Minnesota Session Laws - 1990, Regular Session

  

                         Laws of Minnesota 1990 

                        CHAPTER 368-H.F.No. 1987 
           An act relating to housing; establishing a procedure 
          for the allocation of low-income housing tax credits; 
          amending Minnesota Statutes 1988, sections 462A.221, 
          by adding subdivisions; 462A.222, subdivisions 2, 3, 
          and by adding subdivisions; and 462A.223, subdivision 
          2. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 462A.221, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [ALLOCATING AGENCY.] "Allocating agency" means 
the Minnesota housing finance agency and each county and city 
that allocates reserved tax credits as provided under section 
462A.222, subdivision 1. 
    Sec. 2.  Minnesota Statutes 1988, section 462A.221, is 
amended by adding a subdivision to read: 
    Subd. 1b.  [ALLOCATION.] An "allocation" is considered to 
have been made either when Part I of Internal Revenue Service 
Form 8609, Low-Income Housing Credit Allocation Certification, 
is completed and signed by an authorized official of the 
allocating agency and mailed to the owner of the qualified 
low-income building or when the allocating agency issues a 
carryover. 
    Sec. 3.  Minnesota Statutes 1988, section 462A.221, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [COMMITMENT.] "Commitment" means a 
nontransferable, legally binding agreement between an allocating 
agency and a developer for the use of tax credits. 
    Sec. 4.  Minnesota Statutes 1988, section 462A.222, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [DETERMINATION OF REGIONAL CREDIT POOLS.] The 
agency shall divide the annual per capita amount used in 
determining the state ceiling for low-income housing tax credits 
provided under section 42 of the Internal Revenue Code of 1986, 
as amended through December 31, 1989, into a metropolitan pool 
and a greater Minnesota pool.  The metropolitan pool shall serve 
the metropolitan area as defined in section 473.121, subdivision 
2.  The greater Minnesota pool shall serve the remaining 
counties of the state.  The percentage of the annual per capita 
amount allotted to each pool must be determined as follows: 
    (a) The percentage set-aside for projects involving a 
qualified nonprofit organization as provided in section 42 of 
the Internal Revenue Code of 1986, as amended through December 
31, 1989, must be deducted from the annual per capita amount 
used in determining the state ceiling. 
    (b) Of the remaining amount, the metropolitan pool must be 
allotted a percentage equal to the metropolitan counties' 
percentage of the total number of state recipients of:  aid to 
families with dependent children, general assistance, Minnesota 
supplemental aid, and supplemental security income in the state, 
as reported annually by the department of human services.  The 
greater Minnesota pool must be allotted the amount remaining 
after the metropolitan pool's percentage has been allotted. 
    The set-aside for qualified nonprofit organizations must be 
divided between the two regional pools in the same percentage as 
determined for the credit amounts above. 
    Sec. 5.  Minnesota Statutes 1988, section 462A.222, 
subdivision 2, is amended to read: 
    Subd. 2.  [CREDIT FORMULA.] The agency shall reserve to 
each eligible city and county an a percentage amount from the 
appropriate regional pool equal to the greater of (1) the 
product obtained by:  (a) deducting from the per capita amount 
used in determining the annual state ceiling for low-income 
housing credits provided under section 42 of the Internal 
Revenue Code of 1986, a percentage portion of the per capita 
amount equal to the percentage set-aside apportionment for 
projects involving a qualified nonprofit organization, as 
provided therein, and (b) multiplying the difference obtained in 
clause (a) by the population of the city or county, and (c) 
multiplying the product obtained under clause (b) by 1.5, or (2) 
90 percent of the total state ceiling for low-income housing 
credits, multiplied by a fraction that has as its numerator the 
number of rental units located within the city or county and 
that has as its denominator the total number of rental units 
located within the state city's or county's percentage share of 
the total population of the counties comprising the pool and 
multiplied, in 1990 by 1.25.  After calendar year 1990, the 
agency shall allocate tax credits among eligible cities and 
counties based on the distribution plan established under 
section 7.  For purposes of this subdivision, the state 
demographer shall provide population and rental unit estimates 
to the agency. 
    Sec. 6.  Minnesota Statutes 1988, section 462A.222, 
subdivision 3, is amended to read: 
    Subd. 3.  [RETURN OF RESERVED CREDITS ALLOCATION 
PROCEDURE.] Unused portions of the state ceiling for low-income 
housing credits reserved to cities and counties for allocation 
may be returned at any time to the agency for allocation.  On or 
before October 1 of each calendar year, each city and county 
acting as a housing credit agency, or the Minneapolis/Saint Paul 
housing finance board, must submit a written notice to the 
agency of the portion of the low-income housing credit ceiling 
reserved to it which has not been allocated.  The unallocated 
credit must then be allocated by the agency as provided in 
section 462A.223. (a) Projects will be awarded tax credits in 
three competitive rounds on an annual basis.  The date for 
applications for each round must be determined by the agency.  
No allocating agency may award tax credits prior to the 
application dates established by the agency. 
    (b) Each allocating agency must meet the requirements of 
section 42(m) of the Internal Revenue Code of 1986, as amended 
through December 31, 1989, for the allocation of tax credits and 
the selection of projects. 
    (c) In the first round, an allocating agency may allocate 
tax credits only to the following types of projects: 
    (1) single-room occupancy projects which are affordable by 
households whose income does not exceed 30 percent of the median 
income; 
    (2) family housing projects in which at least 75 percent of 
the units contain two or more bedrooms and at least 25 percent 
contain three or more bedrooms; 
    (3) projects in which at least 50 percent of the units are 
for mentally ill, mentally retarded, drug dependent, 
developmentally disabled, or physically handicapped persons; 
    (4) projects which preserve existing subsidized housing 
which is subject to prepayment if the use of tax credits is 
necessary to prevent conversion to market rate use; or 
    (5) projects financed by the Farmers Home Administration 
which meet statewide distribution goals. 
    (d) Before the date for applications for the second round, 
the allocating agencies other than the agency shall return all 
uncommitted and unallocated tax credits to the pool from which 
they were allocated, along with copies of any allocation or 
commitment.  In the second round, the agency shall allocate the 
remaining credits from the regional pools to projects from the 
respective regions.  
    (e) In the third round, all unallocated tax credits must be 
transferred to a unified pool for allocation by the agency on a 
statewide basis. 
    (f) Unused portions of the state ceiling for low-income 
housing tax credits reserved to cities and counties for 
allocation may be returned at any time to the agency for 
allocation. 
      Sec. 7.  Minnesota Statutes 1988, section 462A.222, is 
amended by adding a subdivision to read: 
     Subd. 4.  [DISTRIBUTION PLAN.] (a) By October 1, 1990, the 
metropolitan council, in consultation with the agency and 
representatives of local government and housing and 
redevelopment authorities, shall develop and submit to the 
agency a plan for allocating tax credits in 1991 and thereafter 
in the metropolitan area, based on regional housing needs and 
priorities. 
    (b) By October 1, 1990, the agency, in consultation with 
representatives of local government and housing and 
redevelopment authorities, shall develop a plan for allocating 
tax credits in 1991 and thereafter in greater Minnesota, based 
on regional housing needs and priorities. 
    (c) In preparing the distribution plans, the metropolitan 
council and the agency shall estimate the number of households 
in the metropolitan area and in greater Minnesota, respectively, 
who are paying more than 50 percent of their income for rent and 
the cost of providing sufficient rental or other assistance so 
that no household pays more than 50 percent of its income for 
rent.  In addition, the metropolitan council and the agency 
shall identify the nature and scope of existing programs which 
primarily serve families at 60 percent of the median income and 
individuals at 30 percent of the median income.  In preparing 
the estimate, the metropolitan council and the agency shall rely 
on existing and available data and shall report the results to 
the legislature no later than January 31, 1991. 
    Sec. 8.  Minnesota Statutes 1988, section 462A.223, 
subdivision 2, is amended to read: 
    Subd. 2.  [DESIGNATED AGENCY.] The agency is designated as 
a housing credit agency to allocate the portion of the state 
ceiling for low-income housing tax credits (1) not reserved to 
cities and counties under section 462A.222; (2) not accepted for 
allocation by eligible cities and counties; (3) returned to the 
agency for allocation; and (4) not otherwise reserved to the 
agency for allocation under subdivision 1.  Low-income housing 
tax credits shall be allocated by the agency on a statewide 
basis as provided in section 462A.222.  The agency shall make no 
allocation for projects located within the jurisdiction of the 
cities or counties that have received tax credits under section 
462A.222, subdivision 1, except from the percentage set-aside 
for projects involving a qualified nonprofit organization as 
provided under section 42 of the Internal Revenue Code of 1986, 
as amended through December 31, 1989, until the amounts reserved 
to the cities and counties for allocation have been allocated or 
committed or returned to the agency for allocation. 
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 1 to 8 are effective the day following final 
enactment. 
    Presented to the governor March 28, 1990 
    Signed by the governor March 29, 1990, 9:42 p.m.