SF 442

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to housing; adjusting deed tax percentage; providing rental housing
assistance; establishing a housing account for leverage opportunity; appropriating
money; amending Minnesota Statutes 2006, sections 287.21, subdivision 1;
462A.201, by adding a subdivision; 462A.33, by adding a subdivision; proposing
coding for new law in Minnesota Statutes, chapter 462A.

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

Section 1. new text begin HOUSING SOLUTIONS ACT.
new text end

new text begin Sections 2 to 5 shall be known as the Housing Solutions Act.
new text end

Sec. 2.

Minnesota Statutes 2006, 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 $500 or less, the tax is
$1.65; or (3) when the consideration, exclusive of the value of any lien or encumbrance
remaining at the time of sale, exceeds $500, the tax is deleted text begin .0033 deleted text end new text begin .005 new text end of the net consideration.

(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. 3.

Minnesota Statutes 2006, section 462A.201, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin An amount equal to the proceeds of the deed tax under
section 287.21, subdivision 1, paragraph (b), clause (3), on .000688 of the net consideration
is appropriated from the general fund to the commissioner of finance for transfer to the
housing development fund and credit to the housing trust fund account to be used for
rental assistance. No more than ten percent of this appropriation may be used to operate
rental housing under this section. This appropriation to the housing trust fund account
must not be used to supplant appropriation levels for housing in effect on June 30, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 462A.33, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Appropriation. new text end

new text begin An amount equal to the proceeds of the deed tax
under section 287.21, subdivision 1, paragraph (b), clause (3), on .000549 of the net
consideration is appropriated from the general fund to the commissioner of finance for
transfer to the housing development fund to be used for the economic development and
housing challenge program. This appropriation to the housing development fund must not
be used to supplant appropriation levels for housing in effect on June 30, 2007.
new text end

Sec. 5.

new text begin [462A.35] HOUSING ACCOUNT FOR LEVERAGE OPPORTUNITY.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin The housing account for leverage opportunity is created
in the housing development fund. The account must be administered by the agency to
provide matching grants to eligible recipients to preserve, renovate, or develop affordable
home ownership or rental housing.
new text end

new text begin Subd. 2. new text end

new text begin Eligible recipients. new text end

new text begin Eligible recipients are a county; a city, as defined
in section 462A.03, subdivision 21; a housing and redevelopment authority or public
housing agency established under sections 469.001 to 469.047; an economic development
authority established under sections 469.090 to 469.1082; a community development
agency established under section 383D.41; a neighborhood land trust; or a federally
recognized American Indian tribe located in this state.
new text end

new text begin Subd. 3. new text end

new text begin Income limits. new text end

new text begin Households served through the grant must not have
incomes at the time of initial occupancy that exceed, for home ownership projects, 115
percent of the greater of state or area median income as determined by the United States
Department of Housing and Urban Development, and for rental housing projects, 60
percent of the greater of state or area median income as determined by the United States
Department of Housing and Urban Development.
new text end

new text begin Preference among comparable proposals must be given to those that provide housing
opportunities for the broadest range of incomes within the development.
new text end

new text begin Subd. 4. new text end

new text begin Matching requirements. new text end

new text begin (a) A grant from the account must be matched on
a dollar-for-dollar basis by money or the value of the land provided by eligible recipients.
new text end

new text begin (b) The minimum grant is $50,000. The maximum grant to an eligible recipient
each year is $1,000,000.
new text end

new text begin (c) The local match may not include money from any other state or federal program
for the same project.
new text end

new text begin Subd. 5. new text end

new text begin Distribution requirements. new text end

new text begin (a) Except as provided in paragraph (b), not
less than 40 percent of the money granted from the account must be for project applications
submitted by eligible recipients outside of the seven-county metropolitan area as defined
in section 473.121, subdivision 2, and outside of community development entitlement
areas as defined by the United States Department of Housing and Urban Development.
new text end

new text begin (b) In any biennial funding cycle, money not committed to eligible recipients for
affordable housing projects by March 1 of any odd-numbered year is available to provide
grants for projects of eligible recipients without regard to the limitation established in
paragraph (a).
new text end

new text begin (c) Only one matching grant may be awarded within the jurisdictional boundaries of
an eligible recipient each year.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin An amount equal to the proceeds of the deed tax
under section 287.21, subdivision 1, paragraph (b), clause (3), on .000412 of the net
consideration is appropriated from the general fund to the commissioner of finance for
transfer to the account established by subdivision 1. This appropriation must not be used
to supplant appropriation levels for housing in effect on June 30, 2007.
new text end