SF 2816

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; providing that the market value 
  1.3             of certain apartment property will not be increased 
  1.4             for improvements for a certain tax period; amending 
  1.5             Minnesota Statutes 1994, section 273.11, by adding a 
  1.6             subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, 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, 1996, such that the total repairs and improvements 
  1.24  exceed $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 documentation of the age of the building from the 
  2.16  owner, if unknown by the assessor.  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, that 
  2.33  beginning in the sixth year when the increased market value is 
  2.34  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 owners of qualifying property will annually certify 
  3.6   to the Minnesota housing finance agency any rent increases which 
  3.7   they propose to make for the following year on units located in 
  3.8   qualifying buildings.  The Minnesota housing finance agency 
  3.9   shall determine if those rent increases exceed some reasonable 
  3.10  allowable amount.  If they determine the rent increases to be 
  3.11  more than a modest increase, they shall notify the owner that 
  3.12  the rent amounts need to be reduced or the property tax benefits 
  3.13  under this subdivision shall terminate in the next assessment 
  3.14  year. 
  3.15     Sec. 2.  [APPLICABILITY.] 
  3.16     This act applies in the counties of Anoka, Carver, Dakota, 
  3.17  Hennepin, Ramsey, Scott, and Washington. 
  3.18     Sec. 3.  [EFFECTIVE DATE.] 
  3.19     Section 1 is effective beginning with the 1997 assessment 
  3.20  and ending with the 2002 assessment, provided that any property 
  3.21  that originally qualifies in that time period will be allowed to 
  3.22  receive the benefits provided under that section for the full 
  3.23  time period prescribed in that section.