For income tax years commencing on or after January 1, 2017, but prior to January 1, 2021, the bill allows a taxpayer making a donation to an employer-assisted housing project located in a rural area a credit against the taxpayer's state income tax obligations.
The bill defines 'donation' to mean cash, securities, or real or personal property that is donated to a not-for-profit sponsor that is used solely for costs associated with an employer-assisted housing project located within the state.
The bill defines 'employer-assisted housing project' to mean down payment assistance, reduced-interest mortgages, mortgage guarantee programs, rental subsidies, or individual development account savings plans that are:
- Provided by an employer to employees to assist them in securing affordable housing near the workplace;
- Restricted to housing in geographic areas that are near such workplaces;
- Restricted to employees in households whose adjusted income is less than 120% of the median income of the geographic area of the household's employer-assisted housing project; and
- Restricted to housing that is located in a rural area of the state.
The bill specifies procedures by which a not-for-profit entity that is a sponsor of an employer-assisted housing project (sponsor) applies to either the Colorado housing and finance authority or a municipality or county finance authority for an award of a tax credit allowed under the bill. The bill also specifies procedures governing an agency's review of the application and the process by which the agency, if it approves the application, reserves tax credits for donations to the employer-assisted housing project. The amount of the tax credits reserved must be 50% of the approved amount of the donation or the actual donation, whichever is less.
The bill also specifies procedures by which the donation is documented and achieves proper certification.
For employer-assisted housing projects, the bill allows a sponsor to aggregate a number of donations from multiple employers into a single source of funds for use in assisting eligible employees to secure housing near their workplaces. The tax credits awarded may be divided among the donors of the individual donations as determined by the sponsor.
The bill specifies that the minimum amount of a donation is $10,000; except that individual donations in an aggregated donation may be less than that amount.
The bill requires each agency that has allocated tax credits to report to the general assembly on a periodic basis on the overall economic activity, usage, and impact to the state from the employer-assisted housing projects for which it has allocated tax credits.
(Note: This summary applies to this bill as introduced.)