HB357 Alabama 2023 Session

Summary

Primary Sponsor

Cynthia Lee AlmondAlabama Public Service Commission

Republican

Session

Regular Session 2023

Title

Relating to the state income tax; to establish the Alabama Workforce Housing Tax Credit Act; to create the Alabama Workforce Housing Tax Credit for qualified workforce housing projects; to define certain terms; to provide for minimum and maximum annual award amounts for qualified projects; to allow the tax credits to be claimed for 10 years against the income tax liability of a qualified taxpayer; to allow carryforward for earned but unused tax credits; to require a minimum of the annual award cycle cap be awarded for qualified projects located in areas designated as rural by the authority; and to require the Alabama Housing Finance Authority to implement and administer the provisions of this act.

Summary

HB357 would create the Alabama Workforce Housing Tax Credit Act, establishing a state tax credit to support qualified workforce housing projects in Alabama, administered by the Alabama Housing Finance Authority.

What This Bill Does

It authorizes a nonrefundable workforce housing tax credit for qualified taxpayers who own an interest in a qualified workforce housing project in Alabama, usable for 10 years against Alabama income tax. Each qualified project can receive between $200,000 and $2,000,000 per year, with unused credits carrying forward for up to five years, and eligibility determined by an official certificate from the Authority. At least 20-25% of the annual cap must go to rural projects, with the rest allocated to four-percent LIHTC projects; the total annual awards are limited by a cycle cap that includes a base amount, adjustments, and any recaptured credits. If federal LIHTC credits are recaptured or disallowed, a proportional recapture of the workforce credit is required, and credits are nonrefundable and can be allocated through pass-through entities; the program ends new credits for applications after September 30, 2026, and regulations are to be adopted by the Authority.

Who It Affects

• Qualified taxpayers and project owners: individuals or entities owning an interest in a qualified workforce housing project can receive a state tax credit (subject to per-year limits, carrying forward unused credits, and eligibility certification).
• Rural communities and four-percent LIHTC projects: at least 20-25% of the annual cap must be awarded to rural projects, with the remainder going to four-percent LIHTC projects, shaping where credits flow within the state.

Key Provisions

• Establishes the Alabama Workforce Housing Tax Credit Act and creates the Alabama Workforce Housing Tax Credit for qualified taxpayers owning an interest in a qualified workforce housing project in Alabama.
• Sets per-project annual credit limits from $200,000 to $2,000,000, nonrefundable, with a five-year carryforward for unused credits, and requires an eligibility certificate to authorize each year's credit.
• Allocates credits through an award cycle with a base cap of $15,000,000 per year (plus adjustments for prior cycle amounts and recaptured credits) and a 10-year credit period per project, consistent with federal LIHTC rules.
• Requires geographic allocation: 20-25% of the annual cap to rural projects and the remainder to four-percent LIHTC projects; credits may be allocated to pass-through entities and individuals as permitted by law.
• Provides recapture rules: if federal LIHTC credits are recaptured, a proportional recapture of the workforce housing credits is required, increasing the taxpayer's Alabama tax liability; credits are nonrefundable but may offset certain tax liabilities as allowed.
• Agency and regulatory framework: AHFA administers the program, may adopt regulations and qualification plans, and must coordinate with the Department of Commerce; credits are not available for new LIHTC applications after September 30, 2026; regulatory actions to implement the act must be completed by July 31, 2023.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Establishes the Alabama Workforce Housing Tax Credit Act; creates the Alabama Workforce Housing Tax Credit