Bill
HB 2289
Kansas narrows and phases out the affordable housing tax credit, imposes caps until 2028, ends new 4% credits after 2025, and allows transferability of housing investor credits.
Short title: Changes to the Kansas affordable housing tax credit program and to the Kansas housing investor tax credit (amends K.S.A. 2024 Supp. 79‑32,306 and 79‑32,313).
Status: Enacted — approved by the Governor on April 24, 2025.
Summary
- HB 2289 (enrolled) narrows and phases out the Kansas affordable housing tax credit program (the state credit that supplements federal Low‑Income Housing Tax Credits), imposes annual aggregate caps for specified years, prohibits new awards after the 2028 qualified allocation plan year, and limits further awards to developments receiving the 4% federal credit after a specified date. The bill also amends the Kansas housing investor tax credit rules to allow transferability of credits from the year the credit was originally issued.
Key provisions
- Aggregate caps and phase‑out
- For the 2025 qualified allocation plan (QAP) year, the total Kansas affordable housing tax credits awarded by the Kansas Housing Resources Corporation (KHRC) to all projects is capped at $25,000,000.
- For QAP years 2026, 2027 and 2028, the annual cap is set at $8,800,000 per QAP year.
- After the 2028 QAP (and after December 31, 2028), no further credits under this act will be allocated or awarded.
Limits on 4% developments
Continued 9% awards through 2028
Transferability of housing investor tax credits
Who is affected
- Primary: developers/owners of affordable housing projects in Kansas, particularly those using federal Low‑Income Housing Tax Credits (both 4% and 9% projects).
- Secondary: investors, pass‑through entities, banks, insurance companies, and other Kansas taxpayers who claim, receive, buy, or sell these state tax credits.
- Administrative: Kansas Housing Resources Corporation (KHRC) — for administration and allocation under the QAP — and the Kansas Department of Revenue for tax administration.
Legal/statutory changes
- Amends: K.S.A. 2024 Supp. 79‑32,306 (Kansas affordable housing tax credit) and 79‑32,313 (Kansas housing investor tax credit); existing sections repealed as provided in the act.
Procedural/timeline notes
- Introduced: January 30, 2025.
- Passed both chambers after committee and conference committee action; enrolled and presented to the Governor; approved April 24, 2025.
- The bill honors previously awarded credits (through the dates specified) and phases out new awards after 2028.
Fiscal and practical effects
- The measure reduces the future volume of state affordable housing tax credits available, which will likely reduce future state tax expenditures related to the program. The law preserves credits already awarded through the specified cut‑off dates.
- Allowing earlier/year‑of issuance transferability of housing investor credits may increase marketability/liquidity of those credits for investors; exact fiscal impact depends on market response and administrative interpretation.
- KHRC will need to apply the new annual caps and application cut‑offs in its QAP procedures; taxpayers and developers must adjust planning timelines accordingly.
For full bill text and statutory details, consult the enrolled act amending K.S.A. 2024 Supp. 79‑32,306 and 79‑32,313.
Compiled from official sources — confirm details with the bill’s official record.
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