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RESOLUTION AUTHORIZING THE CITY TO ENTER INTO A JOINT POWERS AGREEMENT WITH THE MINNESOTA HOUSING FINANCE AGENCY RELATED TO THE LOW-INCOME HOUSING TAX CREDIT PROGRAM FOR THE YEAR 2024.
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CITY PROPOSAL:
RESOLVED, that the proper City officials are hereby authorized to enter into a Joint Powers Agreement pertaining to the housing tax credit program, attached hereto as Exhibit A, with Minnesota Housing for the year 2024.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes the City of Duluth to enter into a Joint Powers Agreement (JPA) with the Minnesota Housing Finance Agency (MHFA) pursuant to which MHFA will administer the City of Duluth’s low income housing tax credits. In 2024, the City of Duluth expects to receive approximately $79,789 in tax credits. The Duluth City Council originally approved entering into a JPA with MHFA for the administration of Duluth housing tax credits in 1999.
Minnesota has designated certain counties and cities, including Duluth, as “suballocators” of housing tax credits. Between the time congress authorized the program in 1986 and up until 1998, the city independently administered the credits allocated to Duluth. During that time, the Internal Revenue Service (IRS) issued numerous regulations, clarifications, and rulings that significantly complicated the program. In 1999, MHFA and interested suballocator jurisdictions negotiated the first JPA. Because it is a time intensive responsibility to ensure compliance with IRS standards, and because smaller suballocators were having difficulty meeting all the requirements, MHFA assumed most of the administrative burden. The JPA has significantly reduced the amount of staff time and resources the City expends on the tax credit program.
This resolution approves entering into a joint agreement again for the coming year. By doing so, the City accepts the State’s Qualified Action Plan for selection of projects. City staff supports approval of the JPA.