SF 1275

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 tax; providing that the 
  1.3             market value of certain apartment property will not be 
  1.4             increased due to improvements for a certain time 
  1.5             period; amending Minnesota Statutes 1996, section 
  1.6             273.11, by adding a subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 273.11, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 19.  [IMPROVEMENTS MADE TO CERTAIN APARTMENTS.] (a) 
  1.11  Notwithstanding any other provisions to the contrary, the market 
  1.12  value of qualifying property shall not be increased for 
  1.13  assessment purposes under the conditions provided in this 
  1.14  subdivision.  
  1.15     (b) "Qualifying property" means property that meets all of 
  1.16  the following criteria: 
  1.17     (1) the building is at least 30 years old at the time of 
  1.18  the improvements; 
  1.19     (2) the building is residential real estate of four or more 
  1.20  units and is classified under section 273.13, subdivision 25, as 
  1.21  class 4a, 4c, or 4d property; 
  1.22     (3) the building has been repaired or improved after 
  1.23  January 1, 1997, and those total repairs and improvements exceed 
  1.24  $5,000 per unit; 
  1.25     (4) the building is located in one of the seven 
  1.26  metropolitan counties under section 473.121, subdivision 4; 
  2.1      (5) any rent increase to the tenants in a building that 
  2.2   qualifies must be a modest increase as provided in paragraph 
  2.3   (f); and 
  2.4      (6) the property must be located in a community which has 
  2.5   exceeded the rental housing affordability index established by 
  2.6   the metropolitan council and the community has agreed to pursue 
  2.7   the regional benchmarks from the Metropolitan Livable 
  2.8   Communities Act. 
  2.9      (c) If the property lies in a jurisdiction which is subject 
  2.10  to a building permit process, a building permit must have been 
  2.11  issued prior to the commencement of the repairs and 
  2.12  improvements.  Only improvements to the residential structure 
  2.13  and garages qualify for the market value freeze as provided in 
  2.14  this subdivision.  The assessor shall require an application, 
  2.15  including, if unknown by the assessor, documentation of the age 
  2.16  of the building from the owner.  The application may be filed 
  2.17  subsequent to the date of the building permit provided that the 
  2.18  application is filed prior to the next assessment date. 
  2.19     (d) If the property qualifies under this subdivision, the 
  2.20  assessor shall not increase that qualifying property's market 
  2.21  value for the five assessment years immediately following the 
  2.22  year in which the improvements were completed, at which time the 
  2.23  assessor shall determine the property's estimated market value, 
  2.24  and 20 percent of the increased market value over the base value 
  2.25  shall be added back in each of the next five subsequent 
  2.26  assessment years.  The assessor may require from the owner any 
  2.27  documentation necessary to verify that the amount of repairs and 
  2.28  improvements exceed the $5,000 per unit minimum.  Any repairs 
  2.29  and improvements made subsequent to the initial repairs and 
  2.30  improvements which allowed the building to qualify shall also be 
  2.31  disregarded by the assessor in any determination of market value 
  2.32  during the initial five-year time period; provided, however, 
  2.33  that beginning in the sixth year when the increased market value 
  2.34  is added back, the assessor's estimate of market value shall 
  2.35  include all repairs and improvements made in the entire 
  2.36  five-year time period. 
  3.1      (e) Annually on or before July 1, the metropolitan council 
  3.2   shall certify to each metropolitan county assessor which 
  3.3   communities are eligible to qualify under paragraph (b), clause 
  3.4   (6). 
  3.5      (f) The owner of qualifying property shall certify annually 
  3.6   to the Minnesota housing finance agency any rent increase the 
  3.7   owner proposes to make for the following year on units located 
  3.8   in a qualifying building.  The Minnesota housing finance agency 
  3.9   shall determine if the proposed rent increase will result in 
  3.10  rents that exceed an amount affordable to a family at 60 percent 
  3.11  of the metropolitan area median family income.  "Affordable" 
  3.12  means the family pays no more than 30 percent of its income for 
  3.13  rent.  If the agency determines that the proposed rent increase 
  3.14  will exceed that amount, the agency must notify the owner.  The 
  3.15  owner must lower the rent increases and recertify to the agency 
  3.16  within the time frame established by the agency.  The agency 
  3.17  shall notify the appropriate county assessor that the property 
  3.18  tax benefits of this section are terminated if the owner does 
  3.19  not comply in the time permitted. 
  3.20     Sec. 2.  [APPLICABILITY.] 
  3.21     This act applies in the counties of Anoka, Carver, Dakota, 
  3.22  Hennepin, Ramsey, Scott, and Washington. 
  3.23     Sec. 3.  [EFFECTIVE DATE.] 
  3.24     Section 1 is effective beginning with the 1998 assessment 
  3.25  and ending with the 2002 assessment, provided that any property 
  3.26  that originally qualifies in that time period will be allowed to 
  3.27  receive the benefits provided under that section for the full 
  3.28  time period prescribed in that section.