462A.222 LOW-INCOME HOUSING CREDITS.
Subdivision 1. Credit reservations.
The agency shall reserve a portion of the annual state
ceiling for low-income housing credits provided under section 42 of the Internal Revenue Code
of 1986, as amended, to (1) cities with a population of at least 50,000 that have a housing and
redevelopment authority; (2) cities located in three or more counties that have a housing and
redevelopment authority; and (3) counties with a population of 100,000 or more that have a
housing and redevelopment authority. A city or county is eligible to receive a reserved portion
of the state ceiling under this subdivision if it submits a written request to the agency within 45
days after June 2, 1987, to act as a designated housing credit agency as provided in section 42
of the Internal Revenue Code of 1986, as amended. A city or county may designate its housing
and redevelopment authority as the agency to receive reserved low-income housing credits on
behalf of the city or county. The city of Minneapolis or the city of Saint Paul may designate the
Minneapolis/Saint Paul Housing Finance Board to receive reserved low-income housing credits
on behalf of each city.
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, into a metropolitan pool and
a greater Minnesota pool. The metropolitan pool shall serve the metropolitan area. 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, 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 the Minnesota
family investment program, 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.
Subd. 2. Credit formula.
The agency shall reserve to each eligible city and county a
percentage amount from the appropriate regional pool equal to the city's or county's percentage
share of the total population of the counties comprising the pool and multiplied, in 1990 by
After calendar year 1990, the agency shall allocate tax credits among eligible cities and counties
based on the distribution plan established under subdivision 4. For purposes of this subdivision,
the state demographer shall provide population estimates to the agency.
Subd. 3. Allocation procedure.
(a) Projects will be awarded tax credits in two 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) For projects that are eligible for an allocation of credits pursuant to section 42(h)(4) of
the Internal Revenue Code of 1986, as amended, tax credits may only be allocated if the project
satisfies the requirements of the allocating agency's qualified allocation plan. For projects that are
eligible for an allocation of credits pursuant to section 42(h)(4) of the Internal Revenue Code of
1986, as amended, for which the agency is the issuer of the bonds for the project, or the issuer of
the bonds for the project is located outside the jurisdiction of a city or county that has received
reserved tax credits, the applicable allocation plan is the agency's qualified allocation plan.
(d) For applications submitted for the first round, an allocating agency may allocate tax
credits only to the following types of projects:
(1) in the metropolitan area:
(i) new construction or substantial rehabilitation of projects in which, for the term of the
extended use period, at least 75 percent of the total tax credit units are single-room occupancy,
efficiency, or one bedroom units and which are affordable by households whose income does
not exceed 30 percent of the median income;
(ii) new construction or substantial rehabilitation family housing projects that are not
restricted to persons who are 55 years of age or older and in which, for the term of the extended
use period, at least 75 percent of the tax credit units contain two or more bedrooms and at least
one-third of the 75 percent contain three or more bedrooms; or
(iii) substantial rehabilitation projects in neighborhoods targeted by the city for revitalization;
(2) outside the metropolitan area, projects which meet a locally identified housing need and
which are in short supply in the local housing market as evidenced by credible data submitted
with the application;
(3) projects that are not restricted to persons of a particular age group and in which, for the
term of the extended use period, a percentage of the units are set aside and rented to persons:
(i) with a serious and persistent mental illness as defined in section
245.462, subdivision 20
(ii) with a developmental disability as defined in United States Code, title 42, section 6001,
paragraph (5), as amended through December 31, 1990;
(iii) who have been assessed as drug dependent persons as defined in section
, and are receiving or will receive care and treatment services provided by an
approved treatment program as defined in section
254A.02, subdivision 2
(iv) with a brain injury as defined in section
256B.093, subdivision 4
, paragraph (a); or
(v) with permanent physical disabilities that substantially limit one or more major life
activities, if at least 50 percent of the units in the project are accessible as provided under
Minnesota Rules, chapter 1340;
(4) projects, whether or not restricted to persons of a particular age group, which preserve
existing subsidized housing, if the use of tax credits is necessary to prevent conversion to market
rate use or to remedy physical deterioration of the project which would result in loss of existing
federal subsidies; or
(5) projects financed by the Farmers Home Administration, or its successor agency, which
meet statewide distribution goals.
(e) Before the date for applications for the final round, the allocating agencies other than the
agency shall return all uncommitted and unallocated tax credits 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.
(g) If an allocating agency determines, at any time after the initial commitment or allocation
for a specific project, that a project is no longer eligible for all or a portion of the low-income
housing tax credits committed or allocated to the project, the credits must be transferred to the
agency to be reallocated pursuant to the procedures established in paragraphs (e) to (g); provided
that if the tax credits for which the project is no longer eligible are from the current year's annual
ceiling and the allocating agency maintains a waiting list, the allocating agency may continue to
commit or allocate the credits until not later than the date of applications for the final round, at
which time any uncommitted credits must be transferred to the agency.
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.
The agency may amend the distribution plan after consultation with the Metropolitan Council,
representatives of local governments, and housing and redevelopment authorities.
(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. The agency
may amend the distribution plan after consultation with representatives of local governments
and housing and redevelopment authorities.
(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.
History: 1987 c 350 s 13; 1988 c 542 s 6; 1990 c 368 s 4-7; 1990 c 552 s 1; 1991 c 292 art
9 s 33; 1993 c 164 s 3; 1994 c 586 s 9; 1996 c 362 s 1-4; 1998 c 389 art 14 s 5; 1999 c 159 s
131; 1999 c 211 s 13; 1Sp2001 c 4 art 4 s 32