A bill for an act
relating to taxation; establishing a Minnesota housing tax credit contribution fund;
providing a credit against the individual income tax, corporate franchise tax, and
insurance premiums for certain contributions; requiring a report; appropriating
money; amending Minnesota Statutes 2020, section 297I.20, by adding a
subdivision; proposing coding for new law in Minnesota Statutes, chapters 290;
462A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Agency" means the Minnesota Housing Finance Agency.
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(c) "Minnesota housing tax credit contribution fund" or "fund" means the fund established
in section 462A.40.
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(d) "Qualified project" means a project that qualifies for a grant or loan under section
462A.40.
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(e) "Taxpayer" means a taxpayer as defined in section 290.01, subdivision 6, or a taxpayer
as defined in section 297I.01, subdivision 16.
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(a) A taxpayer is allowed a credit against the tax imposed
under this chapter and the premiums tax under chapter 297I for contributions of no less than
$100 and no more than $5,000,000 to the Minnesota housing tax credit contribution fund.
The credit equals 90 percent of the amount the taxpayer contributed to the fund during the
taxable year.
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(b) The credit may be claimed only after certification by the agency as provided in
subdivision 3.
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(c) To receive the credit, a taxpayer must claim the credit in the manner prescribed by
the commissioner and file with the return a copy of the credit certificate issued by the agency
under subdivision 3, paragraph (c).
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(d) The taxpayer must claim the credit for the taxable year in which the contribution is
made.
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(e) If the amount of the credit under this section exceeds the taxpayer's liability for tax
under this chapter, the excess is a credit carryover to each of the ten succeeding taxable
years. The entire amount of the excess unused credit for the taxable year must be carried
first to the earliest of the taxable years to which the credit may be carried and then to each
successive year to which the credit may be carried. The amount of the unused credit that
may be added under this paragraph may not exceed the taxpayer's liability for tax, less any
credit for the current taxable year.
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(f) The contribution amount used to calculate the credit under this section may not be
used to calculate any other state income tax deduction or credit allowed by law.
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(g) For nonresidents and part-year residents, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
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(a) To qualify for the credit, a taxpayer must contribute to the
Minnesota housing tax credit contribution fund. A taxpayer may indicate that a contribution
is intended for a specific qualified project. A taxpayer is prohibited from contributing to
certain projects as provided in section 462A.40, subdivision 3.
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(b) The aggregate amount of tax credits allowed to all eligible contributors is limited to
$25,000,000 annually.
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(c) Within 30 days after a taxpayer contributes to the fund, the agency must file with
the contributing taxpayer a credit certificate statement or return any amounts to the taxpayer
as provided in this paragraph. The agency must send a copy of the credit certificate to the
commissioner of revenue. If there are insufficient credits to match the contribution, the
agency must not issue a credit certificate for the amount of the contribution for which there
are insufficient credits, and must return that amount to the taxpayer before issuing any credit
certificate.
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(d) The credit certificate must state the dollar amount of the contribution made by the
taxpayer, the date the payment was received by the fund, and indicate if the contribution
was intended for a specific qualified project.
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Credits granted to a partnership, a limited
liability company taxed as a partnership, S corporation, or multiple owners of property are
passed through to the partners, members, shareholders, or owners, respectively, pro rata to
each partner, member, shareholder, or owner based on their share of the entity's assets or
as specially allocated in their organizational documents or any other executed document,
as of the last day of the taxable year.
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(a) Credits claimed under this section are not subject to recapture.
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(b) If a grant or loan made under section 462A.40 is canceled or recaptured, the grant
or loan is returned to the housing tax credit contribution fund. The agency is not required
to return contributions to taxpayers who indicated that a contribution was intended for a
project for which the loan or grant is recaptured or canceled.
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Notwithstanding the credit certificate issued by the commissioner
of the Minnesota Housing Finance Agency under subdivision 3, the commissioner of revenue
may use any audit and examination powers under chapter 270C or 289A to the extent
necessary to verify that the taxpayer is eligible for the credit and to assess for the amount
of any improperly claimed credit.
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This section is effective for taxable years beginning after December
31, 2021.
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Minnesota Statutes 2020, section 297I.20, is amended by adding a subdivision to
read:
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A taxpayer may claim a credit against the
premiums tax imposed under this chapter equal to the amount indicated on the credit
certificate statement issued to the company under section 290.0683. If the amount of the
credit exceeds the liability for tax under this chapter, the excess is a credit carryover to each
of the ten succeeding taxable years. The entire amount of the excess unused credit for the
taxable year must be carried first to the earliest of the taxable years to which the credit may
be carried and then to each successive year to which the credit may be carried. This credit
does not affect the calculation of fire state aid under section 477B.03 and police state aid
under section 477C.03.
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This section is effective for taxable years beginning after December
31, 2021.
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The Minnesota housing tax credit contribution fund is
created as a revolving fund in the state treasury. The fund is administered by the
commissioner of the Minnesota Housing Finance Agency. Amounts contributed to the fund
are appropriated to the commissioner. The commissioner may use the amounts appropriated
to direct disbursements from the fund as loans or grants to eligible recipients as provided
in this section.
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(a) The commissioner may award
grants and loans to be used for multifamily and single family developments for persons and
families of low and moderate income. Allowable use of the funds include: gap financing,
as defined in section 462A.33, subdivision 1; new construction; acquisition; rehabilitation;
demolition or removal of existing structures; construction financing; permanent financing;
interest rate reduction