Kansas House Bill HB2096

Kansas 2025-2026 Regular Session

• Introduced: 1/27/25
• Refer: 1/27/25
• Report Pass: 2/18/25
• Engrossed: 2/26/25
• Refer: 2/27/25

Caption

Providing for transferability of Kansas housing investor tax credits from the year that the credit was originally issued.

Summary

HB 2096 amends Kansas law governing the Kansas housing investor tax credit to make those credits transferable from the year they were originally issued. Under current law, qualified investors, project builders, and developers can receive income, privilege, or premium tax credits for investments in qualified housing projects, and unused credits may be carried forward for up to four taxable years. The bill keeps that framework in place but clarifies that any carried-forward portion of a credit may also be transferred, and that a transferred credit may be claimed beginning in the year the original cash investment was made. It also applies this transferability rule retroactively to credits issued for tax year 2022 and later. The bill preserves the existing credit structure and caps: credits remain available for qualified housing projects, with per-unit limits that vary by county population, a 40-unit annual project limit, and an annual statewide cap of $13 million. It also retains the geographic allocation requirements that reserve minimum amounts for smaller counties and allow a portion for mid-sized counties. The measure authorizes the secretary of revenue to adopt rules to administer the program and continues to treat the credit as a tax paid for certain insurance premium tax calculations. The bill’s practical impact is to increase flexibility and marketability of the housing tax credit by allowing investors and later transferees to sell or assign credits more freely, including credits that have been carried forward. That change may improve the attractiveness of the credit to investors and developers, potentially helping finance housing projects, especially in smaller and mid-sized Kansas counties targeted by the program. The bill does not expand the total annual credit cap, but it may affect how quickly and efficiently credits are used. The overall sentiment appears favorable. The House passed the bill overwhelmingly, 111-6, suggesting broad support for the housing finance incentive and for the transferability change. The bill was requested on behalf of the Friends of Historic Preservation, indicating support from stakeholders interested in housing and preservation-related development. No committee transcript was provided, so there is no recorded debate to identify detailed arguments, but the narrow opposition in the House suggests only limited concern. The main point of contention is likely the policy choice to make tax credits transferable, especially retroactively, which can raise concerns about tax administration, secondary-market complexity, and the fiscal value of credits to the state. Opponents may also question whether the incentive is sufficiently targeted or whether it primarily benefits investors and developers rather than directly lowering housing costs. Supporters, by contrast, appear to view transferability as a way to improve utilization of the credit and support housing construction in underserved areas.

Impact

HB 2096 amends K.S.A. 2024 Supp. 79-32,313 to allow Kansas housing investor tax credits to be transferred beginning in the year the original cash investment was made, including carried-forward credits, and applies that rule retroactively to credits issued for tax year 2022 and later. It leaves intact the existing credit amounts, annual cap, county-based allocation requirements, and carryforward period, while authorizing the secretary of revenue to adopt implementing rules. The bill primarily affects qualified investors, project builders, developers, and transferees who participate in the housing tax credit program.

Sentiment

The bill appears to have strong bipartisan or at least broad chamber support, as reflected by the House final passage vote of 111-6. The absence of committee transcript material limits insight into detailed debate, but the vote margin suggests the measure was generally viewed as a technical or pro-development change rather than a controversial policy shift. Support likely centered on improving the usability of the housing tax credit program, while the small number of dissenting votes indicates only limited opposition.

Contention

The most likely area of disagreement is the expansion of transferability, especially the retroactive application to credits issued since tax year 2022. Critics may worry that making credits easier to trade could reduce transparency, complicate administration, or increase the state’s effective subsidy cost without guaranteeing additional housing production. Supporters likely argue that transferability improves liquidity, helps investors monetize credits, and makes the program more effective for financing housing projects in Kansas, particularly in smaller communities.