Coalition Members and Friends:
This week will realize yet another deadline in the Oklahoma legislature – Thursday, March 10 is the Third Reading deadline to pass bills out of their house of origin. Anticipating this deadline, the Oklahoma Coalition for Affordable Housing is watching a number of bills that will be detrimental to the affordable housing industry as it relates to the state affordable housing tax credit.
HB 2818 (Denney)
This proposal reduces the amount computed on a variety of tax credits, including the affordable housing tax credit, by 25% for any tax year after January 1, 2017. Credits would only be reinstated to their full amount once the state’s general revenue fund has seen growth of more than 25%. This bill does allow an exception for credits carried over for tax years prior to January 1, 2017.
HB 2689 (Brumbaugh)
This proposal creates the Tax Credit Reduction Act. Effective January 1, 2017 through December 31, 2018, tax credits shall be reduced by 25% of the amount otherwise allowable. This bill further dictates that the Legislature, rather than the Incentive Review Commission, shall review the impact of the credit reduction in order to determine whether tax credits will be subject to reduction for tax years subsequent to 2018.
SB 916 (Mazzei)
After being amended in committee, this bill reduces the affordable tax credit from $4,000,000 annually to:
1. Two Million Dollars ($2,000,000.00) for projects placed in service before July 1, 2016;
2. One Million Five Hundred Thousand Dollars ($1,500,000.00) for projects placed into service on or after July 1, 2016, and before January 1, 2017;
3. Three Million Dollars ($3,000,000.00) for projects placed into service during any allocation year which begins on or after January 1, 2017.
SB 977 (Mazzei)
This proposal shifts the tax burden back onto the affordable housing industry by placing a two-year moratorium on the tax credit. This bill raises taxes on Oklahoma businesses by $278 million. It also eliminates the New Jobs Tax Credit and incentives for the rehabilitation of historic and older buildings, which is being used in communities across Oklahoma.
The Coalition opposes each of these bills.
Other tax credit bills we are watching: HB2690, SB919, SB1137, SB1376, SB1438.