1997 Minnesota Statutes

     273.1317 Classification of 4c property; low-income 
  housing. 

    Subdivision 1.    Definitions.  (a) "Area median gross 
 income" means area median gross income as determined by the 
 United States Secretary of Housing and Urban Development under 
 section 142(d)(2)(B) of the Internal Revenue Code. 

    (b) "Internal Revenue Code" means the Internal Revenue Code 
 of 1986, as amended through December 31, 1990. 

    (c) "Low-income unit" means a unit that meets the 
 requirements of subdivision 3 and section 42(i)(3)(B), (C), and 
 (D) of the Internal Revenue Code. 

    (d) "Project" means a project for residential rental 
 property.  A project consists of a single building and must 
 include the entire residential part of the building.  Property 
 must not be treated as failing to be residential rental property 
 merely because part of the building is used for purposes other 
 than residential rental purposes. 

    (e) "Rehabilitation expenditures" has the meaning given it 
 in section 42(e)(2) of the Internal Revenue Code. 

    (f) "Rent restricted units" means rent restricted units as 
 defined and limited by section 42(g)(2) of the Internal Revenue 
 Code. 

    Subd. 2.    Requirements.  Residential rental property 
 that does not receive a low-income housing credit under section 
 42 of the Internal Revenue Code must meet the requirements in 
 subdivisions 3 to 5 to qualify for classification 4c under 
 section 273.13, subdivision 25, paragraph (c), clause (3), item 
 (iii). 

    Subd. 3.    Rent restrictions; income limits.  (a) At 
 the irrevocable election of the taxpayer, either: 

    (1) 20 percent or more of the residential units in the 
 project must be both rent-restricted and occupied by individuals 
 whose income is 50 percent or less of area median gross income; 
 or 

    (2) 40 percent or more of the residential units in the 
 project must be both rent-restricted and occupied by individuals 
 whose income is 60 percent or less of area median gross income. 

    (b) For purposes of meeting the income limits under 
 paragraph (a) of tenants whose incomes increase, the provisions 
 of section 42(g)(2)(D) and (E) of the Internal Revenue Code 
 apply. 

    Subd. 4.    New or rehabilitated building.  A building 
 must be (1) a new building, the original use of which begins 
 with the owners or developers of the building, or (2) an 
 existing building with respect to which rehabilitation 
 expenditures have been paid or incurred by the owner or 
 developer.  To qualify under this clause, the rehabilitation 
 expenditures must meet the requirements of section 42(e)(3)(A) 
 of the Internal Revenue Code. 

    Subd. 5.    Agreement.  The owner or developer must 
 execute an agreement with the local housing and redevelopment 
 authority, or other authority as provided in subdivision 7.  The 
 agreement must be for a term of 15 years.  The agreement must 
 provide that the requirements of subdivision 3 will be met 
 during the term of the agreement.  The agreement must provide 
 that the owner or developer must maintain and make available to 
 the authority the information and records the authority 
 considers necessary to monitor compliance with the provisions of 
 this section, including rents, the incomes of tenants, and the 
 number of low-income units in the building. 

    Subd. 6.    Records review.  The local housing and 
 redevelopment authority or other authority shall annually review 
 income and rental information and records maintained by the 
 owner or developer to determine compliance with the requirements 
 of this section.  The local housing and redevelopment authority 
 or other authority shall report to the assessor responsible for 
 assessing the property at the time and in the manner required by 
 the assessor.  The assessor shall determine the classification 
 of the property. 

    Subd. 7.    Housing authority.  If a local housing or 
 redevelopment authority does not exist in the jurisdiction, the 
 county housing and redevelopment authority shall execute the 
 duties imposed in subdivisions 5 and 6.  If a county housing and 
 redevelopment authority does not exist in the county, the 
 municipality must appoint the administrator of section 8 
 certificates within the jurisdiction or contract with a 
 qualified person or entity to perform the duties imposed in 
 subdivisions 5 and 6.  

    Subd. 8.    Additional tax.  Notwithstanding the 
 provisions of section 273.01, 274.01, or any other law, if the 
 assessor determines that the provisions of this section have not 
 been met for any period during which the property was classified 
 under section 273.13, subdivision 25, paragraph (c), clause (3), 
 item (iii), or valued under Laws 1991, chapter 291, article 1, 
 section 55, and received the benefits of this section, an 
 additional tax is imposed.  The additional tax is equal to the 
 tax which would have been imposed if the property had not been 
 classified under section 273.13, subdivision 25, paragraph (c), 
 clause (3), item (iii), or valued under Laws 1991, chapter 291, 
 article 1, section 55, and the tax actually imposed, during the 
 period of noncompliance.  The additional tax must be extended 
 against the property on the tax list for the current year.  No 
 interest or penalties may be levied on additional taxes if 
 timely paid.  The tax imposed by this subdivision is a lien upon 
 the property assessed to the same extent and for the same 
 duration as other taxes imposed on the property. 

    HIST: 1991 c 291 art 1 s 26