1.1                          A bill for an act 
  1.2             relating to the city of St. Paul; reinstating the 
  1.3             rental tax equity pilot project; providing for 
  1.4             property tax refunds for participants; appropriating 
  1.5             money. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [RENTAL TAX EQUITY; ST. PAUL PILOT PROJECT.] 
  1.8      Subdivision 1.  [PROGRAM.] A pilot project for rental tax 
  1.9   equity in the city of St. Paul is established.  The program is 
  1.10  available to owners of single- and two-family nonhomestead 
  1.11  property. 
  1.12     Subd. 2.  [PRIMARY OBJECTIVE.] The pilot project's primary 
  1.13  objective is to provide an incentive to landlords to improve 
  1.14  their tenant-occupied property and still offer affordable 
  1.15  housing. 
  1.16     Subd. 3.  [PROPERTY TAX TREATMENT.] (a) Single- and 
  1.17  two-family nonhomestead property located in the city of St. Paul 
  1.18  and existing on the effective date of this section, that is 
  1.19  classified under Minnesota Statutes, section 273.13, subdivision 
  1.20  25, paragraph (b), clause (1), and that meets the requirements 
  1.21  of this section, is eligible for the property tax credit under 
  1.22  subdivision 8. 
  1.23     (b) The program is not a housing or building code 
  1.24  enforcement program.  
  1.25     (c) Participation in the program is voluntary. 
  2.1      (d) If reimbursements under subdivision 8 limit the number 
  2.2   of participants in this program, priority shall be given to 
  2.3   landlords who live in the city of St. Paul. 
  2.4      Subd. 4.  [NOTIFICATION TO OWNERS.] The city of St. Paul 
  2.5   shall notify the owner of each single- and two-family 
  2.6   nonhomestead property located in the city that the property may 
  2.7   be eligible to receive a property tax credit as provided in this 
  2.8   section. 
  2.9      Subd. 5.  [PROGRAM STEPS.] (a) A landlord who owns eligible 
  2.10  property and who wishes to participate must arrange for a 
  2.11  certified evaluator who is licensed by the city of St. Paul to 
  2.12  evaluate the property. 
  2.13     (b) The landlord must notify the tenant of the evaluation 
  2.14  so that the tenant may be present if the tenant wishes. 
  2.15     (c) The evaluator must evaluate the property using program 
  2.16  guidelines adopted by resolution of the St. Paul city council 
  2.17  prior to implementation of the program under this section. 
  2.18     (d) To receive the property tax credit under subdivision 8, 
  2.19  the evaluator must have determined that repairs were necessary, 
  2.20  and the landlord must make the repairs and call for a 
  2.21  reinspection by the evaluator. 
  2.22     If the evaluator identifies life or safety hazards, the 
  2.23  evaluator must notify appropriate city officials, who shall take 
  2.24  immediate action to require and enforce repair of the life or 
  2.25  safety hazard items. 
  2.26     (e) The evaluator must reinspect the property to see if the 
  2.27  program guidelines have been followed. 
  2.28     (f) The evaluator must submit a report on the property's 
  2.29  evaluation to the appropriate city officials, the landlord, and 
  2.30  the tenant.  A filing fee must be paid at the time the report is 
  2.31  submitted to the city. 
  2.32     (g) Appropriate city officials must review the report and 
  2.33  approve it or issue orders for further repair.  In so doing, 
  2.34  city staff members may make an on-site review.  The landlord may 
  2.35  withdraw from the program at any time without making required 
  2.36  repairs except those for life or safety hazards, which may be 
  3.1   otherwise required.  Property for which the evaluator's report 
  3.2   is approved must be certified by the appropriate city officials 
  3.3   to the county assessor.  The city must limit the number of 
  3.4   qualifying properties so that the credit payable under 
  3.5   subdivision 8 does not, in the city's estimate, exceed $500,000. 
  3.6      (h) A landlord who chooses to participate must complete an 
  3.7   application for certification by November 1 of the year before 
  3.8   the taxes payable year for which the credit would be paid. 
  3.9      (i) An owner may apply this program to no more than two 
  3.10  nonhomestead, single- or two-family, tenant-occupied properties. 
  3.11     Subd. 6.  [APPEALS.] (a) The board of equalization must 
  3.12  serve as a board of review to hear appeals relating to the value 
  3.13  of improvements and properties.  Procedures for board actions 
  3.14  and for appeals from board decisions are as provided for other 
  3.15  matters decided by the board of equalization.  
  3.16     (b) The city may appoint a board of appeals to hear 
  3.17  disputes regarding qualification.  The board shall meet to hear 
  3.18  appeals under this program between November 1 and December 1 of 
  3.19  the year before the taxes payable year for which the credit 
  3.20  would be paid. 
  3.21     Subd. 7.  [CITY FEES.] The landlord must pay the housing 
  3.22  evaluator a fee, as determined by the city, for the initial 
  3.23  inspection and necessary reinspections.  The evaluator must pay 
  3.24  a filing fee, as determined by the city, to file the evaluator's 
  3.25  report.  The evaluator may be reimbursed by the landlord for 
  3.26  this fee.  The landlord must pay the city a fee, as determined 
  3.27  by the city, to apply for recertification.  If additional 
  3.28  inspections are required, a reinspection fee, as determined by 
  3.29  the city, must be paid by the landlord. 
  3.30     Subd. 8.  [CREDIT AND REIMBURSEMENT; PROPERTY TAX 
  3.31  STATEMENT.] (a) Property that meets the requirements under this 
  3.32  section is eligible for a property tax credit equal to the 
  3.33  difference between (1) the tax on the property and (2) the tax 
  3.34  that would be payable if the property were classified under 
  3.35  Minnesota Statutes, section 273.13, subdivision 22, paragraph 
  3.36  (a). 
  4.1      (b) The property tax statement provided under Minnesota 
  4.2   Statutes, section 276.04, to an owner of property that receives 
  4.3   the credit under this subdivision must include information on 
  4.4   the amount of the credit given to the property.  The Ramsey 
  4.5   county treasurer shall notify the commissioner of revenue on how 
  4.6   the county plans to modify the property tax statements to 
  4.7   include the necessary information. 
  4.8      (c) Payment from the general fund shall be made as provided 
  4.9   in this subdivision for the purpose of replacing revenue lost as 
  4.10  a result of the reduction of property taxes provided in this 
  4.11  subdivision. 
  4.12     The Ramsey county auditor shall certify to the commissioner 
  4.13  of revenue the amount of reduction in taxes resulting from this 
  4.14  subdivision.  This certification shall be submitted to the 
  4.15  commissioner of revenue as part of the abstracts of tax lists 
  4.16  required to be filed with the commissioner under the provisions 
  4.17  of Minnesota Statutes, section 275.29.  The commissioner of 
  4.18  revenue shall review the certification to determine its accuracy 
  4.19  and make changes in the certification as necessary or return the 
  4.20  certification to the county auditor for corrections. 
  4.21     Based on current year tax data reported in the abstracts of 
  4.22  tax lists, the commissioner of revenue shall determine the 
  4.23  taxing district distribution of the amounts certified.  The 
  4.24  commissioner of revenue shall pay to each taxing district, other 
  4.25  than school districts, its total payment for the year at the 
  4.26  times provided in Minnesota Statutes, section 473H.10.  The 
  4.27  credit reimbursement to school districts must be certified to 
  4.28  the commissioner of education and paid as provided under 
  4.29  Minnesota Statutes, section 273.1392. 
  4.30     The reimbursement paid under this subdivision is limited to 
  4.31  $500,000 each year.  To the extent the amount of credit 
  4.32  originally certified exceeds $500,000 for a year, reimbursements 
  4.33  to the taxing districts shall be prorated according to the 
  4.34  proportions of their levies so as not to exceed $500,000. 
  4.35     Subd. 9.  [REPORT TO THE LEGISLATURE.] By January 15 each 
  4.36  year, the St. Paul city council shall provide a report on the 
  5.1   program to the committee on jobs, energy, and community 
  5.2   development; the committee on taxes of the senate; the committee 
  5.3   on economic development and international trade; and the 
  5.4   committee on taxes of the house of representatives.  The report 
  5.5   must include the program guidelines, housing costs, rents, and 
  5.6   the extent of participation in the program for the year. 
  5.7      Sec. 2.  [PROPERTY TAX REFUNDS; ST. PAUL RENTAL EQUITY 
  5.8   PARTICIPANTS.] 
  5.9      Notwithstanding Minnesota Statutes, section 290A.03, 
  5.10  subdivision 11, for purposes of calculating a claimant's 
  5.11  property tax refund, in the case of a claimant who resides in a 
  5.12  unit certified for participation in the St. Paul rental tax 
  5.13  equity program under section 1, the claimant's "rent 
  5.14  constituting property taxes paid" for a year in which the unit 
  5.15  was certified for participation shall be 20 percent of gross 
  5.16  rent actually paid in cash or its equivalent. 
  5.17     An owner or managing agent of a unit certified for 
  5.18  participation in the rental tax equity project shall indicate 
  5.19  that the unit was certified for participation on the rent 
  5.20  certificate prescribed in Minnesota Statutes, section 290A.19, 
  5.21  paragraph (a).  In the event that the owner or managing agent 
  5.22  fails to provide a rent certificate and the renter obtains a 
  5.23  statement from the county treasurer, as prescribed in Minnesota 
  5.24  Statutes, section 290A.19, paragraph (c), the county treasurer 
  5.25  shall also indicate on the statement if the building was 
  5.26  certified for participation in the rental tax equity project.  
  5.27     Sec. 3.  [EFFECTIVE DATE.] 
  5.28     Section 1 is effective the day following final enactment, 
  5.29  upon compliance with Minnesota Statutes, section 645.021, 
  5.30  subdivision 3, by the city of St. Paul, and applies to taxes 
  5.31  levied in 1997, payable in 1998, and thereafter.