AB 2842 Summary

• Establishes a "Workforce Housing Tax Credit Pilot" allowing a state income tax credit equal to 20% of a qualified low-income building's unadjusted allocated basis, not to exceed $50,000 per unit, for taxable years beginning January 1, 2017.

• Limits credit eligibility to projects in the 12 California counties with the highest HUD fair market rents, requiring at least 40% of units reserved for households earning 60-80% of area median income.

• Allocates an aggregate total of $100,000,000 in credits on a first-come, first-served basis across three tax types (corporation, income, and insurance taxes) with no annual replenishment of unused amounts.

• Permits taxpayers to irrevocably elect to sell allocated credits to unrelated parties for at least 80% of the credit value, with one-time resale allowed by original purchasers.

• Expands property tax welfare exemption to include property owned by entities receiving the new workforce housing tax credit, and provides no state reimbursement to local agencies for property tax revenue losses.