HB346 Alabama 2024 Session

Summary

Primary Sponsor

Cynthia Lee AlmondAlabama Public Service Commission

Republican

Session

Regular Session 2024

Title

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

Summary

HB346 creates a state tax credit to encourage qualified owners to develop workforce housing in Alabama, with defined caps, a 10-year credit period, and rural set-asides, overseen by the Alabama Housing Finance Authority.

What This Bill Does

It authorizes a nonrefundable tax credit for eligible taxpayers owning interests in qualified workforce housing projects, up to $2,000,000 per project per year for 10 years, with unused credits carryable for five years. It establishes an annual award cycle cap of $5,000,000 and designates a rural set-aside of 20-25% of the cycle cap, prioritizing four percent qualified projects; it also bars new credits for projects applying for federal LIHTC after September 30, 2027. It directs AHFA to administer the program under a qualified allocation plan, including preferences tied to after-school care commitments, and it provides rules on transfer, recapture, and statutory reporting.

Who It Affects

• Qualified taxpayers owning an interest in a qualified workforce housing project (including pass-through entities and investors) who may claim credits against their Alabama tax liability, with credits lasting 10 years and transferable under certain conditions.
• Rural communities and developers pursuing workforce housing in areas designated as rural by the Alabama Housing Finance Authority, who receive a minimum share of credits and support aimed at economic development.

Key Provisions

• Establishes the Alabama Workforce Housing Tax Credit Act and defines key terms (qualified project, eligible taxpayer, award, credit period, etc.).
• Credit amount: up to $2,000,000 per project per year; 10-year credit period; nonrefundable; unused credits may be carried forward five years; credits may offset state taxes and have limited offset for financial institution excise tax.
• Award cycle framework: annual cap of $5,000,000; carryforward for unawarded funds; credits subject to recapture rules aligned with any federal LIHTC recapture; total credits issued in a cycle cannot exceed the cap.
• Eligibility: project must be a qualified low-income building in Alabama, placed in service on or after January 1, 2025, and eligible for federal LIHTC.
• Administration and allocation: AHFA administers the program under a qualified allocation plan; rural set-aside of 20-25% of the cycle cap; preference for four percent projects.
• Pass-through and transfer: credits may be allocated to partners, members, or shareholders; credits can be transferred before filing tax returns and used by the recipient.
• Recapture: if federal LIHTC is recaptured or disallowed, a corresponding portion of the workforce housing credits must also be recaptured and applied to the taxpayer's income tax liability.
• After-school care preference: allocation plan includes commitments to provide a free children’s activity center or subsidies for after-school care (K–8) with caps and reserves to fund these subsidies.
• Sunset and applicability: credits not available to projects applying for federal LIHTC after September 30, 2027; credits apply to tax years beginning on/after January 1, 2025; effective October 1, 2024.
• Regulatory and reporting: department and Department of Insurance may adopt rules; annual reporting requirements apply.

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

Subjects

Taxation & Revenue