AN ACT relating to the Kentucky Affordable Housing Act.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
âSECTION 1.   A NEW SECTION OF KRS CHAPTER 198A IS CREATED TO READ AS FOLLOWS:
(1)	As used in this section:
(a)	"Department" means the Department of Revenue;
(b)	"Eligibility statement" means the statement issued by the corporation to the owner of a qualified project certifying:
1.	That a qualified low-income building is a qualified project; and
2.	The amount of Kentucky affordable housing credit that may be claimed for each year for that qualified project;
(c)	"Federal low-income housing tax credit" means the federal tax credit under 26 U.S.C. sec. 42;
(d)	"Kentucky affordable housing credit" means a nonrefundable Kentucky tax credit, under this section;
(e)	"Qualified low-income building" has the same meaning as in 26 U.S.C. sec. 42(c);
(f)	"Qualified project" means a qualified low-income building located within the Commonwealth which qualifies for the federal low-income housing tax credit and the Kentucky affordable housing credit. A qualified project may include but not be limited to:
1.	Housing for older persons, as defined in 42 U.S.C. sec. 3607;
2.	Workforce housing that:
a.	Is defined by the corporation in its qualified allocation plan prepared as required by 26 U.S.C. sec. 42(m)(1); and
b.	Facilitates the creation of housing in areas where economic development and job creation could be inhibited by limitations in the availability of affordable housing; or
3.	Supportive housing projects that:
a.	Provide youths between eighteen (18) and twenty-one (21) years of age who are transitioning out of foster care with daily living skills and services access;
b.	Use a recovery program model that includes peer support, daily living skills classes, and job responsibilities to establish new behaviors for individuals recovering from substance abuse;
c.	Provide veterans with housing stability and peer support; or
d.	Allow home health care services to be provided to tenants;
(g)	"Qualified taxpayer" means a taxpayer owning an interest, direct or indirect, in a qualified project prior to filing a tax return claiming a Kentucky affordable housing credit;
(h)	"Taxable year" has the same meaning as in KRS 141.010; and
(i)	"Taxpayer" has the same meaning as in KRS 131.010.
(2)	(a)	1.	Beginning on or after January 1, 2022, the corporation shall approve Kentucky affordable housing credit applications for a period of five (5) consecutive years.
2.	The five (5) year period shall commence with the first year that the corporation approves Kentucky affordable housing credits pursuant to its qualified allocation plan.
(b)	For each year Kentucky affordable housing credits are included in its qualified allocation plan, the corporation may approve an aggregate amount of Kentucky affordable housing credits equal to twelve million five hundred thousand dollars ($12,500,000).
(c)	The Kentucky affordable housing credit issued to a qualified project shall:
1.	Be claimed over the same ten (10) year credit period as the federal low-income housing tax credit, except that there shall be no reduction in the tax credit allowable in the first year of the credit period due to the calculation in 26 U.S.C. 42(f)(2);
2.	Be claimed beginning with the taxable year in which the last building of a qualified project is placed in service; and
3.	Only apply if:
a.	The qualified low-income building is a qualified project as of the close of the first year of the credit period; and
b.	The qualified project is placed in service on or after January 1, 2025.
(d)	1.	If the owner of the qualified project is a pass-through entity, as defined in KRS 141.010, the Kentucky affordable housing credit may be allocated to the partners, members, or shareholders of the entity in any manner agreed to in writing by the partners, members, or shareholders, regardless of whether any person is deemed a partner for federal income tax purposes.
2.	If the partner, member, or shareholder to which the Kentucky affordable housing credit is allocated is also a pass-through entity, the credit shall continue to pass through each level of the multiple-tiered pass-through entity to the ultimate qualified taxpayer which shall claim the credit. 
3.	For purposes of this paragraph:
a.	"Member" has the same meaning as in KRS 275.015; and
b.	"Partner" has the same meaning as in KRS 362.401.
(e)	The corporation shall not issue to any qualified project a combined amount of federal low-income housing tax credit and Kentucky affordable housing credit that exceeds the amount necessary to make the project financially feasible as required by 26 U.S.C. sec. 42(m)(2).
(3)	(a)	An owner of a project seeking the Kentucky affordable housing credit shall file an application with the corporation on a form prescribed by the corporation.
(b)	The application shall contain sufficient information for the corporation to determine that the project is eligible for the Kentucky affordable housing credit.
(4)	For taxable years or periods beginning on or after January 1, 2025, a qualified taxpayer shall be allowed a nonrefundable Kentucky affordable housing credit against:
(a)	1.	The income taxes imposed by KRS 141.020 or 141.040; and
2.	The limited liability tax imposed by KRS 141.0401;
	with the ordering of the credits as provided in Section 3 of this Act; or
(b)	1.	The insurance premium taxes imposed by KRS 136.330, 136.340, 136.350, 136.360, 136.370, and 136.390; and
2.	The retaliatory tax imposed by KRS 304.3-270;
	with the ordering of the credits as provided in Section 5 of this Act.
(5)	(a)	The corporation shall issue an eligibility statement to the owner of the qualified project upon the corporation's approval of a final cost certification that complies with the corporation's requirements.
(b)	The eligibility statement shall state:
1.	The name and address of the owner of the qualified project;
2.	The tax identification number of the owner of the qualified project;
3.	The amount of the Kentucky affordable housing credit allocated to the qualified project for each year of the credit period; and
4.	Any other information necessary for the department to efficiently process a tax return claiming the Kentucky affordable housing credit.
(c)	The corporation shall transmit all information from the eligibility statement to the department for processing returns claiming the Kentucky affordable housing credit.
(6)	The purposes of the Kentucky affordable housing credit include:
(a) To encourage a greater amount of private investment in affordable housing in the Commonwealth;
(b) To expand the development of housing for persons with special needs, the elderly, and the Commonwealth's most vulnerable populations; and
(c) To eliminate chronic homelessness for Kentuckians recovering from substance abuse. 
(7)	The corporation shall report the following information, for each year any amount of credit is issued, to the Interim Joint Committee on Appropriations and Revenue no later than December 31, 2024, and annually thereafter as long as the Kentucky affordable housing credit is issued:
(a)	The number of qualified projects issued credits each year;
(b)	A listing, by county of location, of each qualified project issued credits; and
(c)	The amount of credit issued to each qualified project.
âSECTION 2.   A NEW SECTION OF KRS CHAPTER 141 IS CREATED TO READ AS FOLLOWS:
(1)	As used in this section:
(a)	"Eligibility statement" has the same meaning as in Section 1 of this Act;
(b)	"Federal low-income housing tax credit" has the same meaning as in Section 1 of this Act;
(c)	"Kentucky affordable housing credit" has the same meaning as in Section 1 of this Act;
(d)	"Qualified project" has the same meaning as in Section 1 of this Act; and
(e)	"Qualified taxpayer" has the same meaning as in Section 1 of this Act.
(2)	(a)	For taxable years beginning on or after January 1, 2025, a qualified taxpayer shall be allowed a nonrefundable Kentucky affordable housing credit against the taxes imposed by KRS 141.020 or 141.040 and 141.0401, with the ordering of the credits as provided in Section 3 of this Act.
(b)	If the tax liability of the qualified taxpayer in any taxable year is not an amount sufficient to fully utilize the entire Kentucky affordable housing credit for that taxable year, the excess credit may be carried forward by the qualified taxpayer for three (3) taxable years.
(3)	(a)	The qualified taxpayer claiming a Kentucky affordable housing credit shall submit to the department, at the time of filing the tax return claiming the Kentucky affordable housing credit, a copy of the eligibility statement issued by the corporation to the qualified project.
(b)	If the corporation has not yet issued the eligibility statement at the time the qualified taxpayer files the return, the qualified taxpayer may later amend the tax return to include the eligibility statement.
(4)	(a)	If any amount of the federal low-income housing tax credit claimed for a qualified project is required to be recaptured or is otherwise disallowed pursuant to 26 U.S.C. sec. 42, a portion of the Kentucky affordable housing credit shall be recaptured from the qualified taxpayer claiming the credit.
(b)	The percentage of the Kentucky affordable housing credit that is recaptured under paragraph (a) of this subsection shall be equal to the percentage of federal low-income housing tax credit which is recaptured.
(c)	If any amount of the Kentucky affordable housing credit is recaptured, the department shall assess the taxpayer in an amount equal to one hundred percent (100%) of the recaptured amount. The recaptured amount shall be paid in the taxable year within which the recapture occurs.
(5)	(a)	In order for the General Assembly to evaluate the purposes of the tax credits provided in Section 1 of this Act, the department shall provide the following information on a cumulative basis for each taxable year or period to provide a historical impact of the tax credits to the Commonwealth:
1.	The number of tax returns, by the tax type of return filed, claiming the credit for each taxable year;
2.	The total amount of credit claimed on returns filed for each taxable year or period;
3.	The cumulative number of projects by county, as identified by the mailing address on the return filed for each taxable year or period;
4.	The cumulative total of credit claimed by county, as identified by the mailing address on the return filed for each taxable year or period;
5.	a.	In the case of taxpayers other than corporations, based on ranges of adjusted gross income of no larger than five thousand dollars ($5,000), the total amount of credits claimed for each adjusted gross income range for each taxable year; and
b.	In the case of corporations, based on ranges of net income of no larger than fifty thousand dollars ($50,000), the total amount of credits claimed for each net income range for each taxable year; and 
6.	Any other taxpayer information necessary for the General Assembly to evaluate this credit.
(b)	The report required by paragraph (a) of this subsection shall be submitted to the Interim Joint Committee on Appropriations and Revenue no later than November 1, 2026, and annually thereafter as long as the Kentucky affordable housing credit is claimed on any tax return filed, including returns filed under Section 4 of this Act.
âSection 3.   KRS 141.0205 is amended to read as follows:
If a taxpayer is entitled to more than one (1) of the tax credits allowed against the tax imposed by KRS 141.020, 141.040, and 141.0401, the priority of application and use of the credits shall be determined as follows:
(1)	The nonrefundable business incentive credits against the tax imposed by KRS 141.020 shall be taken in the following order:
(a)	The limited liability entity tax credit permitted by KRS 141.0401;
(b)	The economic development credits computed under KRS 141.347, 141.381, 141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-207, and 154.12-2088;
(c)	The qualified farming operation credit permitted by KRS 141.412;
(d)	The certified rehabilitation credit permitted by KRS 171.397(1)(a);
(e)	The health insurance credit permitted by KRS 141.062;
(f)	The tax paid to other states credit permitted by KRS 141.070;
(g)	The credit for hiring the unemployed permitted by KRS 141.065;
(h)	The recycling or composting equipment credit permitted by KRS 141.390;
(i)	The tax credit for cash contributions in investment funds permitted by KRS 154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 154.20-258;
(j)	The research facilities credit permitted by KRS 141.395;
(k)	The employer High School Equivalency Diploma program incentive credit permitted under KRS 151B.402;
(l)	The voluntary environmental remediation credit permitted by KRS 141.418;
(m)	The biodiesel and renewable diesel credit permitted by KRS 141.423;
(n)	The clean coal incentive credit permitted by KRS 141.428;
(o)	The ethanol credit permitted by KRS 141.4242;
(p)	The cellulosic ethanol credit permitted by KRS 141.4244;
(q)	The energy efficiency credits permitted by KRS 141.436;
(r)	The railroad maintenance and improvement credit permitted by KRS 141.385;
(s)	The Endow Kentucky credit permitted by KRS 141.438;
(t)	The New Markets Development Program credit permitted by KRS 141.434;
(u)	The distilled spirits credit permitted by KRS 141.389;
(v)	The angel investor credit permitted by KRS 141.396;
(w)	The film industry credit permitted by KRS 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(x)	The inventory credit permitted by KRS 141.408;[ and]
(y)	The renewable chemical production credit permitted by KRS 141.4231; and
(z)	The Kentucky affordable housing credit permitted by Section 2 of this Act.
(2)	After the application of the nonrefundable credits in subsection (1) of this section, the nonrefundable personal tax credits against the tax imposed by KRS 141.020 shall be taken in the following order:
(a)	The individual credits permitted by KRS 141.020(3);
(b)	The credit permitted by KRS 141.066;
(c)	The tuition credit permitted by KRS 141.069;
(d)	The household and dependent care credit permitted by KRS 141.067;
(e)	The income gap credit permitted by KRS 141.066; and
(f)	The Education Opportunity Account Program tax credit permitted by KRS 141.522.
(3)	After the application of the nonrefundable credits provided for in subsection (2) of this section, the refundable credits against the tax imposed by KRS 141.020 shall be taken in the following order:
(a)	The individual withholding tax credit permitted by KRS 141.350;
(b)	The individual estimated tax payment credit permitted by KRS 141.305;
(c)	The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 171.397(1)(b);
(d)	The film industry tax credit permitted by KRS 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022; and
(e)	The development area tax credit permitted by KRS 141.398.
(4)	The nonrefundable credit permitted by KRS 141.0401 shall be applied against the tax imposed by KRS 141.040.
(5)	The following nonrefundable credits shall be applied against the sum of the tax imposed by KRS 141.040 after subtracting the credit provided for in subsection (4) of this section, and the tax imposed by KRS 141.0401 in the following order:
(a)	The economic development credits computed under KRS 141.347, 141.381, 141.384, 141.3841, 141.400, 141.401, 141.403, 141.407, 141.415, 154.12-207, and 154.12-2088;
(b)	The qualified farming operation credit permitted by KRS 141.412;
(c)	The certified rehabilitation credit permitted by KRS 171.397(1)(a);
(d)	The health insurance credit permitted by KRS 141.062;
(e)	The unemployment credit permitted by KRS 141.065;
(f)	The recycling or composting equipment credit permitted by KRS 141.390;
(g)	The coal conversion credit permitted by KRS 141.041;
(h)	The enterprise zone credit permitted by KRS 154.45-090, for taxable periods ending prior to January 1, 2008;
(i)	The tax credit for cash contributions to investment funds permitted by KRS 154.20-263 in effect prior to July 15, 2002, and the credit permitted by KRS 154.20-258;
(j)	The research facilities credit permitted by KRS 141.395;
(k)	The employer High School Equivalency Diploma program incentive credit permitted by KRS 151B.402;
(l)	The voluntary environmental remediation credit permitted by KRS 141.418;
(m)	The biodiesel and renewable diesel credit permitted by KRS 141.423;
(n)	The clean coal incentive credit permitted by KRS 141.428;
(o)	The ethanol credit permitted by KRS 141.4242;
(p)	The cellulosic ethanol credit permitted by KRS 141.4244;
(q)	The energy efficiency credits permitted by KRS 141.436;
(r)	The ENERGY STAR home or ENERGY STAR manufactured home credit permitted by KRS 141.437;
(s)	The railroad maintenance and improvement credit permitted by KRS 141.385;
(t)	The railroad expansion credit permitted by KRS 141.386;
(u)	The Endow Kentucky credit permitted by KRS 141.438;
(v)	The New Markets Development Program credit permitted by KRS 141.434;
(w)	The distilled spirits credit permitted by KRS 141.389;
(x)	The film industry credit permitted by KRS 141.383 for applications approved on or after April 27, 2018, but before January 1, 2022;
(y)	The inventory credit permitted by KRS 141.408; 
(z)	The renewable chemical production tax credit permitted by KRS 141.4231; [and]
(aa)	The Education Opportunity Account Program tax credit permitted by KRS 141.522; and
(bb)	The Kentucky affordable housing credit permitted by Section 2 of this Act.
(6)	After the application of the nonrefundable credits in subsection (5) of this section, the refundable credits shall be taken in the following order:
(a)	The corporation estimated tax payment credit permitted by KRS 141.044;
(b)	The certified rehabilitation credit permitted by KRS 171.3961, 171.3963, and 171.397(1)(b); and
(c)	The film industry tax credit permitted by KRS 141.383 for applications approved prior to April 27, 2018, or on or after January 1, 2022.
âSECTION 4.   A NEW SECTION OF KRS CHAPTER 136 IS CREATED TO READ AS FOLLOWS:
(1)	As used in this section:
(a)	"Eligibility statement" has the same meaning as in Section 1 of this Act;
(b)	"Federal low-income housing tax credit" has the same meaning as in Section 1 of this Act;
(c)	"Kentucky affordable housing credit" has the same meaning as in Section 1 of this Act;
(d)	"Qualified project" has the same meaning as in Section 1 of this Act; and
(e)	"Qualified taxpayer" has the same meaning as in Section 1 of this Act.
(2)	For insurance premiums tax returns beginning on or after January 1, 2024, a qualified taxpayer shall be allowed a nonrefundable Kentucky affordable housing credit against the taxes imposed by KRS 136.330, 136.340, 136.350, 136.360, 136.370, 136.390, or 304.3-270, with the ordering of the credits as provided in Section 5 of this Act.
(3)	If the tax liability of the qualified taxpayer in any taxable year is not an amount sufficient to fully utilize the entire Kentucky affordable housing credit for that taxable year, the excess credit may be carried forward by the qualified taxpayer for three (3) taxable years.
(4)	(a)	The qualified taxpayer claiming a Kentucky affordable housing credit shall submit to the department, at the time of filing the tax return claiming the Kentucky affordable housing credit, a copy of the eligibility statement issued by the corporation to the qualified project.
(b)	If the corporation has not yet issued the eligibility statement at the time the qualified taxpayer files the return, the qualified taxpayer may later amend the tax return to include the eligibility statement.
(5)	(a)	If any amount of the federal low-income housing tax credit claimed for a qualified project is required to be recaptured or is otherwise disallowed pursuant to 26 U.S.C. sec. 42, a portion of the Kentucky affordable housing credit shall be recaptured from the qualified taxpayer claiming the credit.
(b)	The percentage of the Kentucky affordable housing credit that is recaptured under paragraph (a) of this subsection shall be equal to the percentage of federal low-income housing tax credit which is recaptured.
(c)	If any amount of the Kentucky affordable housing credit is recaptured, the department shall assess the taxpayer in an amount equal to one hundred percent (100%) of the recaptured amount. The recaptured amount shall be paid in the year within which the recapture occurs.
(6)	The Kentucky Department of Revenue shall provide the same type of information for credits claimed under this section as required by Section 2 of this Act to the Interim Joint Committee on Appropriations and Revenue no later than November 1, 2026, and annually thereafter as long as the Kentucky affordable housing credit is claimed on any tax return filed.
âSECTION 5.   A NEW SECTION OF KRS CHAPTER 136 IS CREATED TO READ AS FOLLOWS:
(1)	If a taxpayer is entitled to more than one (1) of the tax credits allowed against the taxes imposed by KRS 136.330, 136.340, 136.350, 136.360, 136.370, 136.390, and 304.3-270, the priority of application and use of the credits shall be determined as follows:
(a)	The Kentucky Investment Fund Act credit permitted by KRS 154.20-258;
(b)	The New Markets Development Program credit permitted by KRS 141.434; and
(c)	The Kentucky affordable housing credit permitted by Section 1 of this Act.
(2)	A qualified taxpayer claiming a credit against any of the insurance premiums taxes imposed by KRS 136.330, 136.340, 136.350, 136.360, 136.370, or 136.390 shall not be required to pay additional retaliatory tax imposed by KRS 304.3-270.
âSection 6.   KRS 131.190 is amended to read as follows:
(1)	No present or former commissioner or employee of the department, present or former member of a county board of assessment appeals, present or former property valuation administrator or employee, present or former secretary or employee of the Finance and Administration Cabinet, former secretary or employee of the Revenue Cabinet, or any other person, shall intentionally and without authorization inspect or divulge any information acquired by him or her of the affairs of any person, or information regarding the tax schedules, returns, or reports required to be filed with the department or other proper officer, or any information produced by a hearing or investigation, insofar as the information may have to do with the affairs of the person's business.
(2)	The prohibition established by subsection (1) of this section shall not extend to:
(a)	Information required in prosecutions for making false reports or returns of property for taxation, or any other infraction of the tax laws;
(b)	Any matter properly entered upon any assessment record, or in any way made a matter of public record;
(c)	Furnishing any taxpayer or his or her properly authorized agent with information respecting his or her own return;
(d)	Testimony provided by the commissioner or any employee of the department in any court, or the introduction as evidence of returns or reports filed with the department, in an action for violation of state or federal tax laws or in any action challenging state or federal tax laws;
(e)	Providing an owner of unmined coal, oil or gas reserves, and other mineral or energy resources assessed under KRS 132.820, or owners of surface land under which the unmined minerals lie, factual information about the owner's property derived from third-party returns filed for that owner's property, under the provisions of KRS 132.820, that is used to determine the owner's assessment. This information shall be provided to the owner on a confidential basis, and the owner shall be subject to the penalties provided in KRS 131.990(2). The third-party filer shall be given prior notice of any disclosure of information to the owner that was provided by the third-party filer;
(f)	Providing to a third-party purchaser pursuant to an order entered in a foreclosure action filed in a court of competent jurisdiction, factual information related to the owner or lessee of coal, oil, gas reserves, or any other mineral resources assessed under KRS 132.820. The department may promulgate an administrative regulation establishing a fee schedule for the provision of the information described in this paragraph. Any fee imposed shall not exceed the greater of the actual cost of providing the information or ten dollars ($10);
(g)	Providing information to a licensing agency, the Transportation Cabinet, or the Kentucky Supreme Court under KRS 131.1817;
(h)	Statistics of gasoline and special fuels gallonage reported to the department under KRS 138.210 to 138.448;
(i)	Providing any utility gross receipts license tax return information that is necessary to administer the provisions of KRS 160.613 to 160.617 to applicable school districts on a confidential basis;
(j)	Providing documents, data, or other information to a third party pursuant to an order issued by a court of competent jurisdiction; or
(k)	Providing information to the Legislative Research Commission under:
1.	KRS 139.519 for purposes of the sales and use tax refund on building materials used for disaster recovery;
2.	KRS 141.436 for purposes of the energy efficiency products credits;
3.	KRS 141.437 for purposes of the ENERGY STAR home and the ENERGY STAR manufactured home credits;
4.	KRS 141.383 for purposes of the film industry incentives;
5.	KRS 154.26-095 for purposes of the Kentucky industrial revitalization tax credits and the job assessment fees;
6.	KRS 141.068 for purposes of the Kentucky investment fund;
7.	KRS 141.396 for purposes of the angel investor tax credit;
8.	KRS 141.389 for purposes of the distilled spirits credit;
9.	KRS 141.408 for purposes of the inventory credit;
10.	KRS 141.390 for purposes of the recycling and composting credit;
11.	KRS 141.3841 for purposes of the selling farmer tax credit;
12.	KRS 141.4231 for purposes of the renewable chemical production tax credit; 
13.	KRS 141.524 for purposes of the Education Opportunity Account Program tax credit;
14.	KRS 141.398 for purposes of the development area tax credit;[ and]
15.	KRS 139.516 for the purposes of the sales and use tax exemption on the commercial mining of cryptocurrency; and
16.	Sections 2 and 4 of this Act for purposes of the Kentucky affordable housing credit.
(3)	The commissioner shall make available any information for official use only and on a confidential basis to the proper officer, agency, board or commission of this state, any Kentucky county, any Kentucky city, any other state, or the federal government, under reciprocal agreements whereby the department shall receive similar or useful information in return.
(4)	Access to and inspection of information received from the Internal Revenue Service is for department use only, and is restricted to tax administration purposes. Information received from the Internal Revenue Service shall not be made available to any other agency of state government, or any county, city, or other state, and shall not be inspected intentionally and without authorization by any present secretary or employee of the Finance and Administration Cabinet, commissioner or employee of the department, or any other person.
(5)	Statistics of crude oil as reported to the department under the crude oil excise tax requirements of KRS Chapter 137 and statistics of natural gas production as reported to the department under the natural resources severance tax requirements of KRS Chapter 143A may be made public by the department by release to the Energy and Environment Cabinet, Department for Natural Resources.
(6)	Notwithstanding any provision of law to the contrary, beginning with mine-map submissions for the 1989 tax year, the department may make public or divulge only those portions of mine maps submitted by taxpayers to the department pursuant to KRS Chapter 132 for ad valorem tax purposes that depict the boundaries of mined-out parcel areas. These electronic maps shall not be relied upon to determine actual boundaries of mined-out parcel areas. Property boundaries contained in mine maps required under KRS Chapters 350 and 352 shall not be construed to constitute land surveying or boundary surveys as defined by KRS 322.010 and any administrative regulations promulgated thereto.