1998 Minnesota Statutes

     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. 

    HIST: 1997 c 231 art 1 s 15; 1998 c 389 art 3 s 18-21 

*   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.