15 CAR § 85-106 – Allocation of affordable neighborhood housing tax credits

(a)
1. (1)
  1. (A) The Affordable Neighborhood Housing Tax Credit Act of 1997, codified at Arkansas Code § 15-5-1301 et seq., provides that any business firm engaging in the provision of affordable housing assistance activities in the State of Arkansas may be entitled to receive affordable neighborhood housing tax credits (ANHTCs).
  2. (B) "Affordable housing assistance activities" includes any “money, real, or personal property expended or devoted to the construction or rehabilitation of affordable housing units developed by or in conjunction with any governmental unit or not-for-profit corporation”.
2. (2) The Affordable Neighborhood Housing Tax Credit Act of 1997 limits the total allocation of ANHTCs to seven hundred fifty thousand dollars ($750,000) in any taxable year.
(b)
1. (1) The Arkansas Development Finance Authority and the Department of Finance and Administration have determined that, in the best interest of affordable housing in Arkansas, affordable housing assistance activities must be devoted to those low-income housing developments that qualify for housing tax credits pursuant to I.R.C. § 42 through the authority’s federal low-income housing tax credit or tax-exempt bond programs for residential rental housing.
2. (2) Thus, any business firm seeking allocation of ANHTCs must do so in conjunction with an MFHA for federal low-income housing tax credits or tax-exempt bonds to develop affordable housing units by or in conjunction with any governmental unit or not-for-profit corporation.
(c)
1. (1) A proposal for ANHTCs must be submitted with the MFHA for federal low-income housing tax credits.
2. (2)
  1. (A) In its MFHA for federal low-income housing tax credits, the applicant will include a commitment from each business firm providing affordable housing assistance activities to the proposed low-income housing development.
  2. (B) Each such commitment must:
(i) Be in writing and executed by an authorized representative of the business firm;
1. (ii) Identify the governmental unit or not-for-profit corporation to which the affordable housing assistance activities are committed;
  1. (iii) Describe in detail the nature of the affordable housing assistance activities to be provided, i.e., whether money, real, or personal property, and how it will be devoted to the construction or rehabilitation of affordable housing units; and
    1. (iv)
(a) (a) The Affordable Neighborhood Housing Tax Credit Act of 1997 limits the amount of tax credits allowable to a business firm to thirty percent (30%) of the total amount invested.
(b) (b) If the affordable housing assistance activity is other than money, the business firm must provide an appraisal certifying the value of the property invested.
1. (d) If the business firm commits its affordable housing assistance activities to a governmental unit, a not-for-profit organization, or a neighborhood organization, as defined within the Affordable Neighborhood Housing Tax Credit Act of 1997, that is not the applicant on the MFHA, the applicant must submit with its MFHA the following from such governmental unit, not-for-profit organization, or neighborhood organization:
2. (1) Organizational documents, including:
  1. (A) Arkansas articles of incorporation; and
  2. (B) Tax-exempt status determination letter from the Internal Revenue Service;
3. (2) A written statement describing its relationship with the applicant, i.e., any ownership interest in the applicant or other relationship with the applicant; and
4. (3) A written statement describing in detail its commitment of the affordable housing assistance activities received from each business firm to the construction or rehabilitation of affordable housing units within the development proposed.
(e) For each proposal of affordable housing assistance activities submitted with the MFHA, the applicant must certify in writing that it will expend or devote the affordable housing assistance activities committed to the construction or rehabilitation of affordable housing units within the development.
(f)
1. (1)
  1. (A) Based on demonstrated need in the MFHA, the authority will give a priority allocation of ANHTCs to those developments that are in designated low-income counties under the state’s consolidated plan submitted to the United States Department of Housing and Urban Development.
  2. (B) The list of these counties is contained in the MFHA.
2. (2) The allocation of ANHTCs will be as follows:
  1. (A) Developments receiving an allocation of federal low-income housing tax credits that are to be located in any one (1) of the low-income counties designated in the state consolidated plan, beginning with the highest score under the scoring system set forth in the MFHA;
  2. (B) In the event of a shortage of eligible developments in low-income counties designated in the consolidated plan, priority for ANHTCs will be given to those developments within qualified census tracts, beginning with the highest score under the scoring system set forth in the MFHA; and
  3. (C) To the extent that there are remaining ANHTCs, the remaining ANHTCs will be allocated to remaining qualified developments until such time as exhausted, beginning with the highest score under the scoring system set forth in the MFHA.
(g)
1. (1) The authority will reserve and allocate ANHTCs in conjunction with its reservation and allocation or issuance of federal low-income housing tax credits.
2. (2)
  1. (A) With its issuance of Internal Revenue Service Forms 8609 for federal low-income housing tax credits, the authority will issue a certificate of allocation certifying the amount of ANHTCs allocated to the business firm entitled to such allocation.
  2. (B) The authority will annually provide the Department of Finance and Administration with a copy of each certificate of allocation for ANHTCs allocated that year.
3. (3) The Department of Finance and Administration will be notified of any revocation of ANHTCs.

Codification Notes: “MFHA” means multi-family housing application.