SUBTITLE R. DISTRICT OF COLUMBIA LOW-INCOME HOUSING TAX CREDIT CLARIFICATION

(a) The table of contents is amended by striking the phrase "47-4806. Transfer, sale, or assignment" and inserting the phrase "47-4806. Transfer, sale, assignment, or allocation" in its place.

(b) Section 47-4801 is amended as follows:

(1) A new paragraph (1A) is added to read as follows:

" (1A) "Commissioner" means the Commissioner of the Department of Insurance, Securities, and Banking.".

(2) Paragraph (3) is amended by striking the phrase "cause the construction of affordable housing" and inserting the phrase "cause the acquisition, rehabilitation, or construction of affordable housing" in its place.

(3) Paragraph (6) is amended by striking the phrase ""Low-Income Housing Tax Credit Program" means the program authorized by section 42 of the Internal Revenue Code of 1986" and inserting the phrase ""Federal low-income housing tax credit" means a tax credit claimed pursuant to section 42 of the Internal Revenue Code of 1986" in its place.

(4) Paragraph (7) is repealed.

(5) Paragraph (8) is amended by striking the phrase "a rental housing development that receives an allocation of federal Low-Income Housing Tax Credits from the Department" and inserting the phrase "a rental housing development in the District that receives an allocation of federal low-income housing tax credits under section 42(h)(1) or (4) of the 1986 Internal Revenue Code (26 U.S.C. § 42(h)(1) or (4)) after October 1, 2021, and receives an executed extended low-income housing commitment pursuant to section 42(h)(6)(B) of the 1986 Internal Revenue Code (26 U.S.C. § 42(h)(6)(B)) from the Department dated on or after October 1, 2021".

(c) Section 47-4802 is amended as follows:

(1) Subsection (a) is amended to read as follows:

" (a) There is established a District of Columbia low-income housing tax credit.".

(2) Subsection (b) is repealed.

(3) Subsection (c) is repealed.

(4) Subsection (d) is amended by striking the phrase "tax credit award" and inserting the phrase "tax credit" in its place.

(d) Section 47-4803 is amended as follows:

(1) Subsection (a) is amended to read as follow:

" (a) An owner of a qualified project may receive a District of Columbia low-income housing tax credit with respect to that qualified project in an amount equal to 25% of the value of the federal low-income housing tax credit received with respect to the qualified project.".

(2) Subsection (b) is amended to read as follows:

" (b) (1) If the owner of a qualified project transfers, sells, or assigns a District of Columbia low-income housing tax credit to another taxpayer, pursuant to § 47-4806 , the District of Columbia low-income housing tax credit shall not be taken, pursuant to subsection (c) of this section, against taxes imposed under this title unless the owner has filed with the Department, in a form determined by the Department, an affidavit certifying that:

" (A) The owner of the qualified project received, as consideration for transferring, selling, or assigning the District of Columbia low-income housing tax credit, at least 80% of the per dollar sale price for a federal low-income housing tax credit associated with the qualified project that the owner has transferred, sold, or assigned; and

" (B) The value received by the owner of the qualified project was used to ensure financial feasibility of the qualified project.

" (2) The Department shall deliver to the Chief Financial Officer and the Commissioner an annual report certifying the ongoing eligibility of an eligible project to receive federal low-income housing tax credits.".

(3) Subsection (c) is amended to read as follows:

" (c) (1) The District of Columbia low-income housing tax credit may be claimed against taxes imposed under Chapter 18 of this title or § 47-2608(a)(1) .

" (2) The District of Columbia low-income housing tax credit may be claimed equally for 10 years, subtracted from the tax otherwise due for each taxable period and shall not be refundable; provided, that the credit may not be taken against any tax that is dedicated in whole or in part to the Healthy DC and Heath Care Expansion Fund established by § 31-3514.02 . ".

" (3) If the District of Columbia low-income housing tax credit is claimed against taxes imposed under Chapter 18 of this title , any amount of the low-income housing tax credit that exceeds the tax due for a taxable year may be carried forward to any of the 10 remaining subsequent taxable years for taxes imposed under Chapter 18 of this title . If the District of Columbia low-income housing tax credit is claimed against taxes imposed under § 47-2608(a)(1) , any amount of the credit that exceeds the tax due for a taxable year may be carried forward to any of the 10 remaining subsequent taxable years for taxes imposed under § 47-2608(a)(1) .".

(4) Subsection (d)(1) is amended by striking the phrase "allocated to parties who are eligible under the provisions of subsection (a) of this section" and inserting the phrase "transferred, sold, assigned, or allocated to parties who are eligible pursuant to Chapter 48 of Title 47 of the District of Columbia Official Code" in its place.

(5) Subsection (e) is amended as follows:

(A) The lead-in language is amended by striking the phrase "submitted to the Chief Financial Officer as provided in this section" and inserting the phrase "submitted to the Chief Financial Officer and the Commissioner as provided in this section" in its place.

(B) Paragraph (2) is amended by striking the phrase "each taxpayer subject to the recapture" and inserting the phrase "each transferee, purchaser, assignee, or party to whom a credit is allocated" in its place.

(C) Paragraph (3) is amended by striking the phrase "allocated to such taxpayer" and inserting the phrase "allocated to such transferee, purchaser, assignee, or party to whom a credit is allocated" in its place.

(6) Subsection (f)(1) is amended by striking the phrase "A tax credit allowed under this section shall not be denied to the taxpayer with respect to any qualified project" and inserting the phrase "A District of Columbia low-income housing tax credit allowed under this section shall not be denied with respect to any qualified project" in its place.

(e) Section 47-4804 is amended as follows:

(1) Subsection (a) is amended to read as follows:

" (a) The owner of a qualified project eligible for the District of Columbia low-income housing tax credit shall submit a copy of the eligibility statement issued by the Department with respect to the qualified project at the time of filing the return required to be filed by the owner pursuant to § 47-1805.02 . In the case of failure to attach the eligibility statement, a credit under this section shall not be allowed with respect to such qualified project for that year until the copy is provided to the Chief Financial Officer and the Commissioner.".

(2) Subsection (b) is amended by striking the phrase "such qualified District of Columbia project shall also be recaptured" and inserting the phrase "such qualified District of Columbia project shall also be recaptured by the Office of Chief Financial Officer or Commissioner of Insurance, Securities, and Banking" in its place.

(f) Section 47-4805 is amended by striking the phrase "The Chief Financial Officer or the Department may require" and inserting the phrase "The Chief Financial Officer, the Commissioner, or the Department may require" in its place.

(g) Section 47-4806 is amended as follows:

(1) The section heading is amended by striking the phrase "Transfer, sale, or assignment" and inserting the phrase "Transfer, sale, assignment, or allocation" in its place.

(2) Subsection (a) is amended as follows:

(A) The existing text is designated as paragraph (1) and amended to read as follows:

" (1) All or any portion of credits issued in accordance with the provisions of this section may be transferred, sold, or assigned to another taxpayer. There is no limit on the total number of transactions for the transfer, sale, or assignment of all or part of the total credit authorized under this section. Collectively, all transfers, sales, assignments, and allocations pursuant to paragraph (2) of this subsection are subject to the maximum credit allowable to a particular qualified project.".

(B) A new paragraph (2) is added to read as follows:

" (2) A tax credit earned or purchased by, or transferred or assigned to, a partnership, limited liability company, S corporation, or other pass-through entity may be allocated to the partners, members, or shareholders of that entity in accordance with the provisions of any agreement among the partners, members, or shareholders and without regarding to the ownership interest of the partners, members, or shareholders in the qualified project. A partner, member, or shareholder to whom a tax credit is allocated may further allocate all or part of the allocated credit as provided in this subsection or may transfer, sell, or assign the allocated credit as provided in paragraph (1) of this subsection. There is no limit on the total number of allocations of all or part of the total credit authorized under this section; however, collectively, all transfers, sales, assignments, and allocations, made pursuant to this subsection, are subject to the maximum credit allowable to a particular qualified project.".

(3) Subsection (b) is amended to read as follows:

" (b) An owner, transferee, purchaser, assignee, or taxpayer to whom a tax credit is allocated pursuant to subsection (a)(2) of this section, desiring to make a transfer, sale, assignment, or allocation pursuant to subsection (a)(2) of this section, shall submit to the Chief Financial Officer and the Commissioner a statement that describes the amount of District of Columbia low-income housing tax credit for which such transfer, sale, assignment, or allocation of District of Columbia low-income housing tax credit is eligible. The owner, transferor, seller, assignor, or taxpayer who is allocating, pursuant to subsection (a)(2) of this section, the tax credit, as applicable, shall provide to the Chief Financial Officer and the Commissioner appropriate information so that the low-income housing tax credit can be properly allocated.".

(4) Subsection (c)(3) is amended to read as follows:

" (3) Amount of credit previously transferred, sold, assigned, or allocated to such transferee, purchaser, assignee, or taxpayer to whom a credit is allocated.".

(h) Section 47-4807 is amended as follows:

(1) Subsection (a) is amended by striking the phrase "The Department, in consultation with the Chief Financial Officer, shall monitor" and inserting the phrase "The Department, in consultation with the Chief Financial Officer and the Commissioner, shall monitor" in its place.

(2) Subsection (b) is amended by striking the phrase "The Department or the Chief Financial Officer shall report" and inserting the phrase "The Department, the Chief Financial Officer, or the Commissioner shall report" in its place.