Code of Massachusetts Regulations › 760 CMR - HOUSING AND LIVABLE COMMUNITIES, EXECUTIVE OFFICE OF › Title 760 CMR 54.00 - Massachusetts Low-Income Housing Tax Credit Program › Section 54.02 - Definitions

Current through Register 1525, July 5, 2024
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.