Connecticut General Statutes 8-395a – (Note: This section is effective June 1, 2024.) Workforce housing opportunity development projects
(a) As used in this section:
Terms Used In Connecticut General Statutes 8-395a
- another: may extend and be applied to communities, companies, corporations, public or private, limited liability companies, societies and associations. See Connecticut General Statutes 1-1
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- intellectual disability: means a significant limitation in intellectual functioning existing concurrently with deficits in adaptive behavior that originated during the developmental period before eighteen years of age. See Connecticut General Statutes 1-1g
- legislative body: means : (1) As applied to unconsolidated towns, the town meeting. See Connecticut General Statutes 1-1
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- succeeding: when used by way of reference to any section or sections, mean the section or sections next preceding, next following or next succeeding, unless some other section is expressly designated in such reference. See Connecticut General Statutes 1-1
(1) “Commissioner” means the Commissioner of Housing.
(2) “Eligible workforce housing opportunity development project” or “project” means a project for the construction or substantial rehabilitation of rental housing (A) located within an opportunity zone in this state, (B) designated under subsection (e) of this section for certain professions that work within the municipality in which the project is located and for very low income families and individuals, and (C) that may incorporate renewable energy technology and be transit-oriented.
(3) “Substantial rehabilitation” means either (A) the costs of any repair, replacement or improvement to a building that exceeds twenty-five per cent of the value of such building after the completion of all such repairs, replacements or improvements, or (B) the replacement of two or more of the following: (i) Roof structures, (ii) ceilings, (iii) wall or floor structures, (iv) foundations, (v) plumbing systems, (vi) heating and air conditioning systems, or (vii) electrical systems.
(4) “Opportunity zone” means an area designated as a qualified opportunity zone pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to time.
(5) “Eligible developer” or “developer” means (A) a nonprofit corporation; (B) any business corporation incorporated pursuant to chapter 601, (i) that has as one of its purposes the construction, rehabilitation, ownership or operation of housing, and (ii) either certified under this section or that has articles of incorporation approved by the commissioner in accordance with regulations adopted pursuant to section 8-79a or 8-84; (C) any partnership, limited partnership, limited liability partnership, joint venture, trust, limited liability company or association, (i) that has as one of its purposes the construction, rehabilitation, ownership or operation of housing, and (ii) either certified under this section or that has basic documents of organization approved by the commissioner in accordance with regulations adopted pursuant to section 8-79a or 8-84; (D) a housing authority; or (E) a municipal developer.
(6) “Authority” or “housing authority” means any of the public corporations created by section 8-40, and the Connecticut Housing Authority when exercising the rights, powers, duties or privileges of, or subject to the immunities or limitations of, housing authorities pursuant to section 8-121.
(7) “Nonprofit corporation” means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto, that has as one of its purposes the construction, rehabilitation, ownership or operation of housing and that has articles of incorporation approved by the Commissioner of Housing in accordance with regulations adopted pursuant to section 8-79a or 8-84 or that is certified under this section.
(8) “Municipal developer” means a municipality that has not declared by resolution a need for a housing authority pursuant to section 8-40, acting by and through its legislative body. “Municipal developer” means the board of selectmen if such board is authorized to act as the municipal developer by the town meeting or representative town meeting.
(9) “Very low income families and individuals” means families or individuals whose income is thirty per cent or less of the area median income.
(10) “Market rate” means the rental income that such property would most probably command on the open market as indicated by current rentals in the opportunity zone being paid for comparable space.
(b) There is established a workforce housing opportunity development program to be administered by the Department of Housing under which individuals or entities who make cash contributions to an eligible developer for an eligible workforce housing opportunity development project located in a federally designated opportunity zone may be allowed a credit against the tax due under chapter 208 or 229 in an amount equal to the amount specified by the commissioner under this section. Any developer of a workforce housing opportunity development project shall be allowed an exemption from any fees under section 29-263 and any eligible workforce housing opportunity development project shall be assessed using the capitalization of net income method under subsection (b) of section 12-63b.
(c) The Commissioner of Housing shall determine eligibility criteria for such program and establish an application process for the program. The Department of Housing shall commence accepting applications for such program not later than January 1, 2025. A developer may apply to the Department of Housing for certification as a developer qualified to receive cash investments eligible for a tax credit pursuant to this section in a manner and form prescribed by the commissioner. To the extent feasible, any eligible workforce housing opportunity development project shall incorporate renewable energy or other technology in order to lower utility costs for the tenants and be transit-oriented. Any eligible workforce housing opportunity development project once constructed or substantially rehabilitated shall be rented as follows: (1) Forty per cent of the units shall be rented at the market rate, (2) fifty per cent of the units shall be rented to the workforce population designated under subsection (e) of this section, where such unit is rented to a member of such workforce population whose income is not more than sixty per cent of the area median income, and (3) ten per cent of the units shall be rented to families or individuals of very low income receiving rental assistance under chapter 128 or 319uu or 42 USC 1437f, as amended from time to time. The program shall provide for a method of selecting persons satisfying such income criteria to rent such units of housing from among a pool of applicants, which method shall not discriminate on the basis of race, creed, color, national origin, ancestry, sex, gender identity or expression, age or physical or intellectual disability.
(d) A workforce housing opportunity development project shall be scheduled for completion not more than three years after the date of approval by the Department of Housing. Each developer of a workforce housing opportunity development project shall submit to the commissioner quarterly progress reports and a final report upon completion, in a manner and form prescribed by the commissioner. If a workforce housing opportunity development project fails to be completed on or before three years from the date of approval of such project, or at any time the commissioner determines that a project is unlikely to be completed, the commissioner may request the Attorney General to reclaim any remaining funds contributed to the project by individuals or entities under subsection (b) of this section and, upon receipt of any such remaining funds, the commissioner shall reallocate such funds to another eligible project.
(e) The developer shall obtain the approval of the zoning commission, as defined in section 8-13m, of the municipality and of any other applicable municipal agency for the proposed workforce housing opportunity development project. After all such approvals are granted, the municipality may, not later than thirty days after such approval, by vote of its legislative body or, in a municipality where the legislative body is a town meeting, by vote of the board of selectmen, designate the workforce population that forty per cent of the project shall be dedicated to. Such designation may include volunteer firefighters, teachers, police officers, emergency medical personnel or other professions of persons working in the municipality. If the municipality does not vote within such time period, the developer shall designate the workforce population.
(f) For taxable income years commencing on or after January 1, 2025, the Commissioner of Revenue Services shall grant a credit against the tax imposed under chapter 208 or 229, other than the liability imposed by section 12-707, in an amount equal to the amount specified by the Commissioner of Housing in a tax credit voucher issued by the Commissioner of Housing pursuant to subsection (g) of this section.
(g) (1) The Commissioner of Housing shall administer a system of tax credit vouchers within the resources, requirements and purposes of this section, for individuals and entities making cash contributions to an eligible developer for an eligible workforce housing opportunity development project. Such voucher may be used as a credit against the tax to which such individual or entity is subject under chapter 208 or 229, other than the liability imposed by section 12-707.
(2) In no event shall the total amount of all tax credits allowed to all individuals or entities pursuant to the provisions of this section exceed five million dollars in any one fiscal year.
(3) No tax credit shall be granted to any individual or entity for any individual amount contributed of less than two hundred fifty dollars.
(4) Any tax credit not used in the taxable income year during which the cash contribution was made may be carried forward or backward for the five immediately succeeding or preceding taxable or income years until the full credit has been allowed.
(5) If an entity claiming a credit under this section is an S corporation or an entity treated as a partnership for federal income tax purposes, the credit may be claimed by the entity’s shareholders or partners. If the entity is a single member limited liability company that is disregarded as an entity separate from its owner, the credit may be claimed by such limited liability company’s owner, provided such owner is subject to the tax imposed under chapter 208 or 229.
(h) The Commissioner of Housing shall adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this section, including, but not limited to, the conditions for certification of a developer applying for assistance under this section.