Section 346-35-6 - Recapturea. MaineHousing may recapture State Credit in accordance with this section if any one or more of the following occurs: i. For a Qualified Maine Project, failure to comply with any one or more of the following as determined in accordance with Section 42(g) of the Code;1. The applicable income limitation on any of the Credit Units;2. The next available unit rule; or3. The rent restriction on any of the Credit Unitsii. For a Qualified Rural Development Preservation Project, a notice of violation or default of the Rural Development financing or rental assistance contract for the project that is not cured within any cure period specified by Rural Development in the notice, as may be extended by Rural Development;iii. Failure to maintain the project in a safe, decent, sanitary condition and in good repair in accordance with UPCS;iv. Disposition of the project through sale, foreclosure, deed-in-lieu of foreclosure, or otherwise unless the project continues to be a Credit-qualified Affordable Housing Project;v. Failure to comply with the minimum election made by Owner pursuant Section 42(g)(1) of the Code or the project otherwise fails to qualify as an Affordable Housing Project, as determined by MaineHousing;vi. Loss of the project, any of the Credit Units, or any required amenities included in the eligible basis of the project that MaineHousing determines are essential to the operation of the project through damage, destruction, eminent domain, condemnation, or other action or event;vii. Dissolution, liquidation, termination of existence, insolvency, or business failure of or assignment for the benefit of creditors by Owner;viii. Any bankruptcy, receivership, reorganization, arrangement, insolvency, dissolution, or liquidation proceeding, or any other proceedings for the relief of debtors, under the U.S. Bankruptcy Code or any similar law, state or federal, whether now or hereafter existing, is instituted by or against Owner; orix. Any other action or event that results in the project no longer being maintained as a Credit-qualified Affordable Housing Project. The event of noncompliance in the above clause iv. of this subsection if the project will not continue to be a Credit-qualified Affordable Housing Project and the events of noncompliance in the above clauses v. through ix. of this subsection are considered egregious noncompliance for purposes of this section.
b. MaineHousing will not recapture State Credit for any noncompliance that is corrected by Owner before MaineHousing discovers the noncompliance.c. MaineHousing will give Owner written notice of noncompliance and a reasonable period of time established by MaineHousing to correct the noncompliance. The notice will specify each event of noncompliance and the period of time for correcting the noncompliance, which may be different for each event. The period of time for correcting an event of noncompliance may be extended by MaineHousing. Any extension will be written and provide the reason for the extension.d. If all of the events of noncompliance specified in the notice are corrected within their respective correction periods, MaineHousing will not recapture State Credit.e. If any of the events of noncompliance specified in the notice are not corrected within the respective period for correcting the noncompliance, MaineHousing will recapture State Credit. Except for egregious noncompliance set forth in subsection a. above, MaineHousing will defer recapture of the State Credit until the earliest of: i. The end of the Compliance Period;ii. Disposition of the project through sale, foreclosure, deed-in-lieu of foreclosure, or otherwise;iii. Transfer of any interest in Owner that must be approved by MaineHousing pursuant to the MaineHousing Transfers of Ownership Interests Rule;iv. MaineHousing determines there is a pattern of uncorrected noncompliance by the Owner; orv. Any egregious noncompliance set forth in subsection a. above.f. The amount of the recapture of State Credit will be calculated when it is collected as follows:i. The amount of recapture is the difference between (a) the total State Credit allocated to the project and (b) an amount equal to the product of the total State Credit allocated to the project multiplied by a fraction, the numerator of which is the number of months the project remained a Credit-qualified Affordable Housing Project since the project was placed in service and the denominator of which is 180, which difference is then prorated in proportion to the number of Credit Units that do not remain in compliance.ii. The number of months in which the project has remained a Credit-qualified Affordable Housing Project is the Compliance Period less the period of noncompliance. The period of noncompliance is the period of time from the first day of the month in which the noncompliance first occurred, not when it was discovered, to the last day of the month in which the noncompliance is corrected. If there are multiple events of noncompliance, the period of noncompliance is the first day of the first month in which any event of noncompliance, not corrected within the applicable correction period, began to the last date of the month in which all noncompliance is corrected. If recapture is collected before the end of the Compliance Period for any egregious noncompliance or other reason that results in the project no longer being maintained as a Credit-qualified Affordable Housing Project, the period of noncompliance will also include the period beginning on the first day of the month in which MaineHousing notifies Owner that recapture is due and ending on the last day of the Compliance Period.g. MaineHousing will give Owner written notice of the recapture amount and how the recapture amount was calculated. Owner must pay the recapture amount within the period of time set forth in the notice, which will not be less than 30 days and may be extended in writing by MaineHousing. If Owner does not pay the full amount of the recapture within the required period of time, MaineHousing may lien the project for the recapture amount plus accrued interest at the pre-judgment interest rate, in effect on the date of the lien as calculated in accordance with 14 M.R.S. §1602-B, until the lien is paid in full as set forth in the State Low Income Housing Tax Credit Law.h. All notices to Owner will be sent by registered mail or certified mail, return receipt requested, to Owner's last known address and will be deemed received within three (3) business days of being mailed.99-346 C.M.R. ch. 35, § 6