1.1 A bill for an act
1.2 relating to taxation; property; modifying requirements for class 4d(1) low-income
1.3 rental housing; amending Minnesota Statutes 2024, section 273.128, subdivision
1.4 1.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 273.128, subdivision 1, is amended to read:
1.7 Subdivision 1.Requirement.(a) Low-income rental property classified as class 4d(1)
1.8under section 273.13, subdivision 25, is entitled to valuation under this section if at least
1.920 percent of the units in the rental housing property meet any of the following qualifications:
1.10 (1) the units are subject to a housing assistance payments contract under Section 8 of
1.11the United States Housing Act of 1937, as amended;
1.12 (2) the units are rent-restricted and income-restricted units of a qualified low-income
1.13housing project receiving tax credits under section 42(g) of the Internal Revenue Code;
1.14 (3) the units are financed by the Rural Housing Service of the United States Department
1.15of Agriculture and receive payments under the rental assistance program pursuant to section
1.16521(a) of the Housing Act of 1949, as amended; or
1.17 (4) the units are subject to rent and income restrictions under the terms of financial
1.18assistance provided to the rental housing property by the federal government or the state of
1.19Minnesota, or a local unit of government, as evidenced by a document recorded against the
1.20property. The restrictions under this clause must require assisted units to be occupied by
1.21residents whose household income at the time of initial occupancy does not exceed 60
1.22percent of the greater of area or state median income, adjusted for family size, as determined
1Section 1.
25-00606 as introduced11/14/24 REVISOR MS/HL
SENATE
STATE OF MINNESOTA
S.F. No. 33NINETY-FOURTH SESSION
(SENATE AUTHORS: REST, Dibble and Weber)
OFFICIAL STATUSD-PGDATE
Introduction and first reading01/16/2025
Referred to Taxes 2.1by the United States Department of Housing and Urban Development. The restriction must
2.2also require the rents for assisted units to not exceed 30 percent of 60 percent of the greater
2.3of area or state median income, adjusted for family size, as determined by the United States
2.4Department of Housing and Urban Development.
2.5 The restrictions must require assisted units to be occupied by residents whose household
2.6income at the time of initial occupancy does not exceed 60 percent of the greater of area or
2.7state median income, adjusted for family size, as determined by the United States Department
2.8of Housing and Urban Development. The restriction must also require the rents for assisted
2.9units to not exceed 30 percent of 60 percent of the greater of area or state median income,
2.10adjusted for family size, as determined by the United States Department of Housing and
2.11Urban Development.
2.12 (b) The owner of a property certified as class 4d(1) under this section must use the
2.13property tax savings received from the 4d(1) classification for one or more of the following
2.14eligible uses: property maintenance, property security, improvements to the property, rent
2.15stabilization, or increases to the property's replacement reserve account. To maintain the
2.16class 4d(1) classification, the property owner must annually reapply and certify to the
2.17Housing Finance Agency that the property tax savings were used for one or more eligible
2.18uses.
2.19 (c) In order to meet the requirements of this section, property which received the 4d(1)
2.20classification in the prior year must demonstrate compliance with paragraph (b).
2.21 EFFECTIVE DATE.This section is effective beginning with assessment year 2026.
2Section 1.
25-00606 as introduced11/14/24 REVISOR MS/HL