House Bill 0195e1
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HB 195, First Engrossed
1 A bill to be entitled
2 An act relating to housing; creating s.
3 196.1978, F.S.; providing that property used to
4 provide housing for certain persons under ch.
5 420, F.S., and owned by certain nonprofit
6 corporations is exempt from ad valorem
7 taxation; creating ss. 220.185 and 420.5093,
8 F.S.; creating the State Housing Tax Credit
9 Program; providing legislative findings and
10 policy; providing definitions; providing for a
11 credit against the corporate income tax in an
12 amount equal to a percentage of the eligible
13 basis of certain housing projects; providing a
14 limitation; providing for allocation of credits
15 and administration by the Florida Housing
16 Finance Corporation; providing for an annual
17 plan; providing application procedures;
18 providing that neither tax credits nor
19 financing generated thereby shall be considered
20 income for ad valorem tax purposes; providing
21 for recognition of certain income by the
22 property appraiser; amending s. 420.503, F.S.;
23 providing that certain projects shall qualify
24 as housing for the elderly for purposes of
25 certain loans under the State Apartment
26 Incentive Loan Program, and shall qualify as a
27 project targeted for the elderly in connection
28 with allocation of low-income housing tax
29 credits and with the HOME program under certain
30 conditions; amending s. 420.5087, F.S.;
31 directing the Florida Housing Finance
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HB 195, First Engrossed
1 Corporation to adopt rules for the equitable
2 distribution of certain unallocated funds under
3 the State Apartment Incentive Loan Program;
4 authorizing the corporation to waive a mortgage
5 limitation under said program for projects in
6 certain areas; providing an effective date.
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8 Be It Enacted by the Legislature of the State of Florida:
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10 Section 1. Section 196.1978, Florida Statutes, is
11 created to read:
12 196.1978 Low-income housing property
13 exemption.--Property used to provide housing pursuant to any
14 state housing program authorized under chapter 420 to
15 low-income or very-low-income persons as defined by s.
16 420.0004, which property is owned entirely by a nonprofit
17 corporation which is qualified as charitable under s.
18 501(c)(3) of the Internal Revenue Code and which complies with
19 Rev. Proc. 96-32, 1996-1 C.B. 717, shall be considered
20 property owned by an exempt entity and used for a charitable
21 purpose, and such property shall be exempt from ad valorem
22 taxation. All property identified in this section shall comply
23 with the criteria for determination of exempt status to be
24 applied by property appraisers on an annual basis as defined
25 in s. 196.195.
26 Section 2. Section 220.185, Florida Statutes, is
27 created to read:
28 220.185 State housing tax credit.--
29 (1) LEGISLATIVE FINDINGS.--The Legislature finds that:
30 (a) There exist within the urban areas of the state
31 conditions of blight evidenced by extensive deterioration of
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HB 195, First Engrossed
1 public and private facilities, abandonment of sound
2 structures, and high unemployment, and these conditions impede
3 the conservation and development of healthy, safe, and
4 economically viable communities.
5 (b) Deterioration of housing and industrial,
6 commercial, and public facilities contributes to the decline
7 of neighborhoods and communities and leads to the loss of
8 their historic character and the sense of community which this
9 inspires; reduces the value of property comprising the tax
10 base of local communities; discourages private investment; and
11 requires a disproportionate expenditure of public funds for
12 the social services, unemployment benefits, and police
13 protection required to combat the social and economic problems
14 found in urban communities.
15 (c) In order to ultimately restore social and economic
16 viability to urban areas, it is necessary to renovate or
17 construct new infrastructure and housing, including housing
18 specifically targeted for the elderly, and to specifically
19 provide mechanisms to attract and encourage private economic
20 activity.
21 (d) The various local governments and other
22 redevelopment organizations now undertaking physical
23 revitalization projects and new housing developments in urban
24 areas are limited by tightly constrained budgets and
25 inadequate resources.
26 (e) In order to significantly improve revitalization
27 efforts by local governments and community development
28 organizations and to retain as much of the historic character
29 of our communities as possible, it is necessary to provide
30 additional resources, and the participation of private
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HB 195, First Engrossed
1 enterprise in revitalization efforts is an effective means for
2 accomplishing that goal.
3 (2) POLICY AND PURPOSE.--It is the policy of this
4 state to encourage the participation of private corporations
5 in revitalization projects within urban areas. The purpose of
6 this section is to provide an incentive for such participation
7 by granting state corporate income tax credits to qualified
8 low-income housing projects, including housing specifically
9 designed for the elderly, and associated mixed-use projects.
10 The Legislature thus declares this a public purpose for which
11 public money may be borrowed, expended, loaned, and granted.
12 (3) DEFINITIONS.--As used in this section:
13 (a) "Credit period" means the period of 5 years
14 beginning with the year the project is completed.
15 (b) "Eligible basis" means the adjusted basis of the
16 housing portion of a qualified project as of the close of the
17 first taxable year of the credit period.
18 (c) "Adjusted basis" means the owner's adjusted basis
19 in the project, calculated in a manner consistent with the
20 calculation of basis under the Internal Revenue Code, taking
21 into account the adjusted basis of property of a character
22 subject to the allowance for depreciation used in common areas
23 or provided as comparable amenities to the entire project.
24 (d) "Designated project" means a qualified project
25 designated pursuant to s. 420.5093 to receive the tax credit
26 under this section.
27 (e) "Qualified project" means a project located in an
28 urban infill area, at least 50 percent of which, on a cost
29 basis, consists of a qualified low-income housing project
30 within the meaning of s. 42(g) of the Internal Revenue Code,
31 including such projects designed specifically for the elderly
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HB 195, First Engrossed
1 but excluding any income restrictions imposed pursuant to s.
2 42(g) of the Internal Revenue Code upon residents of the
3 project unless such restrictions are otherwise established by
4 the Florida Housing Finance Corporation pursuant to s.
5 420.5093, and the remainder of which constitutes commercial or
6 single-family residential development consistent with and
7 serving to complement the qualified low-income project.
8 (f) "Urban infill area" means an area designated for
9 urban infill as defined by s. 163.3164.
10 (4) AUTHORIZATION TO GRANT STATE HOUSING TAX CREDITS;
11 LIMITATION.--
12 (a) There shall be allowed a credit of 9 percent of
13 the eligible basis of any designated project for each year of
14 the credit period against any tax due for a taxable year under
15 this chapter.
16 (b) The total amount of tax credits allocated for all
17 projects shall not exceed the amount appropriated for the
18 State Housing Tax Credit Program in the General Appropriations
19 Act. The total tax credits allocated is defined as the total
20 credits pledged over a 5-year period for all projects.
21 (c) The tax credit shall be allocated among designated
22 projects by the Florida Housing Finance Corporation as
23 provided in s. 420.5093.
24 (d) Each designated project must comply with the
25 applicable provisions of s. 42 of the Internal Revenue Code
26 with respect to the multifamily residential rental housing
27 element of the project, including specifically the provisions
28 of s. 42(h)(6).
29 (e) A tax credit shall be allocated to a designated
30 project and shall not be subject to transfer by the recipient
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HB 195, First Engrossed
1 unless the transferee is also an owner of the designated
2 project.
3 Section 3. Section 420.5093, Florida Statutes, is
4 created to read:
5 420.5093 State Housing Tax Credit Program.--
6 (1) There is created the State Housing Tax Credit
7 Program for the purposes of stimulating creative private
8 sector initiatives to increase the supply of affordable
9 housing in urban areas, including specifically housing for the
10 elderly, and to provide associated commercial facilities
11 associated with such housing facilities.
12 (2) The Florida Housing Finance Corporation shall
13 determine those qualified projects which shall be considered
14 designated projects under s. 220.185 and eligible for the
15 corporate tax credit under that section. The corporation shall
16 establish procedures necessary for proper allocation and
17 distribution of state housing tax credits, including the
18 establishment of criteria for any single-family or commercial
19 component of a project, and may exercise all powers necessary
20 to administer the allocation of such credits. The board of
21 directors of the corporation shall administer the allocation
22 procedures and determine allocations on behalf of the
23 corporation. The corporation shall prepare an annual plan,
24 which must be approved by the Governor, containing general
25 guidelines for the allocation and distribution of credits to
26 designated projects.
27 (3) The corporation shall adopt allocation procedures
28 that will ensure the maximum use of available tax credits in
29 order to encourage development of low-income housing and
30 associated mixed-use projects in urban areas, taking into
31 consideration the timeliness of the application, the location
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HB 195, First Engrossed
1 of the proposed project, the relative need in the area of
2 revitalization and low-income housing and the availability of
3 such housing, the economic feasibility of the project, and the
4 ability of the applicant to proceed to completion of the
5 project in the calendar year for which the credit is sought.
6 (4)(a) A taxpayer who wishes to participate in the
7 State Housing Tax Credit Program must submit an application
8 for tax credit to the corporation. The application shall
9 identify the project and its location and include evidence
10 that the project is a qualified project as defined in s.
11 220.185. The corporation may request any information from an
12 applicant necessary to enable the corporation to make tax
13 credit allocations according to the guidelines set forth in
14 subsection (3).
15 (b) The corporation's approval of an applicant as a
16 designated project shall be in writing and shall include a
17 statement of the maximum credit allowable to the applicant. A
18 copy of this approval shall be transmitted to the executive
19 director of the Department of Revenue, who shall apply the tax
20 credit to the tax liability of the applicant.
21 (5) For purposes of implementing this program and
22 assessing the property for ad valorem taxation under s.
23 193.011, neither the tax credits nor financing generated by
24 tax credits shall be considered as income to the property, and
25 the rental income from rent-restricted units in a state
26 housing tax credit development shall be recognized by the
27 property appraiser.
28 (6) The corporation is authorized to expend fees
29 received in conjunction with the allocation of state housing
30 tax credits only for the purpose of administration of the
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HB 195, First Engrossed
1 program, including private legal services which relate to
2 interpretation of s. 42 of the Internal Revenue Code.
3 Section 4. Subsection (19) of section 420.503, Florida
4 Statutes, 1998 Supplement, is amended to read:
5 420.503 Definitions.--As used in this part, the term:
6 (19) "Housing for the elderly" means, for purposes of
7 s. 420.5087(3)(c)2., any nonprofit housing community that is
8 financed by a mortgage loan made or insured by the United
9 States Department of Housing and Urban Development under s.
10 202, s. 202 with a s. 8 subsidy, s. 221(d)(3) or (4), or s.
11 236 of the National Housing Act, as amended, and that is
12 subject to income limitations established by the United States
13 Department of Housing and Urban Development, or any program
14 funded by the Rural Development Agency of the United States
15 Department of Agriculture and subject to income limitations
16 established by the United States Department of Agriculture. A
17 project which qualifies for an exemption under the Fair
18 Housing Act as housing for older persons as defined by s.
19 760.29(4) shall qualify as housing for the elderly for
20 purposes of s. 420.5087(3)(c)2. In addition, if the
21 corporation adopts a qualified allocation plan pursuant to s.
22 42(m)(1)(B) of the Internal Revenue Code or any other rules
23 that prioritize projects targeting the elderly for purposes of
24 allocating tax credits pursuant to s. 420.5099 or for purposes
25 of the HOME program under s. 420.5089, a project which
26 qualifies for an exemption under the Fair Housing Act as
27 housing for older persons as defined by s. 760.29(4) shall
28 qualify as a project targeted for the elderly, if the project
29 satisfies the other requirements set forth in this part.
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HB 195, First Engrossed
1 Section 5. Subsections (1) and (5) of section
2 420.5087, Florida Statutes, 1998 Supplement, are amended to
3 read:
4 420.5087 State Apartment Incentive Loan
5 Program.--There is hereby created the State Apartment
6 Incentive Loan Program for the purpose of providing first,
7 second, or other subordinated mortgage loans or loan
8 guarantees to sponsors, including for-profit, nonprofit, and
9 public entities, to provide housing affordable to
10 very-low-income persons.
11 (1) Program funds shall be distributed over successive
12 3-year periods in a manner that meets the need and demand for
13 very-low-income housing throughout the state. That need and
14 demand must be determined by using the most recent statewide
15 low-income rental housing market studies available at the
16 beginning of each 3-year period. However, at least 10 percent
17 of the program funds distributed during a 3-year period must
18 be allocated to each of the following categories of counties,
19 as determined by using the population statistics published in
20 the most recent edition of the Florida Statistical Abstract:
21 (a) Counties that have a population of more than
22 500,000 people;
23 (b) Counties that have a population between 100,000
24 and 500,000 people; and
25 (c) Counties that have a population of 100,000 or
26 less.
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28 Any increase in funding required to reach the 10-percent
29 minimum shall be taken from the county category that has the
30 largest allocation. The corporation shall adopt rules which
31 establish an equitable process for distributing any portion of
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HB 195, First Engrossed
1 the 10 percent of program funds allocated to the county
2 categories specified in this subsection which remains
3 unallocated at the end of a 3-year period. Counties that have
4 a population of 100,000 or less shall be given preference
5 under these rules.
6 (5) The amount of the mortgage provided under this
7 program combined with any other mortgage in a superior
8 position shall be less than the value of the project without
9 the housing set-aside required by subsection (2). However, the
10 corporation may waive this requirement for projects in rural
11 areas or urban infill areas which have market rate rents that
12 are less than the allowable rents pursuant to applicable state
13 and federal guidelines. In no event shall the mortgage
14 provided under this program combined with any other mortgage
15 in a superior position exceed total project cost.
16 Section 6. This act shall take effect July 1, 1999.
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