SF 3173

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/02/2025 10:11 a.m.

A bill for an act
relating to housing; restricting ownership of single-family homes for corporate
entities; providing for increased deed tax rates on conveyances of single-family
homes to corporate owners; dedicating the state portion of revenues from the
increased deed tax rates for the workforce and affordable homeownership program;
creating a statewide landlord database; amending Minnesota Statutes 2024, sections
287.21, subdivision 1; 287.29, subdivision 1; proposing coding for new law in
Minnesota Statutes, chapter 462A; proposing coding for new law as Minnesota
Statutes, chapter 80H.

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

Section 1.

new text begin [80H.01] SINGLE-FAMILY HOME OWNERSHIP; CORPORATE
RESTRICTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Corporate owner" includes any partnership, corporation, or real estate investment
trust that manages funds pooled from investors and is a fiduciary with respect to those
investors.
new text end

new text begin (c) "Homestead" is a property classified as class 1a under section 273.13, subdivision
22.
new text end

new text begin (d) "Single-family home" means a residential property consisting of one to four dwelling
units.
new text end

new text begin Subd. 2. new text end

new text begin Single-family homes; corporate ownership restrictions. new text end

new text begin A corporate owner
is prohibited from having a direct or indirect ownership interest in 50 or more single-family
homes.
new text end

new text begin Subd. 3. new text end

new text begin Exceptions. new text end

new text begin A corporate owner does not include any of the following:
new text end

new text begin (1) a local, state, or federal unit of government, including a state or federal agency;
new text end

new text begin (2) a land trust as defined in section 462A.31;
new text end

new text begin (3) a nonprofit organized under chapter 317A that is creating, rehabilitating, or providing
affordable housing to low- and moderate-income renters or home buyers;
new text end

new text begin (4) an owner of a home that is classified as homestead property for tax purposes;
new text end

new text begin (5) a corporation primarily engaged in housing development through the construction
and rehabilitation of single-family homes; or
new text end

new text begin (6) a mortgage note holder that owns the single-family homes through foreclosure.
new text end

Sec. 2.

new text begin [80H.02] INVESTIGATION AND ENFORCEMENT.
new text end

new text begin If the commissioner of commerce determines that a person has engaged, is engaged, or
is about to engage in an act, practice, sale, transfer, or purchase constituting a violation of
this chapter or a rule or order issued under this chapter the commissioner of commerce has
all the authority provided under section 45.027 to ensure compliance with this chapter. In
addition to the enforcement remedies in section 45.027, if the commissioner of commerce
determines there is a continuing violation 12 months after a cease and desist letter has been
provided to a corporate owner, the commissioner may impose a penalty of $25,000 for each
single-family home owned in excess of 50 in violation of section 80H.01. The commissioner
may assess this fee annually until the corporate owner is in compliance with section 80H.01.
new text end

Sec. 3.

Minnesota Statutes 2024, section 287.21, subdivision 1, is amended to read:

Subdivision 1.

Determination of tax.

(a) A tax is imposed on each deed or instrument
by which any real property in this state is granted, assigned, transferred, or otherwise
conveyed. The tax applies against the net consideration. For purposes of the tax, the
conversion of a corporation to a limited liability company, a limited liability company to a
corporation, a partnership to a limited partnership, a limited partnership to another limited
partnership or other entity, or a similar conversion of one entity to another does not grant,
assign, transfer, or convey real property.

(b) The tax is determined in the following manner: (1) when transfers are made by
instruments pursuant to (i) consolidations or mergers, or (ii) designated transfers, the tax is
$1.65; (2) when there is no consideration or when the consideration, exclusive of the value
of any lien or encumbrance remaining thereon at the time of sale, is $3,000 or less, the tax
is $1.65; deleted text begin or deleted text end (3) new text begin except as provided in clause (4), new text end when the consideration, exclusive of the
value of any lien or encumbrance remaining at the time of sale, exceeds $3,000, the tax is
deleted text begin .0033 deleted text end new text begin 0.0033 new text end of the net consideration new text begin ; or (4) when the consideration, exclusive of the value
of any lien or encumbrance remaining at the time of sale, exceeds $3,000 and when the
deed or instrument being taxed is for a single-family home being granted, assigned,
transferred, or otherwise conveyed to a corporate owner, the tax is 0.5 of the net
consideration. For the purposes of clause (4), "corporate owner" and "single-family home"
have the meanings given in section 80H.01 new text end .

(c) If, within six months from the date of a designated transfer, an ownership interest in
the grantee entity is transferred by an initial owner to any person or entity with the result
that the designated transfer would not have been a designated transfer if made to the grantee
entity with its subsequent ownership, then a tax is imposed at .0033 of the net consideration
for the designated transfer. If the subsequent transfer of ownership interests was reasonably
expected at the time of the designated transfer, the applicable penalty under section 287.31,
subdivision 1, must be paid. The deed tax imposed under this paragraph is due within 30
days of the subsequent transfer that caused the tax to be imposed under this paragraph.
Involuntary transfers of ownership shall not be considered transfers of ownership under this
paragraph. The commissioner may adopt rules defining the types of transfers to be considered
involuntary.

(d) The tax is due at the time a taxable deed or instrument is presented for recording,
except as provided in paragraph (c). The commissioner may require the tax to be documented
in a manner prescribed by the commissioner, and may require that the documentation be
attached to and recorded as part of the deed or instrument. The county recorder or registrar
of titles shall accept the attachment for recording as part of the deed or instrument and may
not require, as a condition of recording a deed or instrument, evidence that a transfer is a
designated transfer in addition to that required by the commissioner. Such an attachment
shall not, however, provide actual or constructive notice of the information contained therein
for purposes of determining any interest in the real property. The commissioner shall
prescribe the manner in which the tax due under paragraph (c) is to be paid and may require
grantees of designated transfers to file with the commissioner subsequent statements verifying
that the tax provided under paragraph (c) does not apply.

Sec. 4.

Minnesota Statutes 2024, section 287.29, subdivision 1, is amended to read:

Subdivision 1.

Appointment and payment of tax proceeds.

(a) new text begin Except as provided in
paragraph (d), new text end the proceeds of the taxes levied and collected under sections 287.21 to 287.385
must be apportioned, 97 percent to the general fund of the state, and three percent to the
county revenue fund.

(b) On or before the 20th day of each month, the county treasurer shall determine and
pay to the commissioner of revenue for deposit in the state treasury and credit to the general
fund the state's portion of the receipts for deed tax from the preceding month subject to the
electronic transfer requirements of section 270C.42. The county treasurer shall provide any
related reports requested by the commissioner of revenue.

(c) Counties must remit the state's portion of the June receipts collected through June
25 and the estimated state's portion of the receipts to be collected during the remainder of
the month to the commissioner of revenue two business days before June 30 of each year.
The remaining amount of the June receipts is due on August 20.

new text begin (d) The proceeds of taxes levied and collected as determined in the manner provided in
section 287.21, subdivision 1, paragraph (b), clause (4), must be apportioned, 97 percent to
the housing development fund of the state, and three percent to the county revenue fund.
Paragraphs (b) and (c) apply to the state portion under this paragraph, except that payments
to the commissioner of revenue under this paragraph must be credited to the housing
development fund. Money deposited in the housing development fund under this paragraph
is appropriated to the commissioner of the Minnesota Housing Finance Agency for the
workforce and affordable homeownership development program in section 462A.38.
new text end

Sec. 5.

new text begin [462A.45] STATEWIDE LANDLORD DATABASE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this
subdivision have the meanings given.
new text end

new text begin (b) "Landlord" has the meaning given in section 504B.001, subdivision 7.
new text end

new text begin (c) "Residential building" has the meaning given in 504B.001, subdivision 11.
new text end

new text begin (d) "Tenant" means a residential tenant as defined in section 504B.001, subdivision 12.
new text end

new text begin Subd. 2. new text end

new text begin Database established. new text end

new text begin The commissioner of commerce shall establish and
maintain a statewide landlord database that collects and retains the information required in
this section. The commissioner must make the database available to the public at no cost.
The commissioner must not charge a fee to a landlord for submitting information to the
database. The database must be searchable and allow tenants and prospective tenants to
report rental units or landlords who cannot be found in the database.
new text end

new text begin Subd. 3. new text end

new text begin Annual submission required. new text end

new text begin (a) Before renting a residential building in the
state or within 60 days of renting a rental unit in the state, a landlord must provide the
following information to the statewide landlord database:
new text end

new text begin (1) the complete legal names of the owners of the residential building and, if the property
is owned by a company or group of investors, the complete legal names of each natural
person who has a direct or indirect ownership interest in the residential building;
new text end

new text begin (2) the business address of each natural person who has an ownership interest in the
residential building;
new text end

new text begin (3) the name, address, and contact information for the landlord or manager of the
residential building; and
new text end

new text begin (4) if the residential building has a rental license, the date of issue, expiration date, and
jurisdiction issuing the license.
new text end

new text begin (b) A landlord must annually update a submission for each rental unit or residential
building that the landlord is renting by February 1 or, if a unit is vacant, before or during
the first 60 days that the rental unit is occupied.
new text end

new text begin (c) A landlord who fails to comply with this subdivision is subject to penalties under
subdivisions 4 and 5.
new text end

new text begin Subd. 4. new text end

new text begin Tenant remedies; civil action; retaliation. new text end

new text begin (a) A tenant or prospective tenant
who is unable to locate a landlord in the statewide landlord database may notify the agency
that the landlord, residential building, or rental unit could not be found and the tenant or
prospective tenant must provide their contact information, the residential building or unit
address, and the contact information for the landlord. The agency must send a letter to the
landlord with information on the database and a notice that the landlord must provide the
landlord's annual submission to the database within 60 days of the date the landlord received
notice of the letter. The agency must send the tenant a copy of the letter. An enforcement
action under subdivision 5 may not be brought until 61 days after the date the letter was
sent under this paragraph if the commissioner believes the landlord is in violation of this
section.
new text end

new text begin (b) A landlord must not increase rent, decrease services, alter an existing lease with the
tenant, file a complaint against the tenant, seek to recover possession of the premises, or
commit any other act or failure to act, in whole or in part, in retaliation after a tenant exercises
a right under this section.
new text end

new text begin Subd. 5. new text end

new text begin Enforcement. new text end

new text begin The commissioner may enforce this section consistent with
section 45.027.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026.
new text end