SF33

The bill SF No. 33 aims to modify the tax requirements for certain low-income rental housing properties in Minnesota. These properties are classified as class 4d1 and can receive special valuation if at least 20 percent of their units meet specific conditions such as being part of a government assistance program or having rent and income restrictions according to federal or state guidelines.

Key points of the bill include: 1. Qualifying Units: Properties must have at least 20% of units that: - Are part of Section 8 housing assistance. - Are regulated under Section 42g of the Internal Revenue Code with rent and income restrictions. - Receive assistance from the Rural Housing Service under specific conditions. - Have rent and income limits set by federal, state, or local government financial assistance programs.

1. Income and Rent Caps: The income of residents in these units at the time they move in must not exceed 60% of the area or state median income, adjusted for family size. Additionally, the rent for these units cannot exceed 30% of 60% of the area or state median income, again adjusted for family size.

2. Use of Tax Savings: Property owners must use any property tax savings gained from the 4d1 classification for purposes such as property maintenance, security improvements, rent stabilization, or enhancing the property's reserve funds.

3. Annual Compliance: To maintain their 4d1 classification, property owners must annually reapply and certify that they have used their property tax savings for these eligible uses.

The bill is designed to help maintain affordable housing options for low-income residents by extending beneficial tax classifications to qualifying rental properties under specific conditions.