760 CMR, § 54.02
For purposes of 760 CMR 54.00., the following terms have the following meanings, unless the context requires otherwise:
Act. M.G.L. c. 23B, § 3, M.G.L. c. 62, § 6I and M.G.L. c. 63, § 31H.
Allocation of Massachusetts Credit. The award by the Department of the authorized Massachusetts low-income housing tax credit among qualified Massachusetts projects.
Allotment. In the case of a qualified Massachusetts project owned by an unincorporated flow through entity, such as a partnership, limited liability company or joint venture, the share or portion of credit allocated to the qualified Massachusetts project that, consistent within and subject to 760 CMR 54.06, may be claimed by a taxpayer who is designated a member or partner of such entity or by a transferee of such member or partner.
Approved Donation Percentage. A percentage of a qualified donation's value approved by the department in connection with an allocation of donation LIHTC, not to exceed 50%; provided, however, that the department may increase the approved donation percentage to not more than 65% of the qualified donation's value if the department deems the increase to be necessary to the project's viability and determines that there is sufficient Massachusetts low-income housing tax credit available to permit such an increase, subject to 760 CMR 54.04(3).
Authorization Ceiling.
(a) for preservation LIHTC, $5,000,000 until January 1, 2025, and, thereafter, such greater or lesser amount as may be specifically authorized by statute; and
(b) for all other standard LIHTC and donation LIHTC, $20,000,000 until January 1, 2025, and $10,000,000 thereafter, or such greater or lesser amount as may be specifically authorized by statute.
Building Identification Number. The identification number assigned to each building in a qualified Massachusetts project by the Department.
Code. The Internal Revenue Code of 1986, as amended and in effect for the taxable year.
Commissioner. The Commissioner of Revenue.
Compliance Period. The period of 15 taxable years beginning with the first taxable year during which a qualified Massachusetts project first meets all of the requirements of 760 CMR 54.08.
Credit Period.
(a) With respect to a standard LIHTC, the five-year period during which a qualified Massachusetts project is eligible for the standard LIHTC, beginning with the taxable year in which a project meets all of the requirements of 760 CMR 54.08 and ending five years later; and
(b) with respect to a donation LIHTC, the taxable year in which the qualified donation is made to the DTC sponsor.
Department. The Department of Housing and Community Development.
Donation LIHTC or DTC. Massachusetts low-income housing tax credit allocated by the Department for a qualified donation.
DTC Sponsor. For purposes of the donation LIHTC, a nonprofit organization which:
(a) has been issued a ruling from the United States Internal Revenue Service that the organization is exempt from income taxation pursuant to Internal Revenue Code § 501(c)(3);
(b) has material control over the operations of a qualified Massachusetts project; and
(c) either:
1 is a certified Community Development Corporation as defined in M.G.L. c. 40H;
2 is a certified Community Housing Development Organization pursuant to 24 CFR § 92.2; or
3. is determined by the Department to have a history of successful development of affordable housing projects in the Commonwealth. The department may if it chooses:
a. Establish through guidance additional qualifications for DTC sponsors,
b. grant preference in the selection process to potential DTC sponsors who have been prequalified; or
c. limit submissions to such prequalified DTC sponsors; or
d. make its selection directly from an existing pool of prequalified DTC sponsors.
Eligibility Statement. A statement authorized and issued by the Department certifying that a given project is a qualified Massachusetts project and setting forth the annual amount of the Massachusetts low-income housing tax credit allocated to the project. The Department shall only allocate tax credit to qualified Massachusetts projects consisting of one or more buildings that are all placed in service on or after January 1, 2001.
Federal Carryover Allocation. Federal carryover allocation of a tax credit where a federal low-income housing tax credit is allocated under Internal Revenue Code § 42(h)(1)(E) or (F) prior to the calendar year in which the buildings comprising the project are placed in service.
Federal Low-income Housing Tax Credit. The federal tax credit as provided in Internal Revenue Code § 42.
Low Income Project. A qualified low-income housing project, as defined in Internal Revenue Code § 42(g)(1), which has restricted rents that do not exceed 30% of the applicable imputed income limitation under Internal Revenue Code § 42, for:
(a) at least 40% of its units occupied by persons or families having incomes of 60% or less of the median income;
(b) at least 20% of its units occupied by persons or families having incomes of 50% or less of the median income; or
(c) at least 40% of its units occupied by persons or families having incomes at designated imputed income limitations, so long as the average of the imputed income limitations does not exceed 60% of the area median income at restricted rent levels corresponding to the designated income limitations. The taxpayer shall designate the imputed income limitation of each unit taken into account under 760 CMR 54.02: Low Income Project (c). Without limitation, the Department may restrict the permitted number of designated income tiers or income levels.
760 CMR 54.02: Low Income Project (c) may only be used if approved by the Department, consistent with any Department administrative guidelines.
Massachusetts Low-income Housing Tax Credit. Massachusetts Low-income Housing Tax Credit shall include both donation LIHTC and standard LIHTC.
Material Control. With respect to a DTC sponsor receiving a qualified donation, will be satisfied if after receiving the qualified donation the DTC sponsor is the owner of the project, or holds a controlling interest in the entity that is the owner of the project, or is the managing general partner, or holds a controlling interest in the entity that is the managing general partner, of a limited partnership that is the owner of the project; or is the managing member, or holds a controlling interest in the entity that is the managing member, of the limited liability company that is the owner of the project. The department may, in its discretion, determine that material control exists under other circumstances on a case by case basis.
Median Income. The area median gross income as such term is used in Internal Revenue Code § 42, and which is determined under United States Department of Housing and Urban Development guidelines and adjusted for family size.
Placed in Service. This term shall have the same meaning as the term is given under Internal Revenue Code § 42 and 26 CFR § 1.42, et seq.
Preservation LIHTC. The Massachusetts low-income housing tax credit allocated by the Department for the preservation and improvement of existing state or federally-assisted housing, pursuant to M.G.L. c. 62, § 6I(b)(1) and M.G.L. c. 63, § 31H(b)(1).
Qualified Donation. An interest in real or personal property given to a DTC sponsor for the use of purchasing, constructing or rehabilitating a qualified Massachusetts project. If such interest in real or personal property is transferred to a DTC sponsor for consideration of less than its market value, the difference between the market value and the consideration paid, as determined by the department, shall constitute the amount of the qualified donation with respect to such property. Without limitation, property that may be donated includes fee and/or leasehold interests in real property, partnership interests in a limited partnership owning a qualified Massachusetts project, and membership interests in a limited liability company owning a qualified Massachusetts project.
Qualified Massachusetts Project. A low-income project located in the Commonwealth which meets the requirements of M.G.L. c. 23B, § 3, M.G.L. c. 62, § 6I and M.G.L. c. 63, § 31H and whose owner enters into a regulatory agreement.
Regulatory Agreement. An agreement between the owner of a qualified Massachusetts project and the Department recorded as an affordable housing restriction under M.G.L. c. 184 with the registry of deeds or the registry district of the land court in the county where the project is located that requires the project to be operated in accordance with the requirements of 760 CMR 54.00, and M.G.L. c. 23B, § 3, M.G.L. c. 62, § 6I and M.G.L. c. 63, § 31H for not less than 30 years from the expiration date of the compliance period. When a qualified donation is being made with respect to a qualified Massachusetts project, the regulatory agreement must be recorded prior to or concurrent with the qualified donation.
Standard LIHTC. Massachusetts low-income housing tax credit other than donation LIHTC. Standard LIHTC shall include Preservation LIHTC.
Taxpayer. Any person, firm, or other entity subject to the personal income tax under the provisions of M.G.L. c. 62, or any corporation subject to an excise under the provisions of M.G.L. c. 63.
Value. With respect to a qualified donation, means the as-is, as-restricted value prior to the qualified donation, as determined by an independent appraisal commissioned by the department and paid for by the applicant for a donation LIHTC, and subject to such additional standards as may be issued by the department in guidance.
760 CMR, § 54.02