SF2621

Purpose of the Bill

The bill aims to propose an amendment to the Minnesota Constitution to increase sales tax rate and use the additional revenue to support housing initiatives across the state. This effort is directed towards increasing access to homeownership, ensuring stability for communities and households, and boosting rental opportunities for Minnesotans.

Main Provisions

• Sales Tax Increase: Proposes a three-eighths of one percent increase in the sales and use tax rate from July 1, 2027, until June 30, 2052. The generated revenue is dedicated to housing-related funds.
• Specific Funds Created:
  • Homeownership Opportunity Fund: 25% of the tax increase revenue to aid in home creation, purchase, and rehabilitation for owner occupancy.
  • Community and Household Stability Fund: 25% dedicated to providing emergency financial assistance, legal services, and outreach, especially for those at risk of homelessness.
  • Rental Opportunity Fund: 50% aimed at supporting rental assistance and services, as well as developing and rehabilitating rental housing.

Significant Changes to Existing Law

• Constitutional Amendment: The bill subjects the proposed tax increase and allocation to a constitutional amendment, which would require voter approval in the 2026 general election.
• Oversight and Administration: Establishes councils, including the Community and Household Stability Council and the Homeownership Opportunity Council, to oversee fund management, ensure compliance, and suggest appropriations. These councils will also work on strategic plans and report to the legislature.

Statutory Changes

• New statutory sections are created to formalize the funds and councils established under the constitutional amendment, detailing their purposes, fund usage, audit requirements, and the need for adherence to prevailing wage standards on funded projects.

Relevant Terms

• Sales tax increase
• Housing initiatives
• Constitutional amendment
• Homeownership Opportunity Fund
• Community and Household Stability Fund
• Rental Opportunity Fund
• Emergency financial assistance
• Rental assistance
• Housing councils