Purpose of the Bill

The bill aims to make the class 4d1 low-income rental property aid a permanent fixture in Minnesota's tax code. This aid is designed to support cities with low-income rental properties by providing them financial assistance.

Main Provisions

• Permanency of Aid: The bill proposes that low-income rental property aid for cities be made permanent.
• Aid Calculation: The amount of aid a city receives is calculated based on the city's tax rate for taxes payable in 2024 and is multiplied by the city's modified tax capacity.
• Definitions:
  • Class 4d1 Property: Defined as low-income rental property under section 273.13, subdivision 25.
  • Modified Tax Capacity: A specific calculation involving the city's tax rate and the representation of the low-income rental properties within its boundaries.
  • 4d1 Ratio: This involves a comparison of property tax capacities across specified years to determine aid adjustments.

Administration

• The Commissioner of Revenue will determine and certify the net tax capacities and the aid amounts by specified dates.
• Payment of the aid will be executed in two installments, as per the guidelines in section 477A.015.

Appropriation

The bill includes a provision for annual appropriation from the general fund to cover the low-income rental property aid. This ensures that the payments to cities can be made without delay.

Significant Changes to Existing Law

This legislation formally incorporates the low-income rental property aid into Minnesota statutes, thus shifting it from a temporary or pilot status to a permanent financial support measure for low-income housing.

Relevant Terms

• Low-Income Rental Property
• Class 4d1 Property
• Modified Tax Capacity
• 4d1 Ratio
• City Tax Rate
• Revenue Commissioner