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HB 245

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2025 Regular Session Introduced by Gary Brown and 4 co-sponsors

Reforms NC LIHTC allocation to prioritize rural, high-poverty counties via QAP scoring using radius-based proximity to amenities, with public input; effective Oct 1, 2025.

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Bill Summary · HB 245

Summary — HB 245: Affordable Housing in Rural Areas (North Carolina, 2025)

Status: Passed 1st Reading (Mar 3, 2025)
Effective date (statutory): October 1, 2025 — applies to Qualified Allocation Plans (QAPs) adopted after that date.

Purpose

To refocus North Carolina’s federal Low-Income Housing Tax Credit (LIHTC) and related private activity bond allocation process so it better incentivizes development of affordable housing in rural communities and counties with higher poverty levels.

Key provisions

  • Amends G.S. 143-433.9 to require the North Carolina Federal Tax Reform Allocation Committee (and any agency it designates) to ensure the state’s Qualified Allocation Plan (QAP) "incentivizes the development and availability of affordable housing in rural communities and counties with higher poverty levels."
  • Procedural requirements before adopting/amending the QAP:
    • Publish the proposed Plan in the North Carolina Register at least 30 days before final adoption.
    • Notify prior-year LIHTC applicants and other interested parties.
    • Accept oral and written comments.
    • Hold at least one public hearing.
  • Specific guidelines and scoring/priority criteria the Committee must use when allocating tax credits:
    1. Proximity to amenities (grocery stores, shopping centers, pharmacies) must be measured by radius (straight-line) distance, not driving distance.
    2. For proposed sites located in municipalities with population <10,000, give favorable consideration to sites within 10 miles (radius) of the identified amenities.
    3. Define “grocery amenities” as stores that have grocery sections (i.e., not every retailer).
    4. Tie-breaker: when two proposed sites score equally, award credits to the site located in the area with the highest poverty level.
  • Clarifies the Committee’s allocation duties for the unified volume limitation, state housing credit ceiling, and other bond/tax-credit authorities; requires consideration of state interests including economic development and housing needs.
  • Effective date provision: becomes effective Oct. 1, 2025 and applies to QAPs adopted after that date.

Who is affected

  • Primary: affordable housing developers seeking LIHTC and related bond allocations.
  • Local governments and rural communities (may gain higher priority for credit awards).
  • Low-income households in rural and high-poverty counties (potentially greater development activity and housing options).
  • State allocation agencies (must adjust QAP scoring and procedures; hold required public processes).

Potential impacts and considerations

  • Expected outcome: greater targeting of LIHTC resources toward rural areas and high-poverty communities, potentially improving access to affordable housing in underserved locations.
  • Possible trade-offs: re-prioritizing credits for rural projects may reduce allocations available for some urban projects; measuring distance by radius may produce different site competitiveness than road-distance metrics.
  • Fiscal impact: not specified in the statutory text; impacts would generally be on how limited LIHTC and private activity bond resources are allocated rather than direct state spending.

Timeline / Procedure

  • Committee must follow stated publication, notice, comment, and public hearing steps when adopting or amending the QAP.
  • Changes apply to QAPs adopted after Oct. 1, 2025.

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

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