Land monument protection fund established for the public land survey system monument grant program, and new fee set for registration of a mortgage or deed.

A bill for an act

relating to local government; establishing a land monument protection fund for

the public land survey system monument grant program; setting new fee for

registration of a mortgage or deed; amending Minnesota Statutes 2024, sections

287.035; 287.21, subdivision 1; proposing coding for new law in Minnesota

Statutes, chapter 287.

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

Section 1.

Minnesota Statutes 2024, section 287.035, is amended to read:

287.035 IMPOSITION OF TAX.

A tax is imposed on the privilege of recording a mortgage. The tax rate is .0023 of the

debt or portion of a debt that is secured by any recorded mortgage of real property located

in this state. The person liable for the tax is the mortgagor. The tax is not imposed on the

lawful interest amounts that may accrue with respect to a debt.
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The county recorder or

registrar of titles must charge a fee of $....... for each recording of a mortgage and deposit

the revenue into the land monument protection fund under section 287.40. This fee is separate

from fees charged under sections 357.18, 508.81, and 508A.82.
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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 2.

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; or (3) when the consideration, exclusive of the value of any lien or encumbrance

remaining at the time of sale, exceeds $3,000, the tax is .0033 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.

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(e) The county recorder or registrar of titles must charge a fee of $....... for each recording

of a transfer under this section and deposit the revenue into the land monument protection

fund under section 287.40. This fee is separate from fees charged under sections 357.18,

508.81, and 508A.82.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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Sec. 3.

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[287.40] LAND MONUMENT PROTECTION FUND.

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A land monument protection fund is established in the state treasury. The fund consists

of all fees assessed and collected for deposit into the land monument protection fund under

sections 287.035 and 287.21, and any other money donated, allotted, transferred, or otherwise

provided to the fund. Revenue from the fund is annually appropriated to the commissioner

of information technology services for the public land survey system monument grant

program under section 381.125.

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EFFECTIVE DATE.

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This section is effective July 1, 2026.

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