SF5067

Purpose

This bill aims to address housing needs in Minnesota by creating new funding streams and strengthening supports to prevent homelessness and displacement. It would raise money via a small sales tax increase and deposit that revenue into three dedicated funds focused on housing opportunities and stability, while also updating laws and establishing oversight to guide how the funds are used.

Main Provisions

• Create three new funds:
  • homeownership opportunity fund
  • community and household stability fund
  • rental opportunity fund
• Increase the state sales and use tax rate by three-eighths of one percent to provide money for deposit into the three funds.
• Establish councils to direct how fund expenditures are used, with appointed members and reporting requirements.
• Amend existing Minnesota statutes (sections 297A.62, 297A.65, 297F.25) and codify new laws in chapters 256K and 462A.
• Commit annual general-fund appropriations to these funds for specified uses.
• For the community and household stability fund (a portion of the overall package):
  • Subdivision 1: Define the fund and require money earned by the fund to be credited to it.
  • Subdivision 2: Purpose is to improve the condition of homes and communities and prevent homelessness and displacement.
  • Subdivision 3: Authorized expenditures include:
  • emergency assistance for households or individuals who are homeless or at risk of homelessness or displacement
  • legal services for those same groups
  • outreach services to connect people with help
  • funding the operation of emergency shelters
  • financing the acquisition, rehabilitation, adaptive reuse, or new construction of property to serve as emergency shelter, transitional housing, or permanent supportive housing
  • Subdivision 4: Legislative auditor must audit fund expenditures to ensure money is spent for its intended purposes
  • Subdivision 5: Requires prevailing-wage standards for contracts funded by the measure (as in state projects)

How This Bill Seeks to Accomplish It

• Provide targeted funding to reduce homelessness and housing displacement by supporting immediate needs (emergency assistance, legal aid, outreach) and longer-term housing options (shelters, transitional housing, permanent supportive housing).
• Increase the state’s capacity to improve homes and communities through capital projects and ongoing supports.
• Improve accountability through audits and wage requirements on funded projects.
• Create governance structures (councils) to direct money to tell-and-track projects and outcomes.

Significant Changes to Existing Law

• Establishment of three new housing-focused funds funded by a modest sales tax increase.
• Formal creation of councils to oversee fund expenditures, with appointment and reporting requirements.
• Codification of new housing programs into Minnesota statutes (new chapters 256K and 462A) and amendments to existing statutes (297A.62, 297A.65, 297F.25).
• Implementation of annual general-fund appropriations into the new funds.
• Introduction of prevailing-wage requirements for projects funded through these programs, aligning with state project wage standards.
• Mandatory independent auditing of fund expenditures by the legislative auditor to ensure proper use.

Potential Impacts and Beneficiaries

• Individuals and families experiencing homelessness or at risk of homelessness may receive emergency aid, legal help, and access to stable housing options.
• Communities could benefit from improvements to housing stock and increased availability of emergency shelters, transitional housing, and permanent supportive housing.
• Contractors and projects funded by the new funds would need to comply with state wage standards.

Relevant Terms homeownership opportunity fund; community and household stability fund; rental opportunity fund; sales tax increase; emergency assistance; homelessness; displacement; emergency shelters; transitional housing; permanent supportive housing; legal services; outreach services; acquisition; rehabilitation; adaptive reuse; new construction; prevailing wages; state contracts; legislative auditor; audits; councils; appointments; reporting; general fund; appropriations; Minnesota Statutes; sections 297A.62, 297A.65, 297F.25; chapters 256K, 462A