SF 2087

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/04/2025 08:57 a.m.

A bill for an act
relating to housing; prohibiting the use of tenant screening software that uses
nonpublic competitor data to set rent; prohibiting the use of tenant screening
software that is biased against protected classes; amending Minnesota Statutes
2024, section 504B.245; proposing coding for new law in Minnesota Statutes,
chapter 504B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [504B.242] SCREENING ALGORITHMS.
new text end

new text begin Subdivision 1. new text end

new text begin Price fixing prohibition. new text end

new text begin (a) A landlord shall not employ, use, or rely
on or cause another person to employ, use, or rely on, an algorithmic device that uses,
incorporates, or was trained on nonpublic competitor data to set the amount of rent to be
charged to a tenant for a residential rental unit.
new text end

new text begin (b) For the purposes of this section, an "algorithmic device" means a device that uses
one or more algorithms to perform calculations of data, including data concerning local or
statewide rent amounts being charged to tenants by landlords for the purpose of advising a
landlord on the amount of rent the landlord may want to consider charging a tenant, including
devices and software more commonly known as revenue management software. An
algorithmic device includes a product that incorporates an algorithmic device, but does not
include a report by a trade association that publishes renter data in the aggregate and
anonymous manner, nor does it include a product that establishes rent or income limits in
accordance with the affordable housing program guidelines of a local government, the state,
or a federal government law or program.
new text end

new text begin (c) For the purposes of this section, "nonpublic competitor data" means information that
is not widely available or easily accessed by the public, including information about actual
rent prices, occupancy rates, lease start and end dates, and similar data, regardless of whether
the data are attributable to a specific competitor or anonymized, when the data are derived
from or otherwise provided by another person that competes in the same housing market
or in a related housing or rental market.
new text end

new text begin Subd. 2. new text end

new text begin Bias algorithms prohibited. new text end

new text begin The use of an algorithm or artificial intelligence
software for background screening is prohibited when the screening tool software is likely
or known to have a disproportionate and arbitrary effect on a protected class listed in section
363A.09, subdivision 1. A landlord who makes a residential rental determination using a
background screening tool that violates this section is liable under section 504B.245. For
the purposes of this subdivision, "algorithm" means a computational process, including one
derived from machine learning, statistics, or other data processing or artificial intelligence
techniques that makes decisions; and "artificial intelligence" means a technology system
that can learn, adapt, and make decisions based on data, often using complex algorithms.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to actions
taken on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2024, section 504B.245, is amended to read:

504B.245 TENANT REPORT; REMEDIES.

In addition to the remedies otherwise provided by law, any person injured by a violation
of section 504B.241 new text begin or 504B.242 new text end may bring a civil action against a residential tenant
screening service or landlord and recover the greater of $1,000 or actual damages, together
with costs and disbursements, including costs of investigation and reasonable attorney fees,
and receive other equitable relief as determined by the court. The attorney general has the
authority to investigate and prosecute violations of section 504B.241.