporter shall provide the information described in Subsection (6) to the Utah Housing Corporation.
(e) "Federal low-income housing tax credit" means the federal tax credit described in Section 42, Internal Revenue Code.
(f) "Housing sponsor" means an entity that owns a qualified development.
(g) "Qualified allocation plan" means a qualified allocation plan adopted by the Utah Housing Corporation in accordance with Section 42(m), Internal Revenue Code.
(h) "Qualified development" means a "qualified low-income housing project":
(i) as defined in Section 42(g)(1), Internal Revenue Code; and
(ii) that is located in the state.
(i)
(i) "Qualified taxpayer" means a person that:
(A) owns a direct or indirect interest in a qualified development; and
(B) meets the requirements to claim a tax credit under this section.
(ii) If a housing sponsor is a partnership, limited liability company, or S corporation, a "qualified taxpayer" may include any partner, member, or shareholder of the housing sponsor as determined by the governing documents of the housing sponsor.
(j)
(i) "Special low-income housing tax credit certificate" means a certificate:
(A) in a form prescribed by the commission;
(B) that the Utah Housing Corporation issues to a qualified taxpayer for a taxable year in accordance with this section; and
(C) that specifies the amount of the tax credit a qualified taxpayer may claim under this section.
(ii) The Utah Housing Corporation may only issue one or more special low-income housing tax credit certificates if the aggregate specified amount on all special low-income housing tax credit certificates issued in relation to a qualified development does not exceed the aggregate amount of tax credit awarded to the qualified development and issued to a housing sponsor in an allocation certificate.
(2)
(a) For taxable years beginning on or after January 1, 1995, a qualified taxpayer who has been issued a special low-income housing tax credit certificate by the Utah Housing Corporation may claim a nonrefundable tax credit against taxes otherwise due under this chapter, Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter 9, Taxation of Admitted Insurers.
(b) The tax credit shall be in an amount equal to the tax credit amount specified on the special low-income housing tax credit certificate that the Utah Housing Corporation issues to a qualified taxpayer under this section.
(c)
(i) For a calendar year beginning on or before December 31, 2016, the aggregate annual tax credit that the Utah Housing Corporation may allocate for the credit period described in Section 42(f), Internal Revenue Code, pursuant to this section and Section 59-10-1010 is an amount equal to the product of:
(A) 12.5 cents; and
(B) the population of Utah.
(ii) For a calendar year beginning on or after January 1, 2017, the aggregate annual tax credit that the Utah Housing Corporation may allocate for the credit period described in Section 42(f), Internal Revenue Code, pursuant to this section and Section 59-10-1010 is an amount equal to the product of:
(A) 34.5 cents; and
(B) the population of Utah.
(iii) For purposes of this section, the population of Utah shall be determined in accordance with Section 146(j), Internal Revenue Code.
(3)
(a) The Utah Housing Corporation shall determine criteria and procedures for allocating the tax credit under this section and Section 59-10-1010 and incorporate the criteria and procedures into the Utah Housing Corporation's qualified allocation plan.
(b) The Utah Housing Corporation shall create the criteria under Subsection (3)(a) based on:
(i) the number of affordable housing units to be created in Utah for low and moderate income persons in a qualified development;
(ii) the level of area median income being served by a qualified development;
(iii) the need for the tax credit for the economic feasibility of a qualified development; and
(iv) the extended period for which a qualified development commits to remain as affordable housing.
(4) Any housing sponsor may apply to the Utah Housing Corporation for a tax credit allocation under this section.
(5)
(a) The Utah Housing Corporation shall determine the amount of the tax credit to allocate to a qualified development in accordance with the qualified allocation plan of the Utah Housing Corporation.
(b)
(i) The Utah Housing Corporation shall issue an allocation certificate to a housing sponsor as evidence of the allocation.
(ii) The allocation certificate under Subsection (5)(b)(i) shall specify the amount of the tax credit allocated to a qualified development as determined by the Utah Housing Corporation.
(c) The amount of the tax credit specified in an allocation certificate may not exceed 100% of the federal low-income housing tax credit awarded to a qualified development.
(6) Before the Utah Housing Corporation may issue a special low-income housing tax credit certificate, a designated reporter shall provide to the Utah Housing Corporation in a form prescribed by the Utah Housing Corporation:
(a) a list of each qualified taxpayer that has been assigned a portion of the tax credit awarded in an allocation certificate;
(b) for each qualified taxpayer described in Subsection (6)(a), the amount of tax credit that has been assigned; and
(c) an aggregate list of the tax credit amount assigned related to a qualified development demonstrating that the aggregate annual amount of the tax credits assigned does not exceed the aggregate annual tax credit awarded in the allocation certificate.
(7) The Utah Housing Corporation shall provide a special low-income housing tax credit certificate to a qualified taxpayer if:
(a) a designated reporter has provided the information regarding the qualified taxpayer as described in Subsection (6); and
(b) the Utah Housing Corporation has verified that the aggregate tax credit amount assigned with respect to a qualified development does not exceed the total tax credit awarded in the allocation certificate.
(8)
(a) All elections made by a housing sponsor pursuant to Section 42, Internal Revenue Code, shall apply to this section.
(b)
(i) If a qualified development is required to recapture a portion of any federal low-income housing tax credit, then each qualified taxpayer shall also be required to recapture a portion of any state tax credits authorized by this section.
(ii) The state recapture amount shall be equal to the percentage of the state tax credit that equals the proportion the federal recapture amount bears to the original federal low-income housing tax credit amount subject to recapture.
(iii) The designated reporter shall identify each qualified taxpayer that is required to recapture a portion of any state tax credit as described in this Subsection (8)(b).
(9)
(a) Any tax credits returned to the Utah Housing Corporation in any year may be reallocated within the same time period as provided in Section 42, Internal Revenue Code.
(b) Tax credits that are unallocated by the Utah Housing Corporation in any year may be carried over for allocation in subsequent years.
(10)
(a) If a tax credit is not claimed by a qualified taxpayer in the year in which it is earned because the tax credit is more than the tax owed by the qualified taxpayer, the tax credit may be carried back three years or may be carried forward five years as a credit against the tax.
(b) Carryover tax credits under Subsection (10)(a) shall be applied against the tax:
(i) before the application of the tax credits earned in the current year; and
(ii) on a first-earned first-used basis.
(11)
(a) A qualified taxpayer may assign a special low-income housing tax credit certificate received under Subsection (7) to another person if the qualified taxpayer provides written notice to the Utah Housing Corporation, in a form established by the Utah Housing Corporation, that includes:
(i) the qualified taxpayer's written certification or other proof that the qualified taxpayer irrevocably elects not to claim the tax credit authorized by the special low-income housing tax credit certificate; and
(ii) contact information for the person to whom the special low-income housing tax credit certificate is to be assigned.
(b) If the qualified taxpayer meets the requirements of Subsection (11)(a), the Utah Housing Corporation shall issue an assigned special low-income housing tax credit certificate to the person identified by the qualified taxpayer for an amount equal to the qualified taxpayer's special low-income housing tax credit minus any state recapture amount under Subsection (8)(b).
(c) A person who is assigned a special low-income housing tax credit certificate in accordance with this Subsection (11) may claim the tax credit as if:
(i) the person had met the requirements of this section to claim the tax credit, if the person files a return under this chapter, Chapter 8, Gross Receipts Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, or Chapter 9, Taxation of Admitted Insurers; or
(ii) the person had met the requirements of Section 59-10-1010 to claim the tax credit under Section 59-10-1010, if the person files a return under Chapter 10, Individual Income Tax Act.
(12) Any tax credit taken in this section may be subject to an annual audit by the commission.
(13) The Utah Housing Corporation shall annually provide an electronic report to the Revenue and Taxation Interim Committee which shall include at least:
(a) the purpose and effectiveness of the tax credits; and
(b) the benefits of the tax credits to the state.
(14) The commission may, in consultation with the Utah Housing Corporation, make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement this section.