HF 627

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; property; providing uniform 
  1.3             rules for the low-income rental housing class; 
  1.4             reducing the class rate for apartments and 
  1.5             nonhomestead residential properties; imposing 
  1.6             penalties; authorizing rulemaking; appropriating 
  1.7             money; amending Minnesota Statutes 1996, sections 
  1.8             273.124, by adding a subdivision; 273.13, subdivision 
  1.9             25; 273.1398, subdivision 1a; 290A.03, subdivisions 11 
  1.10            and 13; 290A.19; 469.040, subdivision 3, and by adding 
  1.11            a subdivision; proposing coding for new law in 
  1.12            Minnesota Statutes, chapters 273; and 462A; repealing 
  1.13            Minnesota Statutes 1996, sections 273.1317; 273.1318; 
  1.14            and 290A.03, subdivisions 12a and 14. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1996, section 273.124, is 
  1.17  amended by adding a subdivision to read: 
  1.18     Subd. 19.  [LEASE-PURCHASE PROGRAM.] Qualifying buildings 
  1.19  and appurtenances, together with the land on which they are 
  1.20  located, are classified as homesteads, if the following 
  1.21  qualifications are met: 
  1.22     (1) the property is leased for up to a five-year period by 
  1.23  the occupant under a lease-purchase program administered by the 
  1.24  Minnesota housing finance agency or a housing and redevelopment 
  1.25  authority under sections 469.001 to 469.047; 
  1.26     (2) the occupant's income is no greater than 80 percent of 
  1.27  the county or area median income, adjusted for family size; 
  1.28     (3) the building consists of one or two dwelling units; 
  1.29     (4) the lease agreement provides that part of the lease 
  1.30  payment is escrowed as a nonrefundable down payment on the 
  2.1   housing; 
  2.2      (5) the administering agency verifies the occupant's income 
  2.3   eligibility and certifies to the county assessor that the 
  2.4   occupant meets the income standards; and 
  2.5      (6) the property owner applies to the county assessor by 
  2.6   May 30 of each year. 
  2.7      For purposes of this subdivision, "qualifying buildings and 
  2.8   appurtenances" means a one or two unit residential building 
  2.9   which was unoccupied, abandoned, and boarded for at least six 
  2.10  months.  
  2.11     Sec. 2.  [273.126] [QUALIFYING LOW-INCOME RENTAL HOUSING.] 
  2.12     Subdivision 1.  [QUALIFYING RULES.] The market value of a 
  2.13  rental housing unit qualifies for assessment under class 4d if: 
  2.14     (1) it is occupied by individuals meeting the income limits 
  2.15  under subdivision 2; 
  2.16     (2) a rent restriction agreement under subdivision 3 
  2.17  applies; 
  2.18     (3) the unit meets the minimum housing quality standards 
  2.19  under subdivision 4; and 
  2.20     (4) the Minnesota housing finance agency certifies to the 
  2.21  local assessor that the unit qualifies. 
  2.22     Subd. 2.  [INCOME LIMITS.] (a) In order to qualify under 
  2.23  class 4d, a unit must be occupied by an individual or 
  2.24  individuals whose income is at or below 60 percent of the median 
  2.25  area gross income.  If the resident's income met the requirement 
  2.26  when the resident first occupied the unit, the income of the 
  2.27  resident continues to qualify.  If an individual first occupied 
  2.28  a unit before January 1, 1998, the individual's income for 
  2.29  purposes of the preceding sentence is the income for calendar 
  2.30  year 1996. 
  2.31     (b) For purposes of this section, "median area gross income"
  2.32  means the greater of (1) the median gross income for the area 
  2.33  determined under section 42 of the Internal Revenue Code of 
  2.34  1986, as amended through December 31, 1996, or (2) the median 
  2.35  gross income for the state. 
  2.36     (c) The median gross income must be adjusted for family 
  3.1   size. 
  3.2      (d) Vacant units qualify as meeting the requirements of 
  3.3   this subdivision in the same proportion that total units in the 
  3.4   building are subject to rent restriction agreements under 
  3.5   subdivision 3 and meet minimum housing standards under 
  3.6   subdivision 4.  This paragraph applies only to the extent that 
  3.7   units subject to a rent restriction agreement and meeting the 
  3.8   minimum housing quality standards are vacant. 
  3.9      (e) The owner or manager of the property may comply with 
  3.10  this subdivision by obtaining written statements from the 
  3.11  residents, at least annually, that their incomes are at or below 
  3.12  the limit.  
  3.13     Subd. 3.  [RENT RESTRICTIONS.] (a) In order to qualify 
  3.14  under class 4d, a unit must be subject to a rent restriction 
  3.15  agreement with the housing finance agency for a period of at 
  3.16  least five years.  The agreement must be in effect and apply to 
  3.17  the rents to be charged for the year in which the property taxes 
  3.18  are payable.  The agreement must provide that the restrictions 
  3.19  apply to each year of the period, regardless of whether the unit 
  3.20  is occupied by an individual with qualifying income or whether 
  3.21  class 4d applies.  The rent restriction agreement must provide 
  3.22  for rents for the unit to be no higher than 60 percent of the 
  3.23  median gross income.  The definition of median gross income 
  3.24  specified in this section applies.  "Rent" means "gross rent" as 
  3.25  defined in section 42(g)(2)(B) of the Internal Revenue Code of 
  3.26  1986, as amended through December 31, 1996.  
  3.27     (b) The rent restriction agreement runs with the land and 
  3.28  binds any successor to title to the property, without regard to 
  3.29  whether the successor had actual notice or knowledge of the 
  3.30  agreement.  The owner must promptly record the agreement in the 
  3.31  office of the county recorder or must file it in the office of 
  3.32  the registrar of titles, in the county where the property is 
  3.33  located.  If the agreement is not recorded, class 4d does not 
  3.34  apply to the property. 
  3.35     Subd. 4.  [MINIMUM HOUSING STANDARDS.] In order to qualify 
  3.36  under class 4d, a unit must be certified by the housing finance 
  4.1   agency to meet the minimum housing standards established under 
  4.2   section 462A.071. 
  4.3      Subd. 5.  [ADDITIONAL TAXES.] (a) Notwithstanding the 
  4.4   provisions of section 273.01, 274.01, or any other law, if the 
  4.5   Minnesota housing finance agency notifies the assessor that the 
  4.6   provisions of this section have not been met for any period 
  4.7   during which a unit was classified under class 4d, an additional 
  4.8   tax is imposed.  The additional tax equals, as certified by the 
  4.9   housing finance agency, either (1) a dollar amount, or (2) the 
  4.10  increased tax which would have been imposed if the property had 
  4.11  not been classified under class 4d, and the tax actually 
  4.12  imposed, during the period of noncompliance. 
  4.13     (b) The additional tax must be extended against the 
  4.14  property on the tax list for the current year.  No interest or 
  4.15  penalties may be levied on additional taxes if timely paid.  The 
  4.16  tax imposed by this subdivision is a lien upon the property 
  4.17  assessed to the same extent and for the same duration as other 
  4.18  taxes imposed on the property. 
  4.19     Sec. 3.  Minnesota Statutes 1996, section 273.13, 
  4.20  subdivision 25, is amended to read: 
  4.21     Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
  4.22  estate containing four or more units and used or held for use by 
  4.23  the owner or by the tenants or lessees of the owner as a 
  4.24  residence for rental periods of 30 days or more.  Class 4a also 
  4.25  includes hospitals licensed under sections 144.50 to 144.56, 
  4.26  other than hospitals exempt under section 272.02, and contiguous 
  4.27  property used for hospital purposes, without regard to whether 
  4.28  the property has been platted or subdivided.  Class 4a property 
  4.29  in a city with a population of 5,000 or less, that is (1) 
  4.30  located outside of the metropolitan area, as defined in section 
  4.31  473.121, subdivision 2, or outside any county contiguous to the 
  4.32  metropolitan area, and (2) whose city boundary is at least 15 
  4.33  miles from the boundary of any city with a population greater 
  4.34  than 5,000 has a class rate of 2.3 percent of market value for 
  4.35  taxes payable in 1996 and thereafter.  All other class 4a 
  4.36  property has a class rate of 3.4 percent of market value for 
  5.1   taxes payable in 1996, a class rate of 3.2 percent of market 
  5.2   value for taxes payable in 1998, a class rate of three percent 
  5.3   of market value for taxes payable in 1999, and a class rate of 
  5.4   2.8 percent of market value payable in 2000 and thereafter.  For 
  5.5   purposes of this paragraph, population has the same meaning 
  5.6   given in section 477A.011, subdivision 3. 
  5.7      (b) Class 4b includes: 
  5.8      (1) residential real estate containing less than four 
  5.9   units, other than seasonal residential, and recreational; 
  5.10     (2) manufactured homes not classified under any other 
  5.11  provision; 
  5.12     (3) a dwelling, garage, and surrounding one acre of 
  5.13  property on a nonhomestead farm classified under subdivision 23, 
  5.14  paragraph (b).  
  5.15     Class 4b property has a class rate of 2.8 percent of market 
  5.16  value for taxes payable in 1992, 2.5 percent of market value for 
  5.17  taxes payable in 1993, and 2.3 2.2 percent of market value for 
  5.18  taxes payable in 1994 and thereafter 1998, a class rate of 2.1 
  5.19  percent of market value for taxes payable in 1999, and two 
  5.20  percent of market value for taxes payable in 2000 and thereafter.
  5.21     (c) Class 4c property includes: 
  5.22     (1) a structure that is:  
  5.23     (i) situated on real property that is used for housing for 
  5.24  the elderly or for low- and moderate-income families as defined 
  5.25  in Title II, as amended through December 31, 1990, of the 
  5.26  National Housing Act or the Minnesota housing finance agency law 
  5.27  of 1971, as amended, or rules promulgated by the agency and 
  5.28  financed by a direct federal loan or federally insured loan made 
  5.29  pursuant to Title II of the Act; or 
  5.30     (ii) situated on real property that is used for housing the 
  5.31  elderly or for low- and moderate-income families as defined by 
  5.32  the Minnesota housing finance agency law of 1971, as amended, or 
  5.33  rules adopted by the agency pursuant thereto and financed by a 
  5.34  loan made by the Minnesota housing finance agency pursuant to 
  5.35  the provisions of the act.  
  5.36     This clause applies only to property of a nonprofit or 
  6.1   limited dividend entity.  Property is classified as class 4c 
  6.2   under this clause for 15 years from the date of the completion 
  6.3   of the original construction or substantial rehabilitation, or 
  6.4   for the original term of the loan.  
  6.5      (2) a structure that is: 
  6.6      (i) situated upon real property that is used for housing 
  6.7   lower income families or elderly or handicapped persons, as 
  6.8   defined in section 8 of the United States Housing Act of 1937, 
  6.9   as amended; and 
  6.10     (ii) owned by an entity which has entered into a housing 
  6.11  assistance payments contract under section 8 which provides 
  6.12  assistance for 100 percent of the dwelling units in the 
  6.13  structure, other than dwelling units intended for management or 
  6.14  maintenance personnel.  Property is classified as class 4c under 
  6.15  this clause for the term of the housing assistance payments 
  6.16  contract, including all renewals, or for the term of its 
  6.17  permanent financing, whichever is shorter; and 
  6.18     (3) a qualified low-income building as defined in section 
  6.19  42(c)(2) of the Internal Revenue Code of 1986, as amended 
  6.20  through December 31, 1990, that (i) receives a low-income 
  6.21  housing credit under section 42 of the Internal Revenue Code of 
  6.22  1986, as amended through December 31, 1990; or (ii) meets the 
  6.23  requirements of that section and receives public financing, 
  6.24  except financing provided under sections 469.174 to 469.179, 
  6.25  which contains terms restricting the rents; or (iii) meets the 
  6.26  requirements of section 273.1317.  Classification pursuant to 
  6.27  this clause is limited to a term of 15 years.  The public 
  6.28  financing received must be from at least one of the following 
  6.29  sources:  government issued bonds exempt from taxes under 
  6.30  section 103 of the Internal Revenue Code of 1986, as amended 
  6.31  through December 31, 1993, the proceeds of which are used for 
  6.32  the acquisition or rehabilitation of the building; programs 
  6.33  under section 221(d)(3), 202, or 236, of Title II of the 
  6.34  National Housing Act; rental housing program funds under Section 
  6.35  8 of the United States Housing Act of 1937 or the market rate 
  6.36  family graduated payment mortgage program funds administered by 
  7.1   the Minnesota housing finance agency that are used for the 
  7.2   acquisition or rehabilitation of the building; public financing 
  7.3   provided by a local government used for the acquisition or 
  7.4   rehabilitation of the building, including grants or loans from 
  7.5   federal community development block grants, HOME block grants, 
  7.6   or residential rental bonds issued under chapter 474A; or other 
  7.7   rental housing program funds provided by the Minnesota housing 
  7.8   finance agency for the acquisition or rehabilitation of the 
  7.9   building. 
  7.10     For all properties described in clauses (1), (2), and (3) 
  7.11  and in paragraph (d), the market value determined by the 
  7.12  assessor must be based on the normal approach to value using 
  7.13  normal unrestricted rents unless the owner of the property 
  7.14  elects to have the property assessed under Laws 1991, chapter 
  7.15  291, article 1, section 55.  If the owner of the property elects 
  7.16  to have the market value determined on the basis of the actual 
  7.17  restricted rents, as provided in Laws 1991, chapter 291, article 
  7.18  1, section 55, the property will be assessed at the rate 
  7.19  provided for class 4a or class 4b property, as appropriate.  
  7.20  Properties described in clauses (1)(ii), (3), and (4) may apply 
  7.21  to the assessor for valuation under Laws 1991, chapter 291, 
  7.22  article 1, section 55.  The land on which these structures are 
  7.23  situated has the class rate given in paragraph (b) if the 
  7.24  structure contains fewer than four units, and the class rate 
  7.25  given in paragraph (a) if the structure contains four or more 
  7.26  units.  This clause applies only to the property of a nonprofit 
  7.27  or limited dividend entity.  
  7.28     (4) a parcel of land, not to exceed one acre, and its 
  7.29  improvements or a parcel of unimproved land, not to exceed one 
  7.30  acre, if it is owned by a neighborhood real estate trust and at 
  7.31  least 60 percent of the dwelling units, if any, on all land 
  7.32  owned by the trust are leased to or occupied by lower income 
  7.33  families or individuals.  This clause does not apply to any 
  7.34  portion of the land or improvements used for nonresidential 
  7.35  purposes.  For purposes of this clause, a lower income family is 
  7.36  a family with an income that does not exceed 65 percent of the 
  8.1   median family income for the area, and a lower income individual 
  8.2   is an individual whose income does not exceed 65 percent of the 
  8.3   median individual income for the area, as determined by the 
  8.4   United States Secretary of Housing and Urban Development.  For 
  8.5   purposes of this clause, "neighborhood real estate trust" means 
  8.6   an entity which is certified by the governing body of the 
  8.7   municipality in which it is located to have the following 
  8.8   characteristics: 
  8.9      (a) it is a nonprofit corporation organized under chapter 
  8.10  317A; 
  8.11     (b) it has as its principal purpose providing housing for 
  8.12  lower income families in a specific geographic community 
  8.13  designated in its articles or bylaws; 
  8.14     (c) it limits membership with voting rights to residents of 
  8.15  the designated community; and 
  8.16     (d) it has a board of directors consisting of at least 
  8.17  seven directors, 60 percent of whom are members with voting 
  8.18  rights and, to the extent feasible, 25 percent of whom are 
  8.19  elected by resident members of buildings owned by the trust; and 
  8.20     (5) except as provided in subdivision 22, paragraph (c), 
  8.21  real property devoted to temporary and seasonal residential 
  8.22  occupancy for recreation purposes, including real property 
  8.23  devoted to temporary and seasonal residential occupancy for 
  8.24  recreation purposes and not devoted to commercial purposes for 
  8.25  more than 250 days in the year preceding the year of 
  8.26  assessment.  For purposes of this clause, property is devoted to 
  8.27  a commercial purpose on a specific day if any portion of the 
  8.28  property is used for residential occupancy, and a fee is charged 
  8.29  for residential occupancy.  Class 4c also includes commercial 
  8.30  use real property used exclusively for recreational purposes in 
  8.31  conjunction with class 4c property devoted to temporary and 
  8.32  seasonal residential occupancy for recreational purposes, up to 
  8.33  a total of two acres, provided the property is not devoted to 
  8.34  commercial recreational use for more than 250 days in the year 
  8.35  preceding the year of assessment and is located within two miles 
  8.36  of the class 4c property with which it is used.  Class 4c 
  9.1   property classified in this clause also includes the remainder 
  9.2   of class 1c resorts.  Owners of real property devoted to 
  9.3   temporary and seasonal residential occupancy for recreation 
  9.4   purposes and all or a portion of which was devoted to commercial 
  9.5   purposes for not more than 250 days in the year preceding the 
  9.6   year of assessment desiring classification as class 1c or 4c, 
  9.7   must submit a declaration to the assessor designating the cabins 
  9.8   or units occupied for 250 days or less in the year preceding the 
  9.9   year of assessment by January 15 of the assessment year.  Those 
  9.10  cabins or units and a proportionate share of the land on which 
  9.11  they are located will be designated class 1c or 4c as otherwise 
  9.12  provided.  The remainder of the cabins or units and a 
  9.13  proportionate share of the land on which they are located will 
  9.14  be designated as class 3a.  The first $100,000 of the market 
  9.15  value of the remainder of the cabins or units and a 
  9.16  proportionate share of the land on which they are located shall 
  9.17  have a class rate of three percent.  The owner of property 
  9.18  desiring designation as class 1c or 4c property must provide 
  9.19  guest registers or other records demonstrating that the units 
  9.20  for which class 1c or 4c designation is sought were not occupied 
  9.21  for more than 250 days in the year preceding the assessment if 
  9.22  so requested.  The portion of a property operated as a (1) 
  9.23  restaurant, (2) bar, (3) gift shop, and (4) other nonresidential 
  9.24  facility operated on a commercial basis not directly related to 
  9.25  temporary and seasonal residential occupancy for recreation 
  9.26  purposes shall not qualify for class 1c or 4c; 
  9.27     (6) (2) real property up to a maximum of one acre of land 
  9.28  owned by a nonprofit community service oriented organization; 
  9.29  provided that the property is not used for a revenue-producing 
  9.30  activity for more than six days in the calendar year preceding 
  9.31  the year of assessment and the property is not used for 
  9.32  residential purposes on either a temporary or permanent basis.  
  9.33  For purposes of this clause, a "nonprofit community service 
  9.34  oriented organization" means any corporation, society, 
  9.35  association, foundation, or institution organized and operated 
  9.36  exclusively for charitable, religious, fraternal, civic, or 
 10.1   educational purposes, and which is exempt from federal income 
 10.2   taxation pursuant to section 501(c)(3), (10), or (19) of the 
 10.3   Internal Revenue Code of 1986, as amended through December 31, 
 10.4   1990.  For purposes of this clause, "revenue-producing 
 10.5   activities" shall include but not be limited to property or that 
 10.6   portion of the property that is used as an on-sale intoxicating 
 10.7   liquor or 3.2 percent malt liquor establishment licensed under 
 10.8   chapter 340A, a restaurant open to the public, bowling alley, a 
 10.9   retail store, gambling conducted by organizations licensed under 
 10.10  chapter 349, an insurance business, or office or other space 
 10.11  leased or rented to a lessee who conducts a for-profit 
 10.12  enterprise on the premises.  Any portion of the property which 
 10.13  is used for revenue-producing activities for more than six days 
 10.14  in the calendar year preceding the year of assessment shall be 
 10.15  assessed as class 3a.  The use of the property for social events 
 10.16  open exclusively to members and their guests for periods of less 
 10.17  than 24 hours, when an admission is not charged nor any revenues 
 10.18  are received by the organization shall not be considered a 
 10.19  revenue-producing activity; 
 10.20     (7) (3) post-secondary student housing of not more than one 
 10.21  acre of land that is owned by a nonprofit corporation organized 
 10.22  under chapter 317A and is used exclusively by a student 
 10.23  cooperative, sorority, or fraternity for on-campus housing or 
 10.24  housing located within two miles of the border of a college 
 10.25  campus; and 
 10.26     (8) (4) manufactured home parks as defined in section 
 10.27  327.14, subdivision 3. 
 10.28     Class 4c property has a class rate of 2.3 percent of market 
 10.29  value, except that (i) for each parcel of seasonal residential 
 10.30  recreational property not used for commercial purposes under 
 10.31  clause (5) (1) the first $72,000 of market value on each parcel 
 10.32  has a class rate of 1.75 percent for taxes payable in 1997 and 
 10.33  1.5 percent for taxes payable in 1998 and thereafter, and the 
 10.34  market value of each parcel that exceeds $72,000 has a class 
 10.35  rate of 2.5 percent, and (ii) manufactured home parks assessed 
 10.36  under clause (8) (4) have a class rate of two percent for taxes 
 11.1   payable in 1996, and thereafter.  
 11.2      (d) Class 4d property includes: 
 11.3      (1) a structure that is: 
 11.4      (i) situated on real property that is used for housing for 
 11.5   the elderly or for low and moderate income families as defined 
 11.6   by the Farmers Home Administration; 
 11.7      (ii) located in a municipality of less than 10,000 
 11.8   population; and 
 11.9      (iii) financed by a direct loan or insured loan from the 
 11.10  Farmers Home Administration.  Property is classified under this 
 11.11  clause for 15 years from the date of the completion of the 
 11.12  original construction or for the original term of the loan.  
 11.13     The class rates in paragraph (c), clauses (1), (2), and (3) 
 11.14  and this clause apply to the properties described in them, only 
 11.15  in proportion to occupancy of the structure by elderly or 
 11.16  handicapped persons or low and moderate income families as 
 11.17  defined in the applicable laws unless construction of the 
 11.18  structure had been commenced prior to January 1, 1984; or the 
 11.19  project had been approved by the governing body of the 
 11.20  municipality in which it is located prior to June 30, 1983; or 
 11.21  financing of the project had been approved by a federal or state 
 11.22  agency prior to June 30, 1983.  For those properties, 4c or 4d 
 11.23  classification is available only for those units meeting the 
 11.24  requirements of section 273.1318. 
 11.25     Classification under this clause is only available to 
 11.26  property of a nonprofit or limited dividend entity. 
 11.27     In the case of a structure financed or refinanced under any 
 11.28  federal or state mortgage insurance or direct loan program 
 11.29  exclusively for housing for the elderly or for housing for the 
 11.30  handicapped, a unit shall be considered occupied so long as it 
 11.31  is actually occupied by an elderly or handicapped person or, if 
 11.32  vacant, is held for rental to an elderly or handicapped person. 
 11.33     (2) For taxes payable in 1992, 1993, and 1994, only, 
 11.34  buildings and appurtenances, together with the land upon which 
 11.35  they are located, leased by the occupant under the community 
 11.36  lending model lease-purchase mortgage loan program administered 
 12.1   by the Federal National Mortgage Association, provided the 
 12.2   occupant's income is no greater than 60 percent of the county or 
 12.3   area median income, adjusted for family size and the building 
 12.4   consists of existing single family or duplex housing.  The lease 
 12.5   agreement must provide for a portion of the lease payment to be 
 12.6   escrowed as a nonrefundable down payment on the housing.  To 
 12.7   qualify under this clause, the taxpayer must apply to the county 
 12.8   assessor by May 30 of each year.  The application must be 
 12.9   accompanied by an affidavit or other proof required by the 
 12.10  assessor to determine qualification under this clause. 
 12.11     (3) Qualifying buildings and appurtenances, together with 
 12.12  the land upon which they are located, leased for a period of up 
 12.13  to five years by the occupant under a lease-purchase program 
 12.14  administered by the Minnesota housing finance agency or a 
 12.15  housing and redevelopment authority authorized under sections 
 12.16  469.001 to 469.047, provided the occupant's income is no greater 
 12.17  than 80 percent of the county or area median income, adjusted 
 12.18  for family size, and the building consists of two or less 
 12.19  dwelling units.  The lease agreement must provide for a portion 
 12.20  of the lease payment to be escrowed as a nonrefundable down 
 12.21  payment on the housing.  The administering agency shall verify 
 12.22  the occupants income eligibility and certify to the county 
 12.23  assessor that the occupant meets the income criteria under this 
 12.24  paragraph.  To qualify under this clause, the taxpayer must 
 12.25  apply to the county assessor by May 30 of each year.  For 
 12.26  purposes of this section, "qualifying buildings and 
 12.27  appurtenances" shall be defined as one or two unit residential 
 12.28  buildings which are unoccupied and have been abandoned and 
 12.29  boarded for at least six months is qualifying low-income rental 
 12.30  housing certified to the assessor by the housing finance agency 
 12.31  under sections 273.126 and 462A.071.  Class 4d includes land in 
 12.32  proportion to the total market value of the building that is 
 12.33  qualifying low-income rental housing.  For all properties 
 12.34  qualifying as class 4d, the market value determined by the 
 12.35  assessor must be based on the normal approach to value using 
 12.36  normal unrestricted rents. 
 13.1      Class 4d property has a class rate of two 1.5 percent of 
 13.2   market value except that property classified under clause (3), 
 13.3   shall have the same class rate as class 1a property. 
 13.4      (e) Residential rental property that would otherwise be 
 13.5   assessed as class 4 property under paragraph (a); paragraph (b), 
 13.6   clauses (1) and (3); paragraph (c), clause (1), (2), (3), or 
 13.7   (4), is assessed at the class rate applicable to it under 
 13.8   Minnesota Statutes 1988, section 273.13, if it is found to be a 
 13.9   substandard building under section 273.1316.  Residential rental 
 13.10  property that would otherwise be assessed as class 4 property 
 13.11  under paragraph (d) is assessed at 2.3 percent of market value 
 13.12  if it is found to be a substandard building under section 
 13.13  273.1316. 
 13.14     (f) (e) Class 4e property consists of the residential 
 13.15  portion of any structure located within a city that was 
 13.16  converted from nonresidential use to residential use, provided 
 13.17  that: 
 13.18     (1) the structure had formerly been used as a warehouse; 
 13.19     (2) the structure was originally constructed prior to 1940; 
 13.20     (3) the conversion was done after December 31, 1995, but 
 13.21  before January 1, 2003; and 
 13.22     (4) the conversion involved an investment of at least 
 13.23  $25,000 per residential unit. 
 13.24     Class 4e property has a class rate of 2.3 percent, provided 
 13.25  that a structure is eligible for class 4e classification only in 
 13.26  the 12 assessment years immediately following the conversion. 
 13.27     Sec. 4.  Minnesota Statutes 1996, section 273.1398, 
 13.28  subdivision 1a, is amended to read: 
 13.29     Subd. 1a.  [TAX BASE DIFFERENTIAL.] (a) For aids payable in 
 13.30  1997, the tax base differential is 0.25 percent of the 
 13.31  assessment year 1995 taxable market value of class 4c 
 13.32  noncommercial seasonal recreational residential property up to 
 13.33  $72,000.  
 13.34     (b) For aids payable in 1998, the tax base differential 
 13.35  is the sum of: 
 13.36     (1) 0.25 percent of the assessment year 1996 taxable market 
 14.1   value of class 4c noncommercial seasonal recreational 
 14.2   residential property up to $72,000.; 
 14.3      (2) 0.2 percent of the assessment year 1997 taxable market 
 14.4   value of class 4a apartment property; and 
 14.5      (3) 0.1 percent of the assessment year 1997 taxable market 
 14.6   value of class 4b nonhomestead residential property. 
 14.7      (c) For aids payable in 1999, the tax base differential is 
 14.8   the sum of: 
 14.9      (1) 0.2 percent of the assessment year 1998 taxable market 
 14.10  value of class 4a apartment property; and 
 14.11     (2) 0.1 percent of the assessment year 1998 taxable market 
 14.12  value of class 4b nonhomestead residential property. 
 14.13     (d) For aids payable in 2000, the tax base differential is 
 14.14  the sum of: 
 14.15     (1) 0.2 percent of the assessment year 1997 taxable market 
 14.16  value of class 4a apartment property; and 
 14.17     (2) 0.1 percent of the assessment year 1997 taxable market 
 14.18  value of class 4b nonhomestead residential property. 
 14.19     Sec. 5.  Minnesota Statutes 1996, section 290A.03, 
 14.20  subdivision 11, is amended to read: 
 14.21     Subd. 11.  [RENT CONSTITUTING PROPERTY TAXES.] "Rent 
 14.22  constituting property taxes" means the amount 20 percent of 
 14.23  gross rent actually paid in cash, or its equivalent, which is 
 14.24  attributable (a) to the property tax paid on the unit or (b) to 
 14.25  the amount or the portion of rent paid in lieu of property 
 14.26  taxes, in any calendar year by a claimant for the right of 
 14.27  occupancy of the claimant's Minnesota homestead in the calendar 
 14.28  year, and which rent constitutes the basis, in the succeeding 
 14.29  calendar year of a claim for relief under this chapter by the 
 14.30  claimant.  The amount of rent attributable to property taxes 
 14.31  paid or payments in lieu made on the unit shall be determined by 
 14.32  multiplying the gross rent paid by the claimant for the calendar 
 14.33  year for the unit by a fraction, the numerator of which is the 
 14.34  net tax on the property where the unit is located and the 
 14.35  denominator of which is the total scheduled rent.  In no case 
 14.36  may the rent constituting property taxes exceed 50 percent of 
 15.1   the gross rent paid by the claimant during that calendar year.  
 15.2   In the case of a claimant who resides in a unit for which (1) a 
 15.3   rent subsidy is paid to, or for, the claimant based on the 
 15.4   income of the claimant or the claimant's family, or (2) a 
 15.5   subsidy is paid to a public housing authority that owns or 
 15.6   operates the claimant's rental unit, pursuant to United States 
 15.7   Code, title 42, section 1437c, 20 percent of gross rent actually 
 15.8   paid in cash or its equivalent shall be the claimant's "rent 
 15.9   constituting property taxes paid."  For purposes of this 
 15.10  subdivision, "rent subsidy" does not include any housing 
 15.11  assistance received under aid to families with dependent 
 15.12  children, general assistance, Minnesota supplemental assistance, 
 15.13  supplemental security income, or similar income maintenance 
 15.14  programs. 
 15.15     Sec. 6.  Minnesota Statutes 1996, section 290A.03, 
 15.16  subdivision 13, is amended to read: 
 15.17     Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 15.18  payable" means the property tax exclusive of special 
 15.19  assessments, penalties, and interest payable on a claimant's 
 15.20  homestead before reductions made under section 273.13 but after 
 15.21  deductions made under sections 273.135, 273.1391, 273.42, 
 15.22  subdivision 2, and any other state paid property tax credits in 
 15.23  any calendar year.  In the case of a claimant who makes ground 
 15.24  lease payments, "property taxes payable" includes the amount of 
 15.25  the payments directly attributable to the property taxes 
 15.26  assessed against the parcel on which the house is located.  No 
 15.27  apportionment or reduction of the "property taxes payable" shall 
 15.28  be required for the use of a portion of the claimant's homestead 
 15.29  for a business purpose if the claimant does not deduct any 
 15.30  business depreciation expenses for the use of a portion of the 
 15.31  homestead in the determination of federal adjusted gross 
 15.32  income.  For homesteads which are manufactured homes as defined 
 15.33  in section 273.125, subdivision 8, and for homesteads which are 
 15.34  park trailers taxed as manufactured homes under section 168.012, 
 15.35  subdivision 9, "property taxes payable" shall also include the 
 15.36  amount 20 percent of the gross rent paid in the preceding year 
 16.1   for the site on which the homestead is located, which is 
 16.2   attributable to the net tax paid on the site.  The amount 
 16.3   attributable to property taxes shall be determined by 
 16.4   multiplying the net tax on the parcel by a fraction, the 
 16.5   numerator of which is the gross rent paid for the calendar year 
 16.6   for the site and the denominator of which is the gross rent paid 
 16.7   for the calendar year for the parcel.  When a homestead is owned 
 16.8   by two or more persons as joint tenants or tenants in common, 
 16.9   such tenants shall determine between them which tenant may claim 
 16.10  the property taxes payable on the homestead.  If they are unable 
 16.11  to agree, the matter shall be referred to the commissioner of 
 16.12  revenue whose decision shall be final.  Property taxes are 
 16.13  considered payable in the year prescribed by law for payment of 
 16.14  the taxes. 
 16.15     In the case of a claim relating to "property taxes 
 16.16  payable," the claimant must have owned and occupied the 
 16.17  homestead on January 2 of the year in which the tax is payable 
 16.18  and (i) the property must have been classified as homestead 
 16.19  property pursuant to section 273.13, subdivision 22 or 23, on or 
 16.20  before December 15 of the assessment year to which the "property 
 16.21  taxes payable" relate; or (ii) the claimant must provide 
 16.22  documentation from the local assessor that application for 
 16.23  homestead classification has been made on or before December 15 
 16.24  of the year in which the "property taxes payable" were payable 
 16.25  and that the assessor has approved the application. 
 16.26     Sec. 7.  Minnesota Statutes 1996, section 290A.19, is 
 16.27  amended to read: 
 16.28     290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
 16.29  CERTIFICATE.] 
 16.30     (a) The owner or managing agent of any property for which 
 16.31  rent is paid for occupancy as a homestead must furnish a 
 16.32  certificate of rent constituting property tax paid to a person 
 16.33  who is a renter on December 31, in the form prescribed by the 
 16.34  commissioner.  If the renter moves before December 31, the owner 
 16.35  or managing agent may give the certificate to the renter at the 
 16.36  time of moving, or mail the certificate to the forwarding 
 17.1   address if an address has been provided by the renter.  The 
 17.2   certificate must be made available to the renter before February 
 17.3   1 of the year following the year in which the rent was paid.  
 17.4   The owner or managing agent must retain a duplicate of each 
 17.5   certificate or an equivalent record showing the same information 
 17.6   for a period of three years.  The duplicate or other record must 
 17.7   be made available to the commissioner upon request.  For the 
 17.8   purposes of this section, "owner" includes a park owner as 
 17.9   defined under section 327C.01, subdivision 6, and "property" 
 17.10  includes a lot as defined under section 327C.01, subdivision 3. 
 17.11     (b) The certificate of rent constituting property taxes 
 17.12  must include the address of the property, including the county, 
 17.13  and the property tax parcel identification number and any 
 17.14  additional information that the commissioner determines is 
 17.15  appropriate. 
 17.16     (c) If the owner or managing agent fails to provide the 
 17.17  renter with a certificate of rent constituting property taxes, 
 17.18  the commissioner shall allocate the net tax on the building to 
 17.19  the unit on a square footage basis or other appropriate basis as 
 17.20  the commissioner determines.  The renter shall supply the 
 17.21  commissioner with a statement from the county treasurer that 
 17.22  gives the amount of property tax on the parcel, the address and 
 17.23  property tax parcel identification number of the property, and 
 17.24  the number of units in the building. 
 17.25     (d) By January 31 of the year following the year in which 
 17.26  the rent was collected, each owner or managing agent shall 
 17.27  report to the commissioner on a form prescribed by the 
 17.28  commissioner the net tax pertaining to the rental residential 
 17.29  part of the property, the total scheduled rent, and the fraction 
 17.30  computed under section 290A.03, subdivision 11.  A copy of the 
 17.31  property tax statement for taxes payable in that year must be 
 17.32  attached. 
 17.33     Sec. 8.  [462A.071] [CERTIFICATION OF HOUSING QUALIFYING 
 17.34  FOR REDUCED PROPERTY TAX RATE.] 
 17.35     Subdivision 1.  [CERTIFICATION.] By June 30 of each year, 
 17.36  the agency must certify to local assessors the units of 
 18.1   low-income rental properties that qualify for class 4d under 
 18.2   sections 273.126 and 273.13.  In making these certifications, 
 18.3   the agency may rely on the application and supporting 
 18.4   information supplied by the property owner as to compliance with 
 18.5   the income limits under section 273.126, subdivision 2, and 
 18.6   satisfaction of the minimum housing quality standards under 
 18.7   subdivision 4. 
 18.8      Subd. 2.  [APPLICATION.] (a) In order to qualify for 
 18.9   certification under subdivision 1, the owner or manager of the 
 18.10  property must annually apply to the agency.  The application 
 18.11  must be in the form prescribed by the agency, contain the 
 18.12  information required by the agency, and be submitted by the date 
 18.13  and time specified by the agency. 
 18.14     (b) Each application must include: 
 18.15     (1) the property tax identification number; 
 18.16     (2) the number, type, and size of units the applicant seeks 
 18.17  to qualify as low-income housing under class 4d; 
 18.18     (3) the number, type, and size of units in the property for 
 18.19  which the applicant is not seeking qualification, if any; 
 18.20     (4) a certification that the property has been inspected by 
 18.21  a qualified inspector within the past three years and meets the 
 18.22  minimum housing quality standards or is exempt from the 
 18.23  inspection requirement under subdivision 4; 
 18.24     (5) information documenting compliance with the income 
 18.25  limits; 
 18.26     (6) an executed agreement to restrict rents meeting the 
 18.27  requirements specified by the agency or executed leases for the 
 18.28  units for which qualification as low-income housing as class 4d 
 18.29  under section 273.13 is sought and the rent schedule; and 
 18.30     (7) any additional information the agency deems appropriate 
 18.31  to require. 
 18.32     (c) The applicant must pay a per-unit application fee to be 
 18.33  set by the agency.  The application fee charged by the agency 
 18.34  must approximately equal the costs of processing and reviewing 
 18.35  the applications.  The fee must be deposited in the general fund.
 18.36     Subd. 3.  [AGREEMENT TO RESTRICT RENTS.] The agency may 
 19.1   prescribe one or more standard form agreements to restrict rents 
 19.2   that meet the requirements of section 273.126, subdivision 3.  
 19.3   The agreements must be in recordable form.  The agency may 
 19.4   require applicants to execute a rent restriction agreement in 
 19.5   this form as a condition of entering an agreement to restrict 
 19.6   rents. 
 19.7      Subd. 4.  [MINIMUM HOUSING QUALITY STANDARDS.] (a) To 
 19.8   qualify for taxation under class 4d under section 273.13, a unit 
 19.9   must meet both the housing maintenance code of the local unit of 
 19.10  government in which the unit is located, if such a code has been 
 19.11  adopted, and the housing quality standards adopted by the United 
 19.12  States Department of Housing and Urban Development. 
 19.13     (b) In order to meet the minimum housing quality standards, 
 19.14  a building must be inspected by an independent designated 
 19.15  inspector at least once every three years.  The inspector must 
 19.16  certify that the building complies with the minimum standards.  
 19.17  The property owner must pay the cost of the inspection. 
 19.18     (c) The agency may exempt from the inspection requirement 
 19.19  housing units that are financed by a governmental entity and 
 19.20  subject to regular inspection or other compliance checks with 
 19.21  regard to minimum housing quality.  Written certification must 
 19.22  be supplied, however, showing that these exempt units have been 
 19.23  inspected within the last three years and comply with the 
 19.24  requirements under the public financing or local requirements. 
 19.25     Subd. 5.  [HOUSING INSPECTORS.] (a) Housing inspections 
 19.26  required by this section may be conducted only by persons 
 19.27  designated by the agency.  The agency may designate one or more 
 19.28  persons to conduct inspections for all or part of the state.  A 
 19.29  designated inspector may charge a fee for an inspection up to a 
 19.30  maximum amount approved by the agency.  The inspector must be 
 19.31  independent of the owner or manager of the inspected property. 
 19.32     (b) The agency must maintain a list of persons eligible to 
 19.33  conduct housing inspections under this section. 
 19.34     Subd. 6.  [SECTION 8 AND TAX CREDIT UNITS.] (a) The agency 
 19.35  may deem units as meeting the requirements of section 273.126 
 19.36  and this section, if the units either: 
 20.1      (1) are subject to a housing assistance payments contract 
 20.2   under section 8 of the United States Housing Act of 1937, as 
 20.3   amended; or 
 20.4      (2) are rent and income restricted units of a qualified 
 20.5   low-income housing project receiving tax credits under section 
 20.6   42(g) of the Internal Revenue Code of 1986, as amended. 
 20.7      (b) The agency may certify these deemed units under 
 20.8   subdivision 1 based on a simplified application procedure that 
 20.9   verifies the unit's qualifications under paragraph (a). 
 20.10     Subd. 7.  [MONITORING COMPLIANCE.] (a) The agency must 
 20.11  monitor compliance by building owners with the requirements of 
 20.12  section 273.126 and this section.  The agency must annually 
 20.13  conduct on-site examinations of a sample of the buildings 
 20.14  receiving class 4d taxation to monitor compliance.  The agency 
 20.15  may contract with third parties to monitor compliance. 
 20.16     (b) An inspector, designated by the agency under 
 20.17  subdivision 5, shall notify the agency if, in conducting an 
 20.18  inspection under subdivision 4, the inspector finds that: 
 20.19     (1) a unit is receiving class 4d taxation; 
 20.20     (2) the unit is not in compliance with the requirements of 
 20.21  subdivision 4; and 
 20.22     (3) the owner or manager fails or refuses to cure the 
 20.23  violations within a reasonable time after receiving notification 
 20.24  of the violation. 
 20.25     Subd. 8.  [PENALTIES.] (a) The penalties provided by this 
 20.26  subdivision apply to each unit that received class 4d taxation 
 20.27  for a year and failed to meet the requirements of section 
 20.28  273.126 and this section. 
 20.29     (b) If the owner or manager does not comply with the rent 
 20.30  restriction agreement, a penalty applies equal to the lesser of: 
 20.31     (1) the increased taxes that would have been imposed, if 
 20.32  the property had not been classified under class 4d for any year 
 20.33  in which the agreement was violated; or 
 20.34     (2) 150 percent of the rent charged in excess of the rent 
 20.35  restriction agreement. 
 20.36     (c) If the owner or manager does not comply with the income 
 21.1   restrictions or minimum housing quality standards, a penalty 
 21.2   applies equal to the increased taxes that would have been 
 21.3   imposed, if the property had not been classified under class 4d 
 21.4   for any year in which restrictions were violated. 
 21.5      (d) If the agency finds that the violations were 
 21.6   inadvertent and insubstantial, a penalty of $....... per unit 
 21.7   per year applies in lieu of the penalties specified under 
 21.8   paragraphs (b) and (c).  In order to qualify under this 
 21.9   paragraph, violations of the minimum housing quality standards 
 21.10  must be corrected within a reasonable period of time and rent 
 21.11  charged in excess of the agreement must be rebated to the 
 21.12  tenants. 
 21.13     (e) The agency may abate the penalties under this 
 21.14  subdivision for reasonable cause. 
 21.15     (f) Penalties assessed under paragraph (d) are payable to 
 21.16  the agency and must be deposited in the general fund.  If an 
 21.17  owner or manager fails to timely pay a penalty imposed under 
 21.18  paragraph (d), the agency may choose to: 
 21.19     (1) impose the penalty under paragraph (b) or (c); or 
 21.20     (2) certify the penalty under paragraph (d) to the assessor 
 21.21  to be added to and collected under section 273.126. 
 21.22  The agency shall certify to the assessor and county auditor 
 21.23  penalties assessed under paragraphs (b) and (c) and clause (2).  
 21.24  The assessor or auditor shall impose and collect the certified 
 21.25  penalties as additional taxes under section 273.126.  Any 
 21.26  penalty collected under section 273.126 as additional taxes must 
 21.27  be distributed to taxing districts in the same manner as 
 21.28  property taxes on the property. 
 21.29     Subd. 9.  [TAX COURT REVIEW.] (a) An owner may appeal to 
 21.30  tax court as provided in section 271.06: 
 21.31     (1) a denial of a request for certification of a property 
 21.32  as qualifying for class 4d taxation; 
 21.33     (2) imposition of a penalty under this section; or 
 21.34     (3) denial of a request to abate a penalty. 
 21.35     (b) The county attorney shall represent the public in 
 21.36  opposing the appeal. 
 22.1      Subd. 10.  [RULEMAKING.] (a) The agency may adopt 
 22.2   administrative rules under chapter 14 to carry out the 
 22.3   provisions of this section, including establishing standards for 
 22.4   abating penalties, violations that are inadvertent and 
 22.5   insubstantial, selection of inspectors, selection of persons to 
 22.6   monitor compliance, establishing rent restriction agreement 
 22.7   terms, or any other purpose. 
 22.8      (b) The agency may adopt emergency rules under chapter 14.  
 22.9   Any emergency rules adopted under this authority expire on 
 22.10  January 1, 1999. 
 22.11     Sec. 9.  Minnesota Statutes 1996, section 469.040, is 
 22.12  amended by adding a subdivision to read: 
 22.13     Subd. 1a.  [LIMITS FOR EXEMPT HOUSING PROJECTS.] (a) The 
 22.14  provisions of this subdivision apply to housing projects and 
 22.15  housing development projects acquired, constructed, financed, or 
 22.16  refinanced after December 31, 1997. 
 22.17     (b) For a project to qualify for the property tax exemption 
 22.18  under this section, the authority must establish income 
 22.19  guidelines meeting the requirements of paragraph (c) and rent 
 22.20  restrictions under paragraph (d). 
 22.21     (c) The housing authority must establish and make good 
 22.22  faith efforts to abide by one of the following income limits for 
 22.23  the housing project: 
 22.24     (1) at least 20 percent of the housing units are occupied 
 22.25  by individuals whose incomes are 50 percent or less of the area 
 22.26  median gross income; or 
 22.27     (2) at least 40 percent of the housing units are occupied 
 22.28  by individuals whose incomes are 60 percent or less of the area 
 22.29  median gross income. 
 22.30     For purposes of this paragraph, the terms defined in 
 22.31  section 42 of the Internal Revenue Code of 1986 apply, except 
 22.32  "median area gross income" means the greater of (1) the median 
 22.33  gross income for the area determined under section 42 of the 
 22.34  Internal Revenue Code of 1986, as amended, or (2) the median 
 22.35  gross income for the state. 
 22.36     (d) The provisions of this subdivision do not apply to all 
 23.1   or part of a housing project that is subject to the requirements 
 23.2   of section 5 of the United States Housing Act of 1937.  
 23.3      Sec. 10.  Minnesota Statutes 1996, section 469.040, 
 23.4   subdivision 3, is amended to read: 
 23.5      Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
 23.6   RENTALS.] Notwithstanding the provisions of subdivision 1, after 
 23.7   a housing project or a housing development project carried on 
 23.8   under sections 469.016 to 469.026 has become occupied, in whole 
 23.9   or in part, an authority shall file with the assessor, on or 
 23.10  before April 15 of each year, a statement of the aggregate 
 23.11  shelter rentals of that project collected during the preceding 
 23.12  calendar year.  Unless a greater amount has been agreed upon 
 23.13  between the authority and the governing body or bodies for which 
 23.14  the authority was created, in whose jurisdiction the project is 
 23.15  located, five percent of the aggregate shelter rentals shall be 
 23.16  charged to the authority as a service charge for the services 
 23.17  and facilities to be furnished with respect to that project.  
 23.18  The service charge shall be collected from the authority in the 
 23.19  manner provided by law for the assessment and collection of 
 23.20  taxes.  The amount so collected shall be distributed to the 
 23.21  several taxing bodies in the same proportion as the tax rate of 
 23.22  each bears to the total tax rate of those taxing bodies.  The 
 23.23  governing body or bodies for which the authority has been 
 23.24  created, in whose jurisdiction the project is located, may agree 
 23.25  with the authority for the payment of a service charge for a 
 23.26  housing project or a housing development project in an amount 
 23.27  greater than five percent of the aggregate annual shelter 
 23.28  rentals of any project, upon the basis of shelter rentals or 
 23.29  upon another basis agreed upon.  The service charge may not 
 23.30  exceed the amount which would be payable in taxes were the 
 23.31  property not exempt.  If such an agreement is made, the service 
 23.32  charge so agreed upon shall be collected and distributed in the 
 23.33  manner above provided.  If the project has become occupied, or 
 23.34  if the land upon which the project is to be constructed has been 
 23.35  acquired, the agreement shall specify the location of the 
 23.36  project for which the agreement is made.  "Shelter rental" means 
 24.1   the total rentals of a housing project exclusive of any charge 
 24.2   for utilities and special services such as heat, water, 
 24.3   electricity, gas, sewage disposal, or garbage removal.  "Service 
 24.4   charge" means payment in lieu of taxes.  The records of each 
 24.5   housing project shall be open to inspection by the proper 
 24.6   assessing officer. 
 24.7      Sec. 11.  [TRANSITION CLASS RATES.] 
 24.8      Subdivision 1.  [APPLICATION.] (a) The class rates under 
 24.9   this section apply for property taxes payable in 1999 to 2003 
 24.10  for the market value of properties: 
 24.11     (1)(i) which were classified as class 4c or class 4d for 
 24.12  taxes payable in 1998; or 
 24.13     (ii) which are constructed or substantially rehabilitated 
 24.14  during calendar year 1997 and would qualify as class 4c or class 
 24.15  4d for taxes payable in 1999; and 
 24.16     (2) which do not qualify as class 4d property as a result 
 24.17  of the amendments in this act to Minnesota Statutes, section 
 24.18  273.13, subdivision 25. 
 24.19     (b) To qualify for the class rates under this section, the 
 24.20  building's owner must annually certify to the assessor in 
 24.21  writing that the property, building, or unit continues to 
 24.22  qualify under the laws in effect and applicable to its 
 24.23  classification for taxes payable in 1998. 
 24.24     (c) A property no longer qualifies under this section: 
 24.25     (1) if it is transferred or sold; or 
 24.26     (2) if loans, that have a principal amount equal to more 
 24.27  than 25 percent of the property's market value and that are 
 24.28  secured by the property, are refinanced. 
 24.29     Subd. 2.  [CLASS 4C PROPERTIES.] For the market value of 
 24.30  properties that were classified as class 4c for taxes payable in 
 24.31  1998 and which no longer qualify as a result of the amendments 
 24.32  to Minnesota Statutes, section 273.13, subdivision 25, the 
 24.33  following class rates apply: 
 24.34     (1) for taxes payable in 1999, a class rate of 2.4 percent; 
 24.35     (2) for taxes payable in 2000, a class rate of 2.5 percent; 
 24.36     (3) for taxes payable in 2001, a class rate of 2.7 percent; 
 25.1   and 
 25.2      (4) for taxes payable in 2002, a class rate of 2.8 percent. 
 25.3      Subd. 3.  [CLASS 4D PROPERTIES.] For the market value of 
 25.4   properties that were classified as class 4d for taxes payable in 
 25.5   1998 and which no longer qualify as a result of the amendments 
 25.6   to Minnesota Statutes, section 273.13, subdivision 25, the 
 25.7   following class rates apply: 
 25.8      (1) for taxes payable in 1999, a class rate of 2.1 percent; 
 25.9      (2) for taxes payable in 2000, a class rate of 2.2 percent; 
 25.10     (3) for taxes payable in 2001, a class rate of 2.4 percent; 
 25.11     (4) for taxes payable in 2002, a class rate of 2.6 percent; 
 25.12  and 
 25.13     (5) for taxes payable in 2003, a class rate of 2.8 percent. 
 25.14     Sec. 12.  [TEMPORARY EXEMPTIONS FROM INSPECTION 
 25.15  REQUIREMENTS.] 
 25.16     (a) The Minnesota housing finance agency may provide a 
 25.17  temporary exemption to the inspection requirement under 
 25.18  Minnesota Statutes, sections 273.126, subdivision 4, and 
 25.19  462A.071, if the agency finds that: 
 25.20     (1) the property owner made a good faith effort to obtain 
 25.21  an inspection; and 
 25.22     (2) the owner was unable to obtain an inspection in time to 
 25.23  apply because the designated inspectors were unable to conduct 
 25.24  all the requested inspections. 
 25.25     (b) If a unit that is exempted under this section does not 
 25.26  ultimately obtain a certification from a designated inspector 
 25.27  that it is in compliance with the minimum housing quality 
 25.28  standards, the additional taxes under Minnesota Statutes, 
 25.29  section 273.126, subdivision 5, apply. 
 25.30     (c) Procedures or rules for granting exemptions under this 
 25.31  section are not subject to the administrative rulemaking under 
 25.32  Minnesota Statutes, chapter 14. 
 25.33     (d) The authority under this section expires December 31, 
 25.34  2000. 
 25.35     Sec. 13.  [APPROPRIATIONS.] 
 25.36     $....... is appropriated for fiscal years 1998 and 1999 
 26.1   from the general fund to the housing finance agency for purposes 
 26.2   of administering the certification of qualifying low-income 
 26.3   residential properties for property taxation under class 4d. 
 26.4      Sec. 14.  [REPEALER.] 
 26.5      (a) Minnesota Statutes 1996, sections 273.1317; and 
 26.6   273.1318, are repealed. 
 26.7      (b) Minnesota Statutes 1996, section 290A.03, subdivisions 
 26.8   12a and 14, are repealed. 
 26.9      Sec. 15.  [EFFECTIVE DATE.] 
 26.10     Sections 1 to 4 and 14, paragraph (a), are effective for 
 26.11  property taxes payable in 1999 and thereafter, except the 
 26.12  amendments to class 4a and class 4b, are effective for taxes 
 26.13  payable in 1998.  Sections 5 to 7 and 14, paragraph (b), are 
 26.14  effective beginning for claims based on rents paid in 1999.  
 26.15  Sections 8 and 12 are effective the day following final 
 26.16  enactment.  Sections 9 and 10 are effective August 1, 1997.