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HB 2119

Discontinuing the Kansas affordable housing tax credit for qualified developments receiving a 4% federal tax credit.

2025-2026 Regular Session

HB 2119 ends the Kansas Affordable Housing Tax Credit for 4% federal LIHTC projects after 2025, with KHRC application/approval cutoffs and preserving existing credits.

Died in Senate Committee
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Bill Summary · HB 2119

Summary — HB 2119 (Kansas, 2025 session)

Main purpose

HB 2119 would discontinue the state-level Kansas Affordable Housing Tax Credit (the Kansas match) for developments that receive the 4% federal low-income housing tax credit (LIHTC). The change is tied to the 2025 Qualified Allocation Plan (QAP): after the 2025 QAP year the KHRC would no longer provide the Kansas credit to 4% projects. Existing and already-awarded credits are preserved.

Key provisions

  • Discontinue the Kansas Affordable Housing Tax Credit for qualified developments receiving the 4% federal LIHTC effective after the 2025 QAP. (As amended, the bill does not discontinue Kansas credits for projects receiving 9% federal LIHTCs.)
  • Prohibits the Kansas Housing Resources Corporation (KHRC) from:
    • accepting applications for the 4% LIHTC after August 15, 2025; and
    • approving applications for the 4% LIHTC after November 14, 2025.
  • Any Kansas credit allocation awarded before July 1, 2025, and allocations under the 2025 QAP would remain valid — claimable throughout the statutory credit period and any applicable carry‑forward period.
  • (House and Senate committee amendments clarified inclusion of credits awarded under the 2025 QAP and removed proposed discontinuation for 9% federal credit projects.)

Who is affected

  • Kansas Housing Resources Corporation (KHRC): changes application/approval deadlines and award policy.
  • Owners/developers of affordable housing financed with tax‑exempt bonds (typical recipients of 4% federal LIHTC): would no longer be eligible for the Kansas match for applications/awards after the specified 2025 deadlines.
  • Pass‑through entities, partners, insurers, banks and other taxpayers who currently claim the Kansas credit against state income, privilege or premium taxes.
  • Indirectly affects affordable housing production, developers, construction-related employment, and local housing availability — a point emphasized in opponent testimony.

Fiscal and programmatic impact

  • KHRC had allocated about $56.5 million in Kansas credits since 2023.
  • Division of the Budget / Department of Revenue estimates discontinuing the state credit (per the fiscal note scenario) would increase State General Fund revenues by approximately:
    • $12.6 million in FY 2027,
    • $41.3 million in FY 2028, and
    • $69.1 million in FY 2029.
  • KHRC estimates timing of allocation certificates: ~$2.1M received before July 1, 2025; ~$12.6M in tax year 2026; ~$41.3M in tax year 2027; ~$15.2M in tax year 2028. Approved projects may claim credits over up to ten years; carryforward rules apply.
  • Implementation cost to Department of Revenue estimated at $39,400 (FY 2026) to modify automated tax systems.

Legislative status and timeline

  • Introduced: January 27, 2025 (requested by Rep. Tarwater).
  • Amended in House Committee to include credits awarded under the 2025 QAP.
  • Amended in Senate Committee to remove discontinuation for 9% projects and to set KHRC application/approval cutoffs for 4% projects (dates above).
  • Reported out of committee; on 2025-03-24 the bill was withdrawn from Committee on Federal and State Affairs and referred to the Committee of the Whole. (Further floor or enactment actions may follow; check the Legislature’s records for updates.)

Stakeholder positions (from committee hearings)

  • Opponents (cities, housing developers, banks, housing coalitions, chambers of commerce, interfaith groups, etc.) argued the change would reduce affordable housing production, harm jobs and workforce development.
  • KHRC and League of Kansas Municipalities provided neutral testimony noting the bill could affect already‑awarded credits.

For additional detail, see KHRC materials, the Division of the Budget fiscal note (Feb. 6, 2025), and committee supplemental notes.

Compiled from official sources — confirm details with the bill’s official record.

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