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HF2142 (Legislative Session 94 (2025-2026))

Income and corporate franchise taxes; second assignment of historic structure rehabilitation credit allowed, and requirements for issuing allocation certificates modified.

Related bill: SF2115

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to modify how the Historic Structure Rehabilitation Tax Credit is managed in Minnesota. Specifically, it aims to allow for a second assignment of this tax credit, making it more flexible for project developers. Additionally, it updates requirements for issuing allocation certificates related to these tax credits.

Main Provisions

  • Application Process: Developers must apply for the credit or grant before starting rehabilitation work on a project. The application will need to include specific information as prescribed by the office, and may incur a fee up to 0.5% of the qualified rehabilitation expenditures, capped at $40,000. This fee contributes to the administrative costs and the preparation of an economic impact report.

  • Allocation Certificates: Upon approval, allocation certificates will be issued to developers. These certificates confirm eligibility for the credit or grant and indicate the anticipated amounts (the credit being 100% of the federal credit anticipated, whereas the grant is 90%).

  • Flexibility in Credit Amounts: The bill accommodates changes in the credit amount based on the actual federal credit received when the project is completed.

  • Disbursement of Credits: The credits or grants are allocated according to the state’s fiscal year, with recipients entitled to one-fifth of the total amount at the project's completion, as long as the completion is within three years of the certificate's issue date.

  • Eligibility Determination: The office, together with the commissioner, makes the eligibility determination, which is subject to review and audit.

  • Challenge Process: If a developer disagrees with the eligibility decision, they have 45 days to initiate a contested case under chapter 14.

Significant Changes to Existing Law

  • The bill introduces flexibility by allowing for a second assignment of the tax credit.
  • It modifies the issuance of the allocation certificates to reflect changes in the anticipated federal credit after the project is completed.
  • The federal credit recapture and repayment requirements do not apply to this state credit, reducing the burden on developers.

Relevant Terms

historic structure rehabilitation, tax credit, allocation certificate, credit assignment, federal credit, application fee, project developer, economic impact report, administrative expenses, internal revenue code, contingent repayment, audit, contested case.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "New conditions under which allocation certificates may be issued."
      ],
      "removed": [
        "Does not remove any specific statute language but modifies existing structures."
      ],
      "summary": "This bill amends statute section 290.0681 to modify the application and allocation process for the historic structure rehabilitation tax credit.",
      "modified": [
        "Alters the way credit and grant eligibility are verified and issued."
      ]
    },
    "citation": "290.0681"
  }
]

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