HB 5805

substitute for
House BILL NO. 5805
A bill to amend 1966 PA 346, entitled
"State housing development authority act of
1966,"
by amending section 22 (MCL 125.1422), as amended by
2012 PA 327, and by adding section 22e.
the peoplE of the state of michigan enact:
Sec. 22. The authority
possesses all powers necessary or convenient to carry out this act, including
the following powers in addition to other powers granted by other provisions of
this act:
(a) To sue and to be sued; to have a seal and to alter the
seal at pleasure; to have perpetual succession; to make and execute contracts
and other instruments necessary or convenient to the exercise of the powers of
the authority; and to make, amend, and repeal bylaws and rules.
(b) To undertake and carry out studies and analyses of housing
needs within this state and ways of meeting those needs, including data with
respect to population and family groups, the distribution of population and
family groups according to income, and the amount and quality of available
housing and its distribution according to rentals and sales prices, employment,
wages, and other factors affecting housing needs and the meeting of housing
needs; to make the results of those studies and analyses available to the
public and the housing and supply industries; and to engage in research and
disseminate information on housing.
(c) To agree and comply with conditions attached to federal
financial assistance.
(d) To survey and investigate housing conditions and needs,
both urban and rural, throughout this state and make recommendations to the
governor and the legislature regarding legislation and other measures necessary
or advisable to alleviate any existing housing shortage in this state.
(e) To establish and collect fees and charges in connection
with the sale of the authority's publications and the authority's loans,
commitments, and servicing,
services, including,
but not limited to, the reimbursement of costs of financing by the authority,
service charges, and insurance premiums as the authority determines to be
reasonable and as approved by the authority. Fees and charges shall must be determined
by the authority and shall
are not
be considered
to be interest. The authority may use any accumulated fees and charges and
interest income for achieving any of the corporate purposes of the authority,
to the extent that the fees, charges, and interest income are not pledged to
the repayment of bonds and notes of the authority or the interest on those
bonds and notes.
(f) To encourage community organizations to assist in
initiating housing projects as provided in this act.
(g) To encourage the salvage of all possible usable housing
scheduled for demolition because of highway, school, urban renewal, or other
programs by seeking authority for the sponsors of the programs to use funds
provided for the demolition of the buildings, to be allocated to those sponsors
approved by the authority to defray moving and rehabilitation costs of the
buildings.
(h) To engage and encourage research in, and to formulate
demonstration projects to develop, new and better techniques and methods for
increasing the supply of housing for persons eligible for assistance as
provided in this act; and to provide technical assistance in the development of
housing projects and in the development of programs to improve the quality of
life for all the people of this state.
(i) To make or purchase loans, including loans for condominium
units as that term is defined
in section 4 of the condominium act, 1978 PA 59, MCL 559.104, and including loans
to mortgage lenders , which that are unsecured
or the repayments of which are secured by mortgages, security interests, or
other forms of security; to purchase and enter into commitments for the
purchase of securities, certificates of deposits, time deposits, or mortgage
loans from mortgage lenders; to participate in the making or purchasing of
unsecured or secured loans and undertake commitments to make, guarantee, or
purchase unsecured or secured loans; to sell mortgages, security interests,
notes, and other instruments or obligations evidencing or securing loans,
including certificates evidencing interests in 1 or more loans, at public or
private sale; in connection with the sale of an instrument or obligation
evidencing or securing 1 or more loans, to service, guarantee payment on, or
repurchase the instrument or obligation, whether or not it is in default; to
modify or alter mortgages and security interests; to foreclose on any mortgage,
security interest, or other form of security; to finance housing units; to
commence an action to protect or enforce a right conferred upon the authority
by law, mortgage, security agreement, contract, or other agreement; to bid for
and purchase property that was the subject of the mortgage, security interest,
or other form of security, at a foreclosure or at any other sale, and to
acquire or take possession of the property. Upon acquiring or taking possession
of the property, the authority may complete, administer, and pay the principal
and interest of obligations incurred in connection with the property, and may
dispose of and otherwise deal with the property in any manner necessary or
desirable to protect the interests of the authority in the property. If the
authority or an entity that provides mortgage insurance to the authority
acquires property upon on the default of a
borrower, the authority may make a mortgage loan to a subsequent purchaser of
that property even if the purchaser does not meet otherwise applicable income
limitations and purchase price limits.
(j) To set standards for housing projects that receive loans
under this act and to provide for inspections to determine compliance with
those standards. The standards for construction and rehabilitation of mobile
homes, mobile home parks, and mobile home condominium projects shall be established jointly by the authority and
the mobile home commission, created in section 3 of the mobile home commission
act, 1987 PA 96, MCL 125.2303. However, financing standards
shall be established solely by the authority.
(k) To accept gifts, grants, loans, appropriations, or other
aid from the federal, state, or local government, from a subdivision, agency,
or instrumentality of a federal, state, or local government, or from a person,
corporation, firm, or other organization.
(l)
To acquire or contract to acquire from a person, firm, corporation,
municipality, or federal or state agency, by grant, purchase, or otherwise,
leaseholds or real or personal property, or any interest in a leasehold or real
or personal property; to own, hold, clear, improve, and rehabilitate and to
sell, assign, exchange, transfer, convey, lease, mortgage, or otherwise dispose
of or encumber any interest in a leasehold or real or personal property. This
act shall not impede the operation and effect
of local zoning, building, and housing ordinances, ordinances relating to
subdivision control, land development, or fire prevention, or other ordinances
having to do with housing or the development of housing.
(m) To procure insurance against any loss in connection with
the property and other assets of the authority.
(n) To invest, at the discretion of the authority, funds held
in reserve or sinking funds, or money not required for immediate use or
disbursement, in obligations of this state or of the United States, in
obligations the principal and interest of which are guaranteed by this state or
the United States, or in other obligations as may be approved by the state
treasurer.
(o) To promulgate rules necessary to carry out the purposes of
this act and to exercise the powers expressly granted in this act pursuant to under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(p) To enter into agreements with nonprofit housing
corporations, consumer housing cooperatives, limited dividend housing
corporations, mobile home park corporations, and mobile home park associations
that provide for regulation by the authority of the planning, development, and
management of any housing project undertaken by nonprofit housing corporations,
consumer housing cooperatives, limited dividend housing corporations, mobile
home park corporations, and mobile home park associations and that provide for
the disposition of the property and franchises of those corporations,
cooperatives, and associations.
(q) To appoint to the board of directors of a nonprofit
housing corporation, consumer housing cooperative, limited dividend housing
corporation, mobile home park corporation, or mobile home park association, a
number of new directors sufficient to constitute a majority of the board
notwithstanding other provisions of the articles of incorporation or other
provisions of law. Directors appointed under this subsection need not be
stockholders or members or meet other qualifications that may be described by
the certificate of incorporation or bylaws. In the absence of fraud or bad
faith, directors appointed under this subsection shall not be personally liable
for debts, obligations, or liabilities of the corporation or association. The
authority may appoint directors under this subsection only if 1 or more of the
following occur:
(i)
The nonprofit housing corporation, consumer housing cooperative, limited
dividend housing corporation, mobile home park corporation, or mobile home park
association has received a loan or advance, as provided for in this act, and
the authority determines that the loan or advance is in jeopardy of not being
repaid.
(ii)
The nonprofit housing corporation, consumer housing cooperative, limited
dividend housing corporation, mobile home park corporation, or mobile home park
association received a loan or advance as provided for in this act and the
authority determines that the proposed housing project for which the loan or
advance was made is in jeopardy of not being constructed.
(iii)
The authority determines that some any of the following apply:
(A) Some part
of the net income or net earnings of the nonprofit housing corporation is
inuring to the benefit of a private individual, firm, corporation, partnership,
or association. ; the authority determines that
an
(B) An unreasonable
part of the net income or net earnings of the consumer housing cooperative is
inuring to the benefit of a private individual, firm, corporation, partnership,
or association. ; or the authority determines
that some
(C) Some part
of the net income or net earnings of the limited dividend housing corporation,
in excess of that permitted by other provisions of this act, is inuring to the
benefit of a private individual, firm, corporation, partnership, or
association.
(iv)
The authority determines that the nonprofit corporation or consumer housing
cooperative is in some manner controlled by, under the direction of, or acting
in the substantial interest of a private individual, firm, corporation,
partnership, or association seeking to derive benefit or gain from, or seeking
to eliminate or minimize losses in any dealings or transactions with, the
nonprofit corporation or consumer housing cooperative. However, this This subparagraph shall apply applies to
individual cooperators in consumer housing cooperatives only in circumstances
defined by the authority in its rules.
(v)
The authority determines that the nonprofit housing corporation, consumer
housing cooperative, limited dividend housing corporation, mobile home park
corporation, or mobile home park association is in violation of the rules
promulgated under this section.
(vi)
The authority determines that the nonprofit housing corporation, consumer
housing cooperative, limited dividend housing corporation, mobile home park
corporation, or mobile home park association is in violation of 1 or more
agreements entered into with the authority that provide for regulation by the
authority of the planning, development, and management of a housing project
undertaken by the nonprofit housing corporation, consumer housing cooperative,
limited dividend housing corporation, mobile home park corporation, or mobile
home park association or that provide for the disposition of the property and
franchises of the corporation, cooperative, or association.
(r) To give
approval approve
or consent to the any
of the following:
(i) The articles of incorporation submitted to
the authority by a corporation seeking approval as a nonprofit housing
corporation, consumer housing cooperative, limited dividend housing
corporation, or mobile home park corporation under chapter 4, 5, 6, or 8. ; to give approval or consent
to the
(ii) The partnership agreement, joint venture
agreement, trust agreement, or other document of basic organization of a
limited dividend housing association under chapter 7 or mobile home park
association under chapter 9.
(s) To engage the services of private consultants on a
contract basis for rendering professional and technical assistance and advice.
(t) To lease real or personal property, to operate as the sole statewide
public housing agency, and to accept federal funds for, and
participate in, federal programs of housing assistance. As used in this subdivision,
"public housing agency" means that term as defined under 42 USC
1437a.
(u) To review and approve rental charges for
authority-financed housing projects and require whatever changes the authority
determines to be necessary. The changes shall become are effective after not less than 30 days' days after written
notice is given to the residents of the affected authority-financed housing
projects.
(v) To set forth in the various loan documents of the
authority those restrictions on the sale, conveyance by land contract, or
transfer of residential real property, housing projects, or housing units for
which a note is held by the authority and restrictions on the assumption by
subsequent purchasers of loans originated by and held by, or originated for
purchase by and held by, the authority as the authority determines to be
necessary in order to comply with requirements of federal statutes, federal rules
or regulations promulgated under 5 USC 551 to 559, state statutes, or state
rules promulgated under the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328, or to obtain and maintain the tax exempt status of
authority bonds and notes. However,
the The authority
shall not use a due on sale or acceleration clause solely for the purpose of
renegotiating the interest rate on a loan made with respect to an
owner-occupied single-family housing unit. Without limiting the authority's
power to establish other restrictions, as provided in this section, on the
sale, conveyance by land contract, or transfer of residential real property,
housing projects, or housing units for which a note is held by the authority
and the assumption by subsequent purchasers of loans made or purchased by the
authority, the authority shall provide in its loan documents relating to a
single family loan that the single family loan may be assumed by a new
purchaser only when the new purchaser qualifies under the authority income
limitations rules, unless such a restriction diminishes or precludes the
insurance or a guarantee by an agency of the federal government with respect to
the single family loan. A loan made for a mobile home that the borrower does
not intend to permanently affix to real property shall
become immediately due and payable if the mobile home is moved out of
the state. Any restrictions on conveyance by sale, conveyance by land contract,
or transfer that are authorized in this section shall apply only to loans originated by and
held by, or originated for purchase by and held by, the authority and may, at
the option of the authority, be enforced by accelerating and declaring
immediately due and payable all sums evidenced by the note held by the
authority. An acceleration and declaration of all sums to be due and payable on
conveyance by sale, land contract, or transfer is not an unreasonable restraint
on alienation. An acceleration and declaration, unless otherwise prohibited in
this subdivision, of all sums to be due and payable under this subdivision is
enforceable in any court of competent jurisdiction. This subdivision is applicable applies to secured
and unsecured loans . This subdivision is also
applicable to and
loan documents utilized in conjunction with an authority-operated
program of residential rehabilitation by an entity cooperating or participating
with the authority under section 22a(4), if the loans are originated with the
intent to sell those loans to the authority.
(w) To set forth in the various loan documents of the
authority remedies for the making of a false statement, representation, or
pretense or a material misstatement by a borrower during the loan application
process. Without limiting the authority's power to pursue other remedies, the
authority shall provide in its loan documents that, if a borrower makes a false
statement, representation, or pretense or a material misstatement during the
loan application process, the authority, at its option, may accelerate and
declare immediately due and payable all sums evidenced by the note held by the
authority. An acceleration and declaration of all sums to be due and payable as
provided in this subdivision is enforceable in any court of competent
jurisdiction. This subdivision is applicable applies to secured and unsecured loans.
(x) To collect interest on a real estate loan, the primary
security for which is not a first lien on real estate, at the rate of 15% or
less per annum on the unpaid balance. This subdivision does not impair the
validity of a transaction or rate of interest that is lawful without regard to notwithstanding this
subdivision.
(y) To encourage and engage or participate in programs to
accomplish the preservation of housing in this state available for occupancy by
persons and families of low or moderate income.
(z) To verify for the state treasurer statements submitted by
a city, village, township, or county as to exempt properties under section 7d
of the general property tax act, 1893 PA 206, MCL 211.7d.
(aa) For the purpose of more effectively managing its debt
service, to enter into an interest rate exchange or swap, hedge, or similar
agreement with respect to its bonds or notes on the terms and payable from the
sources and with the security, if any, as determined by a resolution of the
authority.
(bb) To make working capital loans to contractors or
subcontractors on housing projects financed by the authority. The authority
shall submit an annual report to the legislature containing the amount,
recipient, duration, circumstance, and other related statistics for each
capital loan made to a contractor or subcontractor under this subdivision. The
authority shall include in the report statistics related to the cost of
improvements made to adapt property for use by disabled individuals as provided
in section 32b or 44.
(cc) Subject to rules of the civil service commission, to
adopt a code of ethics with respect to its employees that requires disclosure
of financial interests, defines and precludes conflicts of interest, and
establishes reasonable post-employment restrictions for a period of up to 1
year after an employee terminates employment with the authority.
(dd) To impose covenants running with the land in order to
satisfy requirements of applicable federal law with respect to housing assisted
or to be assisted through federal programs such as the low income housing tax
credit program or the home investment partnerships program. These covenants shall be imposed by executing and recording
regulatory agreements between the authority, or a municipality or other entity
designated by the authority, and the person or entity to be bound. The covenants shall run
with the land and be effective with respect to the parties making the covenants
and other intended beneficiaries of the covenants, even though there is no
privity of estate or privity of contract between the authority and the persons
or entities to be bound.
(ee) To impose covenants running with the land in order to
satisfy requirements of applicable state or federal law with respect to housing
financed by the authority. These covenants shall be imposed by executing and recording
regulatory agreements between the authority and the person or entity to be
bound. The covenants shall
run with the land and be effective with respect to the parties making
the covenants and other intended beneficiaries of the covenants, even though
there is no privity of estate or privity of contract between the authority and
the persons or entities to be bound. With respect to any applicable
environmental laws, this subdivision does not grant to the authority any additional
rights, privileges, or immunities not otherwise afforded to a private lender
that is not in the chain of title for the land.
(ff) To participate in programs designed to assist persons and
families whose incomes do not exceed 115% of the greater of statewide median
gross income or the area median gross income become homeowners where loans are
made by private lenders for purchase by the government national mortgage
association, federal national mortgage association, federal home loan mortgage
corporation, or other federally chartered organizations. Participation may
include providing or funding homeownership counseling and providing some or all
of a reserve fund to be used to pay for losses in excess of insurance coverage.
(gg) To invest, under the conditions prescribed in this
subdivision and without the consent of the escrow depositors, up to 20% of
funds held, by or for the authority, in escrow accounts for the benefit of the
authority or mortgagors of authority-financed housing. The investments under
this subdivision shall be made in loans
originated or purchased by the authority for construction or rehabilitation of
multifamily housing developments for occupancy by persons or families without
regard to income. In connection with loans described in this subdivision, the
authority may charge and retain fees in amounts similar to those charged with
respect to similar loans for which the source of funding does not come from
escrow accounts. For purposes of this subdivision, "escrow account"
means any account or reserve held by the authority and established in a
mortgage or a regulatory agreement to which the authority is a party or which
has been assigned to the authority. However, for For purposes of this subdivision, escrow account
does not include any account labeled in the associated regulatory agreement as
"development cost escrow principal" or "operating assurance
reserve". For purposes of this subdivision, "multifamily housing
development" means a development in which not less than 50% of the floor
space is used primarily for residential purposes. The investment authorized by
this subdivision shall must not be made
unless both of the following requirements are met:
(i)
The return on the loan is approximately equivalent to that which could be
obtained from investments of substantially similar credit quality and maturity,
as determined by the authority.
(ii)
The authority agrees to pay with its own funds the principal balance of any
loan, made with the escrow funds, that becomes delinquent in excess of 30 days.
This subdivision does not obligate the authority to purchase a delinquent loan
so long as with respect to that loan the authority pays to the escrow funds
from its own funds the amount of the delinquent payments. The authority's
election to pay the delinquent payments to the escrow funds does not in any
manner abate or cure the delinquency of the loan and the authority may resort
to any remedies that would exist in the absence of that payment.
(hh) To acquire, develop, rehabilitate, own, operate, and
enter into contracts with respect to the management and operation of real and
personal property to use as office facilities by the authority and to enter
into leases with respect to facilities not immediately necessary for the
activities of the authority.
(ii) To make loans to certain qualified buyers and resident
organizations and to make grants to resident organizations as provided in the
following:
(i)
The urban homestead act, 1999 PA 127, MCL 125.2701 to 125.2709.
(ii)
The urban homesteading on vacant land act, 1999 PA 129, MCL 125.2741 to
125.2748.
(iii)
The urban homesteading in single-family public housing act, 1999 PA 128, MCL
125.2761 to 125.2770.
(iv)
The urban homesteading in multifamily public housing act, 1999 PA 84, MCL
125.2721 to 125.2734.
(jj) To implement and administer a housing and community
development program as described in this act.
(kk) To implement, administer, or execute administrative,
substantive, or supervisory powers pursuant to under the individual or family development
account program act, 2006 PA 513, MCL 206.901 to 206.911.
(ll) To establish, implement, and administer the housing
opportunity tax credit program under section 22e.
Sec. 22e. (1) The
authority, in cooperation with the department of treasury, shall establish,
implement, and administer a housing opportunity tax credit program to encourage
the development of qualified projects in this state.
(2) For award cycles beginning on and after January 1, 2027, the
authority shall, in conjunction with applications received under section 22b,
accept applications for housing opportunity tax credits under this section.
Subject to the award cycle cap under subsection (4) and the limitations under
this section, the authority shall not issue an award for an annual housing
opportunity tax credit under this program for a qualified project that exceeds
the lesser of the following:
(a) The amount necessary for the financial feasibility of the qualified
project.
(b) The adjusted annual federal credit amount for the qualified project.
(3) A person seeking a housing opportunity tax credit under this section
shall submit an application in a form and manner as prescribed by the
authority. The authority shall review completed applications for housing
opportunity tax credits received for 4% qualified projects on a first-come,
first-served basis. The authority shall treat all complete applications
received on the same day as having been received simultaneously. If the
applications received for 4% qualified projects exceed the portion of the award
cycle cap set aside under subsection (4)(b) and (c) on any day, the authority shall
establish an evaluation methodology to determine which of the 4% qualified
projects applications are approved and issued an award of a housing opportunity
tax credit. The evaluation methodology required under this subsection must be
limited to factors that maximize efficient unit production, including, but not
limited to, each of the following:
(a) The amount of the housing opportunity tax credit requested for each unit
under the proposed qualified project.
(b) The number of units to be preserved or created under the proposed
qualified project.
(c) The estimated development period of the proposed qualified project
from the initial award to placing the proposed qualified project in service.
(4) For the 2027 award cycle, the authority shall not allocate a total
of more than the base annual amount of $42,000,000.00 for housing opportunity
tax credits under this section. For each award cycle after the 2027 award cycle,
to determine the award cycle cap for that award cycle, the base annual amount for
the immediately preceding award cycle must be adjusted annually by the
percentage increase in the United States Consumer Price Index for the
immediately preceding calendar year. The total amount of all housing
opportunity tax credits for which an award is issued under this section must
not exceed the award cycle cap for any award cycle. For each application
window, the authority shall approve and allocate not less than 45% of the award
cycle cap for that award cycle to qualified projects to the extent that the authority
receives a sufficient number of applications. If, at the end of an application window,
the authority has not received a sufficient number of completed applications to
allocate the amount set aside under subdivision (a), (b), (c), or (d), the authority
may reapportion the unallocated credit amounts to other qualified projects in accordance
with the qualified allocation plan or an alternative competitive process.
Except as otherwise provided under this subsection, the amount of the award
cycle cap allocable for each award cycle must be set aside as follows:
(a) Up to 50% to any qualified project at the authority's discretion.
(b) Not less than 25% must be available during the application window to
4% qualified projects that are new construction.
(c) Not less than 25% must be available during the application window to
4% qualified projects that are preservation.
(d) Not less than 30% of the amounts set aside under subdivisions (a)
through (c) to qualified projects that are located in a rural area.
(5) If the authority approves an application for a housing opportunity
tax credit, the authority shall send a binding reservation letter of
eligibility to the applicant that states the amount of the housing opportunity tax
credit awarded for each year of the qualified project's credit period. The
reservation letter must clearly stipulate that the housing opportunity tax credit
awarded is contingent on the authority's approval of a final cost certification
and the issuance of an eligibility statement. On completion of a qualified
project, the owner shall submit a final cost certification and a request for
the issuance of an eligibility statement to the authority. On approval of the
final cost certification, the authority shall issue an eligibility statement to
the owner for the qualified project. The eligibility statement must state the
amount of the housing opportunity tax credit that may be claimed against an
applicable tax each year of the credit period.
(6) If an owner that has been awarded a housing opportunity tax credit
for a qualified project under this section is a flow-through entity, the owner
may, in a form and manner as prescribed by the authority, allocate all or a
portion of the housing opportunity tax credit attributable to that qualified
project to some or all of its members, including any not-for-profit entity that
is a member, in any manner agreed to by its members, regardless of whether that
member is allocated or allowed any portion of any federal low-income housing
tax credit with respect to the same qualified project, whether the allocation
of the housing opportunity tax credit under the terms of the agreement has
substantial economic effect within the meaning of section 704(b) of the internal
revenue code, 26 USC 704, and whether the member is deemed a partner for
federal income tax purposes. An owner that allocates all or a portion of its
housing opportunity tax credit under this subsection shall designate a person
to serve as the designated reporter for that housing opportunity tax credit. A flow-through
entity that receives an allocation of the housing opportunity tax credit under
this subsection, either from the owner of the qualified project or from another
flow-through entity, may further allocate the housing opportunity tax credit
among some or all of its members in the same manner as the owner. A member of a
flow-through entity that is allocated or receives a pass-through of a housing
opportunity tax credit under this subsection may assign all or any part of its
interest, including its interest in the housing opportunity tax credit.
(7) The owner of a qualified project that is awarded a housing
opportunity tax credit and issued an eligibility statement shall report any
recapture event to the designated reporter, if applicable, the department of
treasury, and the authority in the same manner done for the recapture of
federal low-income housing tax credits. If the owner of the qualified project
is not the only qualified taxpayer that claimed the housing opportunity tax credit
attributable to that qualified project against an applicable tax, the
designated reporter shall also report the recapture event to each qualified
taxpayer that was allocated a housing opportunity tax credit attributable to
that same qualified project.
(8) For each calendar year of the award cycle, the designated reporter
shall do both of the following:
(a) Provide the department of treasury, in the form prescribed by the
department of treasury, an allocation report containing all of the following
information:
(i) The name,
address, and taxpayer identification number of the owner and each qualified
taxpayer that has been allocated a portion of the annual credit awarded on the
eligibility statement for that year.
(ii) The amount of
the annual credit allocated to each qualified taxpayer identified under
subparagraph (i) for that year
and the applicable tax against which the credit will be claimed.
(iii) The total of
the amounts listed for each qualified taxpayer under subparagraph (ii), demonstrating that the total does not
exceed the amount listed on the eligibility statement for that year.
(b) Notify the department of treasury of any changes to the information
reported under subdivision (a)(ii) in the time and
manner as prescribed by the department of treasury.
(9) As used in this section:
(a) "Adjusted annual federal credit amount" means 1/6 of the
aggregate amount of federal credit awarded to a qualified project over its
federal credit period.
(b) "Allocation report" means the annual report required to be
submitted to the department of treasury under subsection (8).
(c) "Applicable tax" means a tax imposed under the income tax
act of 1967, 1967 PA 281, MCL 206.1 to 206.847, or under section 476a of the
insurance code of 1956, 1956 PA 218, MCL 500.476a.
(d) "Application window" means the first quarter, January 1
through March 31, or the third quarter, July 1 through September 30, of the
award cycle. If either the first or last day of the application window falls on
a nonbusiness day, then the starting or ending date is the next business day.
(e) "Award" means a binding reservation letter of eligibility issued
by the authority for a housing opportunity tax credit attributable to a
qualified project during an award cycle, setting forth the amount of the
housing opportunity tax credit to be claimed in each year of the credit period.
(f) "Award cycle" means each calendar year over which the authority
approves and allocates housing opportunity tax credits for qualified projects.
(g) "Award cycle cap" means the sum of the following:
(i) The base annual
amount as determined under subsection (4) for each calendar year of the credit
period.
(ii) The amount, if
any, by which the award cycle cap prescribed under this section for the
preceding award cycle exceeds the total of all housing opportunity tax credits awarded
by the authority in that award cycle.
(iii) The amount of
housing opportunity credits recaptured or otherwise disallowed under subsection
(7) in the preceding calendar year or otherwise returned to the authority since
the prior award cycle.
(h) "Credit period" means the period of 6 calendar years
beginning with the calendar year in which a building that is part of a
qualified project is placed in service. If a qualified project consists of more
than 1 building, then the owner may elect to either treat all buildings as 1
project and begin the credit period when the last building is placed in service
or treat each building's credit period independently on a building-by-building
basis.
(i) "Designated reporter" means the owner of the qualified
project or the person designated by the owner under subsection (6).
(j) "Eligibility statement" means a statement issued by the
authority to the owner of a qualified project certifying that the project is a
qualified project and specifying the amount of the housing opportunity tax
credit that may be claimed each year of the credit period, the years that
comprise the credit period, the name, address, and taxpayer identification
number of the owner, the date of issuance, and any additional information
prescribed by the authority.
(k) "Federal credit period" means the 10-year period described
under section 42(f)(1) of the internal revenue code, 26 USC 42.
(l) "Federal
low-income housing tax credit" or "federal credit" means the
credit allowed under section 42 of the internal revenue code, 26 USC 42.
(m) "4% qualified project" means a qualified project that is
eligible for both of the following:
(i) A federal
low-income housing tax credit under section 42(h)(4) of the internal revenue
code, 26 USC 42.
(ii) A bond issued
under section 44c for which the authority is not the bondholder with respect to
the bond proceeds.
(n) "Flow-through entity" means an entity that for the applicable
tax year is treated as a subchapter S corporation under section 1362(a) of the
internal revenue code, 26 USC 1362, a general partnership, a trust, a limited
partnership, a limited liability partnership, or a limited liability company, and
that for the tax year is not taxed as a corporation for federal income tax
purposes. Flow-through entity does not include any entity treated as a
corporation under section 699 of the income tax act of 1967, 1967 PA 281, MCL
206.699.
(o) "Housing opportunity tax credit" means a tax credit authorized
to be claimed against an applicable tax under section 279 or 679 of the income
tax act of 1967, 1967 PA 281, MCL 206.279 and 206.679, or section 476a of the
insurance code of 1956, 1956 PA 218, MCL 500.476a, whichever is applicable.
(p) "Internal revenue code" means the United States internal
revenue code of 1986.
(q) "Member", when used in reference to a flow-through entity,
means a shareholder of a subchapter S corporation, a partner in a general
partnership, a limited partnership, or a limited liability partnership, a
member of a limited liability company, or a beneficiary of a trust that is a
flow-through entity, as long as the shareholder, partner, member, or
beneficiary, as applicable, is considered a shareholder, partner, member, or
beneficiary under applicable state law governing such flow-through entity.
(r) "New construction" means newly constructed housing units
and does not include the rehabilitation or acquisition of existing buildings or
adaptive reuse projects. New construction includes the demolition necessary for
the construction of new housing units.
(s) "Owner" means a person holding a fee simple interest in a
qualified project or a leasehold interest pursuant to a ground lease in the
land on which a qualified project is located.
(t) "Person" means an individual, bank, financial institution,
insurance company, association, corporation, flow-through entity, receiver,
estate, trust, or any other group or combination of groups acting as a unit.
(u) "Preservation" means projects that involve rehabilitation
of existing housing units or the adaptive re-use of an existing building.
(v) "Qualified project" means a qualified low-income building as
defined in section 42(c) of the internal revenue code, 26 USC 42, that is
located in this state, is eligible for the federal low-income housing tax credit,
and is placed in service on or after January 1, 2027.
(w) "Qualified taxpayer" means a taxpayer that is the owner of
a qualified project that was issued an eligibility statement for a housing
opportunity tax credit or a taxpayer included on the allocation report that
owns a direct or indirect, through the owner or 1 or more flow-through
entities, interest in a qualified project for which an eligibility statement
was issued for a housing opportunity tax credit and all or a portion of that
credit has been allocated to the taxpayer at any time prior to filing an annual
or amended return on which a housing opportunity tax credit is claimed against
an applicable tax.
(x) "Rural area" means a city, village, or township with a
population of 35,000 or less, or an area designated as rural as defined by the United
States Department of Agriculture or the United States Census Bureau.
(y) "Taxpayer" means a person subject to an applicable tax.
(z) "United States Consumer Price Index" means the United
States Consumer Price Index for all urban consumers as defined and reported by
the United States Department of Labor, Bureau of Labor Statistics.
Enacting section 1.
This amendatory act does not take effect unless all of the following bills of
the 103rd Legislature are enacted into law:
(a) House Bill No. 5101.
(b) House Bill No. 5806.
(c) House Bill No. 5807.