462A.071 Certification of housing qualifying for reduced property tax rate.
Subdivision 1. Certification. By June 30 of each year, the agency must certify to local assessors the units of low-income rental properties that qualify for class 4d under sections 273.126 and 273.13. In making these certifications, the agency may rely on the application and supporting information supplied by the property owner as to compliance with the income limits under section 273.126, subdivision 2, and satisfaction of the minimum housing quality standards under subdivision 4.
Subd. 2. Application. (a) In order to qualify for certification under subdivision 1, the owner or manager of the property must annually apply to the agency. The application must be in the form prescribed by the agency, contain the information required by the agency, and be submitted by the date and time specified by the agency. Beginning in calendar year 2000, the agency shall adopt procedures and deadlines for making application to permit certification of the units qualifying to the assessor by no later than April 1 of the assessment year.
(b) Each application must include:
(1) the property tax identification number;
(2) the number, type, and size of units the applicant seeks to qualify as low-income housing under class 4d;
(3) the number, type, and size of units in the property for which the applicant is not seeking qualification, if any;
(4) a certification that the property has been inspected by a qualified inspector within the past three years and meets the minimum housing quality standards or is exempt from the inspection requirement under subdivision 4;
(5) a statement indicating the qualifying units in compliance with the income limits;
(6) an executed agreement to restrict rents meeting the requirements specified by the agency or executed leases for the units for which qualification as low-income housing as class 4d under section 273.13 is sought and the rent schedule; and
(7) any additional information the agency deems appropriate to require.
(c) The applicant must pay a per-unit application fee to be set by the agency. The application fee charged by the agency must approximately equal the costs of processing and reviewing the applications. The fee must be deposited in the housing development fund.
Subd. 3. Agreement to restrict rents. The agency may prescribe one or more standard form agreements to restrict rents that meet the requirements of section 273.126, subdivision 3. The agreements must be in recordable form. The agency may require applicants to execute a rent restriction agreement in this form as a condition of entering an agreement to restrict rents.
Subd. 4. Minimum housing quality standards. (a) To qualify for taxation under class 4d under section 273.13, a unit must meet the housing maintenance code of the local unit of government in which the unit is located, if such a code has been adopted, or the housing quality standards adopted by the United States Department of Housing and Urban Development, if no local housing maintenance code has been adopted.
(b) In order to meet the minimum housing quality standards, a building must be inspected by an independent designated inspector at least once every three years. The inspector must certify that the building complies with the minimum standards. The property owner must pay the cost of the inspection.
(c) The agency may exempt from the inspection requirement housing units that are financed by a governmental entity and subject to regular inspection or other compliance checks with regard to minimum housing quality. Written certification must be supplied to show that these exempt units have been inspected within the last three years and comply with the requirements under the public financing or local requirements.
Subd. 5. Housing inspectors. (a) Housing inspections required by this section may be conducted only by persons designated by the agency. The agency may designate one or more persons to conduct inspections for all or part of the state. A designated inspector may charge a fee for an inspection up to a maximum amount approved by the agency. The inspector must be independent of the owner or manager of the inspected property.
(b) The agency must maintain a list of persons eligible to conduct housing inspections under this section.
Subd. 6. Section 8, tax credit, and rural housing service units. (a) The agency may deem units as meeting the requirements of section 273.126 and this section, if the units:
(1) are subject to a housing assistance payments contract under section 8 of the United States Housing Act of 1937, as amended;
(2) are rent and income restricted units of a qualified low-income housing project receiving tax credits under section 42(g) of the Internal Revenue Code of 1986, as amended; or
(3) are financed by the Rural Housing Service of the United States Department of Agriculture and receive payments under the rental assistance program pursuant to section 521(a) of the Housing Act of 1949, as amended.
(b) The agency may certify these deemed units under subdivision 1 based on a simplified application procedure that verifies the unit's qualifications under paragraph (a).
Subd. 7. Monitoring compliance. (a) The agency must monitor compliance by building owners with the requirements of section 273.126 and this section. The agency must annually conduct on-site examinations of a sample of the buildings receiving class 4d taxation to monitor compliance. The agency may contract with third parties to monitor compliance.
(b) An inspector, designated by the agency under subdivision 5, shall notify the agency if, in conducting an inspection under subdivision 4, the inspector finds that:
(1) a unit is receiving class 4d taxation;
(2) the unit is not in compliance with the requirements of subdivision 4; and
(3) the owner or manager fails or refuses to cure the violations within a reasonable time after receiving notification of the violation.
Subd. 8. Penalties. (a) The penalties provided by this subdivision apply to each unit that received class 4d taxation for a year and failed to meet the requirements of section 273.126 and this section.
(b) If the owner or manager does not comply with the rent restriction agreement, or does not comply with the income restrictions, minimum housing quality standards, or the section 8 availability requirements, a penalty applies equal to the increased taxes that would have been imposed if the unit had not been classified under class 4d for the year in which restrictions were violated, plus an additional amount equal to ten percent of the increased taxes. The provisions of section 279.03 apply to the amount of increased taxes that would have been imposed if a unit had not been classified under class 4d for the year in which restrictions were violated.
(c) If the agency finds that the violations were inadvertent and insubstantial, a penalty of $50 per unit per year applies in lieu of the penalty specified under paragraph (b). In order to qualify under this paragraph, violations of the minimum housing quality standards must be corrected within a reasonable period of time and rent charged in excess of the agreement must be rebated to the tenants.
(d) The agency may abate the penalties under this subdivision for reasonable cause.
(e) Penalties assessed under paragraph (c) are payable to the agency and must be deposited in the housing development fund. If an owner or manager fails to timely pay a penalty imposed under paragraph (c), the agency may choose to:
(1) impose the penalty under paragraph (b); or
(2) certify the penalty under paragraph (c) to the auditor for collection as additional taxes.
The agency shall certify to the county auditor penalties assessed under paragraph (b) and clause (2). The auditor shall impose and collect the certified penalties as additional taxes which will be distributed to taxing districts in the same manner as property taxes on the property.
Subd. 9. Tax court review. (a) An owner may appeal to tax court as provided in section 271.06:
(1) a denial of a request for certification of a property as qualifying for class 4d taxation;
(2) imposition of a penalty under this section; or
(3) denial of a request to abate a penalty.
(b) The county attorney shall represent the public in opposing the appeal.
Subd. 10. Interagency contracting authority. The agency may contract with the department of revenue or any other state agency or a private entity to carry out administrative functions under this section.
Subd. 11. Rulemaking. (a) The agency may adopt administrative rules under chapter 14 to carry out the provisions of this section, including establishing standards for abating penalties, violations that are inadvertent and insubstantial, selection of inspectors, selection of persons to monitor compliance, and establishing rent restriction agreement terms.
(b) Pending final rulemaking, and in order to implement this section by January 1, 1998, the agency shall be allowed to make determinations regarding selection of inspectors, rent restriction agreement terms, fees, application information, application deadlines, required documentation, exemptions from inspection requirements, and deeming of eligibility. Any determinations adopted under this authority expire on January 1, 1999.
* NOTE: This section, as added by Laws 1997, chapter 231, *article 1, section 15, is effective for taxes payable in 1999 *and subsequent years. Laws 1997, chapter 231, article 1, *section 22.
Official Publication of the State of Minnesota
Revisor of Statutes