Purpose of the Bill

The purpose of this bill is to propose an amendment to the Minnesota Constitution to increase the sales tax by 0.375% to fund housing initiatives. This increase is aimed at creating financial support structures to benefit homeownership, community stability, and rental opportunities for Minnesotans.

Main Provisions

• Sales Tax Increase: The bill proposes to increase the sales tax rate by three-eighths of one percent from July 1, 2027, until June 30, 2052.
• Dedicated Funds:
  • Homeownership Opportunity Fund: 25% of the tax increase will be allocated to this fund to assist in purchasing, creating, and rehabilitating homes for owner-occupancy.
  • Community and Household Stability Fund: Another 25% will support addressing homelessness, providing emergency and legal assistance, and supporting educational and outreach services.
  • Rental Opportunity Fund: 50% will fund rental assistance, support services for renters, and the development of more affordable rental housing.
• Creation of Councils: Each fund will have an advisory council to guide the allocation of funds and recommend policy changes. These councils will consist of a diverse group of appointed members who will develop strategic plans and provide reports to the legislature.

Significant Changes to Existing Law

• New Constitutional Amendment: The bill proposes a constitutional change to include the sales tax increase and dedication of funds for the specified housing purposes.
• Fund Governance: Establishes three new councils (for each fund) to oversee and make recommendations concerning fund expenditures, ensuring alignment with declared goals and community needs.

Relevant Terms

• Sales Tax Increase
• Minnesota Constitution Amendment
• Homeownership Opportunity Fund
• Community and Household Stability Fund
• Rental Opportunity Fund
• Affordable Housing
• Homelessness Prevention
• Emergency Financial Assistance
• Rental Assistance
• Advisory Councils