HF 2341

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:03am

A bill for an act
relating to taxation; providing a tax credit advance loan program; establishing
a first-time homebuyer tax credit advance loan account; amending Minnesota
Statutes 2008, section 462A.21, by adding a subdivision; proposing coding for
new law in Minnesota Statutes, chapter 462A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [462A.2094] TAX CREDIT ADVANCE LOAN PROGRAM FOR
FIRST-TIME HOMEBUYERS.
new text end

new text begin (a) The agency may develop the tax credit advance loan program for first-time
homebuyers, up to the limits of available appropriations and transfers. The program
provides loans to first-time homebuyers who are eligible for the federal first-time
homebuyer credit. The maximum tax credit advance loan is the lesser of (i) 8.5 percent of
the purchase price of the home, or (ii) $6,750. The agency may charge a reasonable fee
for the costs associated with making and servicing tax credit advance loans. The agency
shall require the first-time homebuyer to execute a promissory note secured by a second
mortgage on the property being purchased to secure repayment of the loan as referenced
in paragraph (e). The agency may use amounts in the first-time homebuyer tax credit
advance loan account to fund the tax credit advance loan program.
new text end

new text begin (b) For purposes of this section, "federal first-time homebuyer credit" means the
credit allowed under section 36 of the Internal Revenue Code, and "first-time homebuyer"
has the meaning given in section 36 of the Internal Revenue Code.
new text end

new text begin (c) To be eligible for a tax credit advance loan, a first-time homebuyer must:
new text end

new text begin (i) meet the eligibility requirements for the federal first-time homebuyer credit;
new text end

new text begin (ii) have an annual gross income that does not exceed (A) 115 percent of the greater
of the state or area median income, as determined by the U.S. Department of Housing and
Urban Development, or (B) the federal first-time homebuyers tax credit income limits,
whichever is less.
new text end

new text begin (iii) use the tax credit advance loan in conjunction with a home mortgage loan at
a 30-year fixed rate; and
new text end

new text begin (iv) agree to apply for the federal first-time homebuyer credit and use the credit
refund to repay the tax credit advance loan.
new text end

new text begin (d) The tax credit advance loan agreement between the agency and the homebuyer
must require repayment of the tax credit advance loan on or before June 15 of the calendar
year following the year in which the tax credit advance loan is received.
new text end

new text begin (e) The agency may submit claims for debts owed due to failure to repay tax credit
advance loans as provided under the revenue recapture act in chapter 270A. Repayments
of tax credit advance loans are deposited in the housing development fund and credited to
the first-time homebuyer taxpayer advance loan account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2008, section 462A.21, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin First-time homebuyer tax credit advance loan account. new text end

new text begin The agency
may establish a first-time homebuyer tax credit advance loan account as a separate account
within the housing development fund for the purposes of section 462A.2094, and may pay
costs and expenses necessary and incidental to the development and operation of the tax
credit advance loan program from the account.
new text end

Sec. 3. new text begin TRANSFERS.
new text end

new text begin (a) $....... is transferred in fiscal year 2009 from the real estate education, research
and recovery fund in the state treasury established in Minnesota Statutes section 82.43 to
the first-time homebuyer tax credit advance loan account in the housing development fund
established in Minnesota Statutes section 462A.21, subdivision 2a.
new text end

new text begin (b) $....... is transferred in fiscal year 2009 from the contractor recovery fund in
the state treasury established in Minnesota Statutes section 326B.89 to the first-time
homebuyer tax credit advance loan account in the housing development fund established
in Minnesota Statutes section 462A.21, subdivision 2a.
new text end

new text begin (c) At the end of fiscal year 2010 and each following fiscal year, a share of the
balance in the first-time homebuyer tax credit advance loan account established in
Minnesota Statutes section 462A.21, subdivision 2a is transferred to the real estate
education, research and recovery fund established in Minnesota Statutes section 82.43.
The share equals the amount in the first-time homebuyer tax credit advance loan account
multiplied by the ratio of the amount transferred in paragraph (a) to the sum of the
amounts transferred in paragraphs (a) and (b). Transfers under this paragraph continue
until the amount transferred from the real estate education, research and recovery fund
to the first-time homebuyer tax credit advance loan account under paragraph (a) is fully
repaid or for ten years, whichever is sooner. The Minnesota Housing Finance Agency and
the commissioner of commerce may agree to a different transfer schedule.
new text end

new text begin (d) At the end of fiscal year 2010 and each following fiscal year, a share of the
balance in the first-time homebuyer tax credit advance loan account established in
Minnesota Statutes section 462A.21, subdivision 2a is transferred to the contractor
recovery fund established in Minnesota Statutes section 326B.89. The share equals the
amount in the first-time homebuyer tax credit advance loan account multiplied by the
ratio of the amount transferred in paragraph (b) to the sum of the amounts transferred
in paragraphs (a) and (b). Transfers under this paragraph continue until the amount
transferred from the contractor recovery fund to the first-time homebuyer tax credit
advance loan account under paragraph (b) is fully repaid or for ten years, whichever is
sooner. The Minnesota Housing Finance Agency and the commissioner of labor and
industry may agree to a different transfer schedule.
new text end