Sec. 8-395. Tax credits for housing programs.
Sec. 8-395. Tax credits for housing programs. (a) As used in this section, (1)
"business firm" means any business entity authorized to do business in the state and
subject to the corporation business tax imposed under chapter 208, or any company
subject to a tax imposed under chapter 207, or any air carrier subject to the air carriers
tax imposed under chapter 209, or any railroad company subject to the railroad companies tax imposed under chapter 210, or any regulated telecommunications service, express, telegraph, cable, or community antenna television company subject to the regulated telecommunications service, express, telegraph, cable, and community antenna
television companies tax imposed under chapter 211, or any utility company subject to
the utility companies tax imposed under chapter 212, and (2) "nonprofit corporation"
means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor
statutes thereto, having as one of its purposes the construction, rehabilitation, ownership
or operation of housing and having articles of incorporation approved by the executive
director of the Connecticut Housing Finance Authority in accordance with regulations
adopted pursuant to section 8-79a or 8-84.
(b) The Commissioner of Revenue Services shall grant a credit against any tax due
under the provisions of chapter 207, 208, 209, 210, 211 or 212 in an amount equal to
the amount specified by the Connecticut Housing Finance Authority in any tax credit
voucher issued by said authority pursuant to subsection (c) of this section.
(c) The Connecticut Housing Finance Authority shall administer a system of tax
credit vouchers within the resources, requirements and purposes of this section, for
business firms making cash contributions to housing programs developed, sponsored
or managed by a nonprofit corporation, as defined in subsection (a) of this section, which
benefit low and moderate income persons or families which have been approved prior
to the date of any such cash contribution by the authority. Such vouchers may be used
as a credit against any of the taxes to which such business firm is subject and which are
enumerated in subsection (b) of this section. For income years commencing on or after
January 1, 1998, to be eligible for approval a housing program shall be scheduled for
completion not more than three years from the date of approval. Each program shall
submit to the authority quarterly progress reports and a final report upon completion,
in a manner and form prescribed by the authority. If a program fails to be completed
after three years, or at any time the authority determines that a program is unlikely to
be completed, the authority may reclaim any remaining funds contributed by business
firms and reallocate such funds to another eligible program.
(d) No business firm shall receive a credit pursuant to both this section and chapter
228a in relation to the same cash contribution.
(e) Nothing in this section shall be construed to prevent two or more business firms
from participating jointly in one or more programs under the provisions of this section.
Such joint programs shall be submitted, and acted upon, as a single program by the
business firms involved.
(f) No tax credit shall be granted to any business firm for any individual amount
contributed of less than two hundred fifty dollars.
(g) Any tax credit not used in the period during which the cash contribution was
made may be carried forward or backward for the five immediately succeeding or preceding income years until the full credit has been allowed.
(h) In no event shall the total amount of all tax credits allowed to all business firms
pursuant to the provisions of this section exceed ten million dollars in any one fiscal
year, provided, until November first of each year, two million dollars of the total amount
of all tax credits under this section shall be set aside for the Supportive Housing Pilots
Initiative or the Next Steps Initiative established pursuant to section 17a-485c and one
million dollars of the total amount of all tax credits under this section shall be set aside for
workforce housing, as defined by the Connecticut Housing Finance Authority through
written procedures adopted pursuant to subsection (k) of this section. On or after November first of each year, any unused portion of such tax credits shall become available for
any housing program eligible for tax credits pursuant to this section.
(i) No organization conducting a housing program or programs eligible for funding
with respect to which tax credits may be allowed under this section shall be allowed to
receive an aggregate amount of such funding for any such program or programs in excess
of five hundred thousand dollars for any fiscal year.
(j) Nothing in this section shall be construed to prevent a business firm from making
any cash contribution to a housing program to which tax credits may be applied which
cash contribution may result in the business firm having a limited equity interest in the
program.
(k) The Connecticut Housing Finance Authority, with the approval of the Commissioner of Revenue Services, shall adopt written procedures in accordance with section
1-121 to implement the provisions of this section. Such procedures shall include provisions for issuing tax credit vouchers for cash contributions to housing programs based
on a system of ranking housing programs. In establishing such ranking system, the
authority shall consider the following: (1) The readiness of the project to be built; (2)
use of the funds to build or rehabilitate a specific housing project or to capitalize a
revolving loan fund providing low-cost loans for housing construction, repair or rehabilitation to benefit persons of very low, low and moderate income; (3) the extent the project
will benefit families at or below twenty-five per cent of the area median income and
families with incomes between twenty-five per cent and fifty per cent of the area median
income, as defined by the United States Department of Housing and Urban Development; (4) evidence of the general administrative capability of the nonprofit corporation
to build or rehabilitate housing; (5) evidence that any funds received by the nonprofit
corporation for which a voucher was issued were used to accomplish the goals set forth
in the application; and (6) with respect to any income year commencing on or after
January 1, 1998: (A) Use of the funds to provide housing opportunities in urban areas
and the impact of such funds on neighborhood revitalization; and (B) the extent to which
tax credit funds are leveraged by other funds.
(l) Vouchers issued or reserved by the Department of Housing under the provisions
of this section prior to July 1, 1995, shall be valid on and after July 1, 1995, to the same
extent as they would be valid under the provisions of this section in effect on June
30, 1995.
(m) The credit which is sought by the business firm shall first be claimed on the
tax return for such business firm's income year during which the cash contribution to
which the tax credit voucher relates was paid.
(P.A. 87-377, S. 1, 5; P.A. 88-264, S. 1, 2; P.A. 90-195; May 25 Sp. Sess. P.A. 94-1, S. 12, 130; P.A. 95-250, S. 23,
42; 95-309, S. 4, 11, 12; P.A. 97-295, S. 13, 25; P.A. 98-262, S. 4, 22; P.A. 99-173, S. 33, 65; P.A. 00-170, S. 23, 42; June
Sp. Sess. P.A. 01-8, S. 6, 13; P.A. 06-186, S. 65.)
History: P.A. 87-377, S. 1 effective June 19, 1987, and applicable to income years of business firms commencing
January 1, 1988, and thereafter; P.A. 88-264 substituted commissioner of revenue services for commissioner of housing
and substituted contributions for charitable purposes in Subsec. (j), inserted new Subsec. (l) re contributions resulting in
an equity interest and redesignated existing Subsec. (l) as Subsec. (m), effective June 3, 1988, and applicable to income
years of business firms commencing on and after January 1, 1988; P.A. 90-195 amended Subsec. (m) to require regulations
establishing a ranking system of housing programs eligible for contributions that qualify for tax credit vouchers; May 25
Sp. Sess. P.A. 94-1 amended Subsecs. (a) and (b) by eliminating references to telecommunications service company tax
imposed under chapter 210a, effective July 1, 1994; P.A. 95-250 replaced Commissioner of Housing with the Connecticut
Housing Finance Authority and made technical changes; P.A. 95-309 added Subsec. (n) re validity of vouchers issued
before July 1, 1995, and Subsec. (o) requiring the authority to adopt written procedures by October 1, 1995, effective July
1, 1995, and changed effective date of P.A. 95-250, Sec. 23 from October 1, 1995, to July 1, 1995; P.A. 97-295 amended
Subsec. (c) to add new eligibility criteria for income years commencing on or after January 1, 1998, added Subsec. (m)(6)
and (7) for income years commencing on or after January 1, 1998, added new Subsec. (p) re year in which credit may be
claimed, and made technical changes in Subsecs. (a), (b), (h) and (m), effective July 8, 1997, and applicable to tax returns
filed for income years of corporations under Ch. 208 and of air carriers under Ch. 209 commencing on or after January 1,
1997, calendar years of insurance companies under Ch. 207, railroad companies under Ch. 210 and express, telegraph,
cable and community antenna television system companies under Ch. 211 commencing on or after January 1, 1997, and
calendar quarters of utility companies under Ch. 212 commencing on or after January 1, 1997; P.A. 98-262 revised effective
date of P.A. 97-295 but without affecting this section; P.A. 99-173 amended Subsec. (f) to increase the credit cap per
business from $50,000 to $75,000, Subsec. (i) to increase the cap for the total amount allowed as a credit from $1,000,000
to $5,000,000 and Subsec. (k) to increase the amount an entity can receive in the aggregate from $300,000 to $400,000,
effective June 23, 1999, and applicable to income years commencing on or after January 1, 1999; P.A. 00-170 amended
Subsec. (a) to define "nonprofit corporation", amended Subsecs. (c), (d), (g), (j), and (m) to require eligible contributions
to be in cash, amended Subsec. (f) to remove a per-business cap on credits under this section, deleted former Subsec. (g)
re a restriction on eligibility under this section for banks and similar institutions, deleted former Subsec. (j) re a requirement
for amounts contributed to be same or greater than the year previous, deleted former Subsec. (o) re adoption of procedures
by the authority, and relettered the remaining Subsecs. accordingly, effective May 26, 2000, and applicable to income
years commencing on and after January 1, 2000; June Sp. Sess. P.A. 01-8 amended Subsec. (h) by adding provisions re
set aside of tax credits for the Supportive Housing Pilots Initiative, effective July 1, 2001 (Revisor's note: In Subsec. (h),
"Pilot" was changed editorially by the Revisors to "Pilots" for accuracy and consistency with Sec. 17a-485c); P.A. 06-186 amended Subsec. (h) to increase total amount of tax credits from $5,000,000 to $10,000,000, to add the Next Steps
Initiative and reserve $2,000,000, rather than $1,000,000, for that or the Supportive Housing Pilots Initiative, and to reserve
$1,000,000 for workforce housing, and amended Subsec. (i) to increase limit per organization from $400,000 to $500,000,
effective July 1, 2006.