SF4327

Purpose

• Establishes a one-time emergency rental assistance program to provide financial aid to counties and federally recognized tribal governments for eligible households’ rent and utility needs.
• Creates a framework for distributing a specific appropriation, sets administrative requirements, and requires reporting on how funds are used and who benefits.

Key definitions and who is eligible

• Eligible household: a household with a rent obligation for their Minnesota primary residence, income at or below 200% of federal poverty guidelines, and recent financial hardship after August 31, 2025 (such as income loss or unemployment) that puts them at risk of housing instability or homelessness (e.g., risk of eviction).
• Household: all individuals living in a single detached dwelling or a unit of a multiunit building as the primary residence.
• Emergency rental assistance: direct financial support to cover eligible rent-related needs, including up to two months of prospective rent, rent arrears incurred after August 31, 2025, up to two months of prospective utility costs, utility arrears incurred after August 31, 2025, or fines/fees related to nonpayment of rent or utilities.
• Median rent: the latest Census Bureau estimates of median gross rent; for tribal lands without recent data, the median is the average of county medians in Minnesota where the tribal land is located.
• Tribal government: the 11 federally recognized tribes located wholly or partly in Minnesota.
• Not income: the funds distributed are not to be counted as income or assets for most state public assistance programs (e.g., child care, food support, MFIP, MinnesotaCare, housing support, etc.), to the extent allowed by federal law.

How the aid is distributed

• The commissioner of revenue must calculate how much emergency rental assistance is payable to each county and each tribal government.
• Counties receive an amount based on the county distribution formula used to certify aids payable in 2026, using population data and distribution factors, tied to the general appropriation for counties.
• Each tribal government receives an equal share of the tribal portion of the appropriation.
• Aid is intended solely for emergency rental assistance to eligible households and must be administered by the same entities authorized to run related homeless prevention programs.

Use of funds and administration

• Funds must be used for emergency rental assistance to eligible households.
• Eligible households that include at least one minor must be prioritized in distribution.
• Each eligible household may receive up to five times the local median rent (county or tribal) where the household’s primary residence is located.
• Funds must be spent by the last day of the fourth month after the section’s effective date; any unspent funds must be returned to the commissioner within three months of that deadline.
• The commissioner will provide the form and method for notifying about unspent funds and returning them.

Data privacy

• Data about applicants and eligible households is private data, but certain data may be shared to verify eligibility.

Relationship to other public programs

• Emergency rental assistance is not to be treated as income or assets for determining eligibility for state public assistance programs listed (child care, food support, MFIP, MinnesotaCare, etc.) to the extent allowed by federal law.

Certification, payment, and timing

• Within 15 days after the section’s effective date, the commissioner must pay the calculated aid to each county and tribal government and certify the maximum amount each eligible household may receive in its area.

Appropriation and funding

• A onetime appropriation of 40 million dollars from the general fund is provided in fiscal year 2026 for emergency rental assistance.
  • 35.2 million to counties
  • 4.8 million to tribal governments
• The commissioner may not retain any portion of the appropriation for administrative costs.

Spending deadline and reporting requirements

• A spending deadline is set: use funds by the end of the fourth month after the effective date.
• Within three months after the spending deadline, the counties and tribal governments must report detailed information about recipients and distributions to the commissioner, including totals of households served, demographics, and amounts distributed.
• Within five months after the spending deadline, the commissioner must compile the data and report to the legislative auditor and to the chairs and ranking minority members of the tax and housing committees.

Significant changes or impacts to existing law

• Creates a new, one-time emergency rental assistance program funded by a dedicated general fund appropriation for counties and tribal governments.
• Establishes a priority for households with minors and imposes a cap (five times the local median rent) on assistance per eligible household.
• Requires rapid payment to counties/tribal governments and a strict spending window with repayment of any unspent funds to the general fund.
• Treats emergency rental assistance as not counting toward eligibility for many state public assistance programs (per federal law).
• Adds rigorous data privacy protections and mandatory reporting to oversight bodies to increase transparency and accountability.

Relevant terms - emergency rental assistance - eligible household - household - rent arrears - prospective rent - prospective utility costs - utility arrears - median rent - county distribution formula - tribal government - Minnesota Statutes 477A.30 - private data on individuals - not income for public assistance programs - onetime appropriation - funding to counties - funding to tribal governments - spending deadline - unspent funds return - reporting to legislative auditor - housing instability - eviction - minor in household - maximum aid per household - administrative costs (not allowed to be retained)