HB 488 Summary

• Addresses Hawaii's housing shortage by amending the low-income housing tax credit statute to expand the pool of potential investors in affordable housing development projects.

• Removes the requirement that at-risk rules under Internal Revenue Code section 42(k) apply to state low-income housing tax credits, allowing broader investor participation.

• Clarifies that Internal Revenue Code sections 465 (deductions limited to amount of risk) and 469 (passive activity losses and credits) do not apply to investments claiming the state low-income housing tax credit.

• Specifies that determinations of qualified basis, eligible basis, qualified low-income housing projects, and recapture of credits follow Internal Revenue Code section 42 standards.

• Effective July 1, 2050 for qualified low-income buildings awarded credits after December 31, 2050.