HF 2142

as introduced - 94th Legislature (2025 - 2026) Posted on 03/10/2025 02:46pm

A bill for an act
relating to taxation; income and corporate franchise; allowing for second assignment
of the historic structure rehabilitation credit; modifying requirements for issuing
allocation certificates; amending Minnesota Statutes 2024, section 290.0681,
subdivisions 3, 4.

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

Section 1.

Minnesota Statutes 2024, section 290.0681, subdivision 3, is amended to read:

Subd. 3.

Applications; allocations.

(a) To qualify for a credit or grant under this section,
the developer of a project must apply to the office before the rehabilitation begins. The
application must contain the information and be in the form prescribed by the office. The
office may collect a fee for application of up to 0.5 percent of qualified rehabilitation
expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to
offset costs associated with personnel and administrative expenses related to administering
the credit and preparing the economic impact report in subdivision 9. Application fees are
deposited in the account. The application must indicate if the application is for a credit or
a grant in lieu of the credit or a combination of the two and designate the taxpayer qualifying
for the credit or the recipient of the grant.

(b) Upon approving an application for credit, the office shall issue allocation certificates
that:

(1) verify eligibility for the credit or grant;

(2) state the amount of credit or grant anticipated with the project, with the credit amount
equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated
in the application;

(3) state that the credit or grant allowed may increase or decrease if the federal credit
the project receives at the time it is placed in service is different than the amount anticipated
at the time the allocation certificate is issued; and

(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or
grant recipient is entitled to receive one-fifth of the total amount of either the credit or the
grant at the time the project is placed in service deleted text begin , provided that date is within three calendar
years following the issuance of the allocation certificate deleted text end .

(c) The office, in consultation with the commissioner, shall determine if the project is
eligible for a credit or a grant under this section and must notify the developer in writing
of its determination. Eligibility for the credit is subject to review and audit by the
commissioner.

(d) The federal credit recapture and repayment requirements under section 50 of the
Internal Revenue Code do not apply to the credit allowed under this section.

(e) Any decision of the office under paragraph (c) may be challenged as a contested case
under chapter 14. The contested case proceeding must be initiated within 45 days of the
date of written notification by the office.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications for allocation certificates
submitted after June 30, 2025.
new text end

Sec. 2.

Minnesota Statutes 2024, section 290.0681, subdivision 4, is amended to read:

Subd. 4.

Credit certificates; grants.

(a)(1) The developer of a project for which the
office has issued an allocation certificate must notify the office when the project is placed
in service. Upon verifying that the project has been placed in service, and was allowed a
federal credit, the office must issue a credit certificate to the taxpayer designated in the
application or must issue a grant to the recipient designated in the application. The credit
certificate must state the amount of the credit.

(2) The credit amount equals the federal credit allowed for the project.

(3) The grant amount equals 90 percent of the federal credit allowed for the project.

(b) The recipient of a credit certificate may assign the certificate to another taxpayer
before the first deleted text begin one-fifth deleted text end payment is claimed, which is then allowed the credit under this
section or section 297I.20, subdivision 3. new text begin Before the payment is claimed but after the first
assignment, the first assignee may assign the credit certificate in whole to a second assignee.
new text end An assignment is not valid unless the assignee notifies the commissioner within 30 days of
the date that the assignment is made. The commissioner shall prescribe the forms necessary
for notifying the commissioner of the assignment of a credit certificate and for claiming a
credit by assignment. new text begin The original credit certificate recipient and each assignee must file a
return with the commissioner for the taxable year that the project is placed in service.
new text end

(c) Credits passed through to partners, members, shareholders, or owners pursuant to
subdivision 5 are not an assignment of a credit certificate under this subdivision.

(d) A grant agreement between the office and the recipient of a grant may allow the
grant to be issued to another individual or entity.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications for allocation certificates
submitted after June 30, 2025.
new text end