BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           73 (Dunn)
          
          Hearing Date:  4/30/01          Amended: 3/26/01       
          Consultant:  Anne Maitland          Policy Vote: Housing:  
          7-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          SB 73 increases the annual allocation of the low-income  
          housing credit from $50 million to $70 million in 2001 and  
          adjusts that amount annually for inflation

                              Fiscal Impact (in thousands)
           
          Provisions    2001-02     2002-03    2003-04    2004-05   2005-06    2006-07     
           Fund  
          Credit
          Increase            -0-         <500      4,000       10,000     
          16,000    19,000    General
          
          STAFF COMMENTS:  This bill meets the criteria to be placed  
          on the Suspense file.

          Currently, both federal and state laws provide for a credit  
          for taxpayers who invest in low-income housing projects.   
          Under federal law, the amount of credit varies:  
          developments in high-cost areas qualify for more credits;  
          developments which receive a partial federal subsidy  
          qualify for fewer credits.  The federal credit is claimed  
          over a 10-year period.  Under state law, a 30% credit may  
          be claimed for projects which receive no federal subsidy; a  
          13% credit may be claimed for projects which receive a  
          federal subsidy.  These credits are claimed over a 4-year  
          period.

          The Tax Credit Allocation Committee annually allocates both  
          the federal and state credits to developers of low-income  
          housing.  The federal government allocates about $40  
          million annually.  From 1987 through 1997, $35 million in  
          state credits was allocated annually;  currently the annual  
          allocation is $50 million.

          The $40 million in federal credits represents only the  










          first-year costs of the credit; the succeeding 9 years of  
          credit are "off budget" and not counted against the $40  
          million annual allocation.  The $35 or $50 million state  
          allocation represents the full four-year cost of the  
          credit.

          This bill would increase the allocation from $50 million to  
          $70 million in 2001.  Beginning in 2002, the $70 million  
          would be adjusted for inflation increases using the federal  
          Consumer Price Index.