234.45 Low-income housing tax credits.

(1) Definitions. In this section:

(a) “Allocation certificate” means a statement issued by the authority certifying that a qualified development is eligible for a state tax credit and specifying the amount of the credit that the owners of the qualified development may claim.

(b) “Compliance period” means the 15-year period beginning with the first taxable year of the credit period.

(c) “Credit period” means the period of 6 taxable years beginning with the taxable year in which a qualified development is placed in service. For purposes of this paragraph, if a qualified development consists of more than one building, the qualified development is placed in service in the taxable year in which the last building of the qualified development is placed in service.

(d) “Qualified allocation plan” means the qualified allocation plan adopted by the authority pursuant to section 42 (m) of the Internal Revenue Code.

(e) “Qualified development” means a qualified low-income housing project under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this state.

(f) “State tax credit” means a tax credit under s. 71.07 (8b), 71.28 (8b), 71.47 (8b), or 76.639.

(2) Establishment of program. The authority shall establish a program to certify persons to claim state tax credits under this section.

(3) Certification. The authority may certify a person to claim a state tax credit in an amount determined by the authority by issuing the person an allocation certificate for the qualified development that is eligible for the state tax credit. The allocation certificate shall state the amount the authority determines the person is eligible to claim for each year of the credit period. The authority may issue an allocation certificate under this subsection only if all of the following conditions are satisfied:

(a) The allocation certificate is issued to a person who has an ownership interest in the qualified development.

(b) The state tax credit is necessary for the financial feasibility of the qualified development.

(c) The qualified development is the subject of a recorded restrictive covenant requiring that, for the compliance period or for a longer period agreed to by the authority and the owner of the qualified development, the development shall be maintained and operated as a qualified development and shall be in compliance with Title VIII of the federal Civil Rights Act of 1968, as amended.

(d) The allocation certificate is issued in accordance with the authority's qualified allocation plan. If practicable, the authority shall begin issuing allocation certificates in conjunction with the authority's implementation of its 2018 qualified allocation plan as if the state tax credits were included in that plan.

(4) Allocation limits. In any calendar year, the aggregate amount of all state tax credits for which the authority certifies persons in allocation certificates issued under sub. (3) in that year may not exceed $42,000,000, including all amounts each person is eligible to claim for each year of the credit period, plus the total amount of all unallocated state tax credits from previous calendar years and plus the total amount of all previously allocated state tax credits that have been revoked or cancelled or otherwise recovered by the authority.

(5) Preference for smaller municipalities. In issuing allocation certificates under sub. (3), the authority shall give preference to qualified developments located in a city, village, or town with a population of fewer than 150,000.

(6) Report. No later than December 31 of each year, the authority shall submit a report to the legislature under s. 13.172 (2) that includes all of the following:

(a) A statement of the number of qualified developments for which the authority issued allocation certificates that year.

(b) A description of each qualified development for which the authority issued an allocation certificate that year, including the geographic location of the development, the household type and any specific demographic information available concerning the residents intended to be served by the development, the income levels of residents intended to be served by the development, and the rents or set-asides authorized for each development.

(c) An analysis of housing market and demographic information that shows how the qualified developments for which the authority has issued allocation certificates at any time are addressing the need for affordable housing within the communities those developments are intended to serve and an analysis of any remaining disparities in the affordability of housing within those communities.

(7) Policies and procedures. The authority, in consultation with the department of revenue, shall establish policies and procedures to administer this section. The policies and procedures established under this subsection shall, to the extent practicable, incorporate the authority's policies and procedures for awarding federal low-income housing credits under section 42 of the Internal Revenue Code. The authority shall issue allocation certificates annually, on a rolling basis, based on eligibility, as determined by the authority, except that the authority may develop a competitive process to award allocation certificates as a part of its qualified allocation plan.

History: 2017 a. 176.