1.1                          A bill for an act 
  1.2             relating to landlords and tenants; correcting a 
  1.3             reference relating to certain civil penalties; 
  1.4             providing for interest rates on security deposits; 
  1.5             amending Minnesota Statutes 1996, sections 504.183, 
  1.6             subdivision 6; and 504.20, subdivision 2. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 504.183, 
  1.9   subdivision 6, is amended to read: 
  1.10     Subd. 6.  [PENALTY.] If a landlord substantially violates 
  1.11  subdivision 2, the tenant is entitled to a penalty which may 
  1.12  include a rent reduction up to full rescission of the lease, 
  1.13  recovery of any damage deposit less any amount retained under 
  1.14  section 504.20, and up to a $100 civil penalty for each 
  1.15  violation.  If a landlord violates subdivision 5, the tenant is 
  1.16  entitled to up to a $100 civil penalty for each violation.  A 
  1.17  tenant shall follow the procedures in sections 566.18 to 566.33 
  1.18  566.34 to enforce the provisions of this section. 
  1.19     Sec. 2.  Minnesota Statutes 1996, section 504.20, 
  1.20  subdivision 2, is amended to read: 
  1.21     Subd. 2.  Any deposit of money shall not be considered 
  1.22  received in a fiduciary capacity within the meaning of section 
  1.23  82.17, subdivision 7, but shall be held by the landlord for the 
  1.24  tenant who is party to the agreement and shall bear simple 
  1.25  noncompounded interest at the rate of three percent per annum 
  1.26  until May 1, 1999 2001, and four percent per annum thereafter, 
  2.1   computed from the first day of the next month following the full 
  2.2   payment of the deposit to the last day of the month in which the 
  2.3   landlord, in good faith, complies with the requirements of 
  2.4   subdivision 3 or to the date upon which judgment is entered in 
  2.5   any civil action involving the landlord's liability for the 
  2.6   deposit, whichever date is earlier.  Any interest amount less 
  2.7   than $1 shall be excluded from the provisions of this section.