1.1.................... moves to amend H.F. No. 1077, the second engrossment, as follows:
1.2Page 31, after line 24, insert:

1.3    "Sec. 12. Minnesota Statutes 2020, section 504B.178, subdivision 2, is amended to read:
1.4    Subd. 2. Interest Security deposit held during tenancy. Any deposit of money shall
1.5not be considered received in a fiduciary capacity within the meaning of section 82.55,
1.6subdivision 26, but shall be held by the landlord for the tenant who is party to the agreement
1.7and shall bear simple noncompounded interest at the rate of three percent per annum until
1.8August 1, 2003, and one percent per annum thereafter, computed from the first day of the
1.9next month following the full payment of the deposit to the last day of the month in which
1.10the landlord, in good faith, complies with the requirements of subdivision 3 or to the date
1.11upon which judgment is entered in any civil action involving the landlord's liability for the
1.12deposit, whichever date is earlier. Any interest amount less than $1 shall be excluded from
1.13the provisions of this section.

1.14    Sec. 13. Minnesota Statutes 2020, section 504B.178, subdivision 3, is amended to read:
1.15    Subd. 3. Return of security deposit. (a) Every landlord shall:
1.16(1) within three weeks after termination of the tenancy; or
1.17(2) within five days of the date when the tenant leaves the building or dwelling due to
1.18the legal condemnation of the building or dwelling in which the tenant lives for reasons not
1.19due to willful, malicious, or irresponsible conduct of the tenant,
1.20and after receipt of the tenant's mailing address or delivery instructions, return the deposit
1.21to the tenant, with interest thereon as provided in subdivision 2, or furnish to the tenant a
1.22written statement showing the specific reason for the withholding of the deposit or any
1.23portion thereof.
2.1(b) It shall be sufficient compliance with the time requirement of this subdivision if the
2.2deposit or written statement required by this subdivision is placed in the United States mail
2.3as first class mail, postage prepaid, in an envelope with a proper return address, correctly
2.4addressed according to the mailing address or delivery instructions furnished by the tenant,
2.5within the time required by this subdivision. The landlord may withhold from the deposit
2.6only amounts reasonably necessary:
2.7(1) to remedy tenant defaults in the payment of rent or of other funds due to the landlord
2.8pursuant to an agreement; or
2.9(2) to restore the premises to their condition at the commencement of the tenancy,
2.10ordinary wear and tear excepted.
2.11(c) In any action concerning the deposit, the burden of proving, by a fair preponderance
2.12of the evidence, the reason for withholding all or any portion of the deposit shall be on the
2.13landlord.

2.14    Sec. 14. Minnesota Statutes 2020, section 504B.178, subdivision 4, is amended to read:
2.15    Subd. 4. Damages. Any landlord who fails to:
2.16(1) provide a written statement within three weeks of termination of the tenancy;
2.17(2) provide a written statement within five days of the date when the tenant leaves the
2.18building or dwelling due to the legal condemnation of the building or dwelling in which the
2.19tenant lives for reasons not due to willful, malicious, or irresponsible conduct of the tenant;
2.20or
2.21(3) transfer or return a deposit as required by subdivision 5,
2.22after receipt of the tenant's mailing address or delivery instructions, as required in subdivision
2.233, is liable to the tenant for damages in an amount equal to the portion of the deposit withheld
2.24by the landlord and interest thereon as provided in subdivision 2, as a penalty, in addition
2.25to the portion of the deposit wrongfully withheld by the landlord and interest thereon.

2.26    Sec. 15. Minnesota Statutes 2020, section 504B.178, subdivision 5, is amended to read:
2.27    Subd. 5. Return of deposit. Upon termination of the landlord's interest in the premises,
2.28whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or
2.29the landlord's agent shall, within 60 days of termination of the interest or when the successor
2.30in interest is required to return or otherwise account for the deposit to the tenant, whichever
3.1occurs first, do one of the following acts, either of which shall relieve the landlord or agent
3.2of further liability with respect to such deposit:
3.3(1) transfer the deposit, or any remainder after any lawful deductions made under
3.4subdivision 3, with interest thereon as provided in subdivision 2, to the landlord's successor
3.5in interest and thereafter notify the tenant of the transfer and of the transferee's name and
3.6address; or
3.7(2) return the deposit, or any remainder after any lawful deductions made under
3.8subdivision 3, with interest thereon as provided in subdivision 2, to the tenant.

3.9    Sec. 16. Minnesota Statutes 2020, section 504B.178, subdivision 7, is amended to read:
3.10    Subd. 7. Bad faith retention. The bad faith retention by a landlord of a deposit, the
3.11interest thereon, or any portion thereof, in violation of this section shall subject the landlord
3.12to punitive damages not to exceed $500 for each deposit in addition to the damages provided
3.13in subdivision 4. If the landlord has failed to comply with the provisions of subdivision 3
3.14or 5, retention of a deposit shall be presumed to be in bad faith unless the landlord returns
3.15the deposit within two weeks after the commencement of any action for the recovery of the
3.16deposit.

3.17    Sec. 17. Minnesota Statutes 2020, section 504B.178, subdivision 8, is amended to read:
3.18    Subd. 8. Withholding rent. No tenant may withhold payment of all or any portion of
3.19rent for the last payment period of a residential rental agreement, except an oral or written
3.20month to month residential rental agreement concerning which neither the tenant nor landlord
3.21has served a notice to quit, or for the last month of a contract for deed cancellation period
3.22under section 559.21 or a mortgage foreclosure redemption period under chapter 580, 581,
3.23or 582, on the grounds that the deposit should serve as payment for the rent. Withholding
3.24all or any portion of rent for the last payment period of the residential rental agreement
3.25creates a rebuttable presumption that the tenant withheld the last payment on the grounds
3.26that the deposit should serve as payment for the rent. Any tenant who remains in violation
3.27of this subdivision after written demand and notice of this subdivision shall be liable to the
3.28landlord for the following:
3.29(1) a penalty in an amount equal to the portion of the deposit which the landlord is
3.30entitled to withhold under subdivision 3 other than to remedy the tenant's default in the
3.31payment of rent; and
4.1(2) interest on the whole deposit as provided in subdivision 2, in addition to the amount
4.2of rent withheld by the tenant in violation of this subdivision."
4.3Renumber the sections in sequence and correct the internal references
4.4Amend the title accordingly