HF 4207
1st Engrossment - 94th Legislature (2025 - 2026)
Posted on 03/26/2026 04:30 p.m.
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A bill for an act
relating to housing; modifying housing provisions; modifying certain income
provisions; clarifying eligible uses for certain housing aid funds; making technical
changes; amending Minnesota Statutes 2024, sections 462A.40, subdivision 3;
477A.36, subdivision 5a; Minnesota Statutes 2025 Supplement, sections 477A.35,
subdivision 5; 477A.36, subdivision 5; proposing coding for new law in Minnesota
Statutes, chapter 462A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 462A.40, subdivision 3, is amended to read:
Subd. 3.
Eligible recipients; definitions; restrictions; use of funds.
(a) The agency
may award a grant or a loan to any recipient that qualifies under subdivision 2. The agency
must not award a grant or a loan to a disqualified individual or disqualified business.
(b) For the purposes of this subdivision disqualified individual means:
(1) an individual who or an individual whose immediate family member made a
contribution to the account in the current or prior taxable year and received a credit certificate;
(2) an individual who or an individual whose immediate family member owns the housing
for which the grant or loan will be used;
(3) an individual who meets the following criteria:
(i) the individual is an officer or principal of a business entity; and
(ii) that business entity made a contribution to the account in the current or previous
taxable year and received a credit certificate; or
(4) an individual who meets the following criteria:
(i) the individual directly owns, controls, or holds the power to vote 20 percent or more
of the outstanding securities of a business entity; and
(ii) that business entity made a contribution to the account in the current or previous
taxable year and received a credit certificate.
(c) For the purposes of this subdivision disqualified business means a business entity
that:
(1) made a contribution to the account in the current or prior taxable year and received
a credit certificate;
(2) has an officer or principal who is an individual who made a contribution to the
account in the current or previous taxable year and received a credit certificate; or
(3) meets the following criteria:
(i) the business entity is directly owned, controlled, or is subject to the power to vote 20
percent or more of the outstanding securities by an individual or business entity; and
(ii) that controlling individual or business entity made a contribution to the account in
the current or previous taxable year and received a credit certificate.
(d) For purposes of this subdivision, "immediate family" means the taxpayer's spouse,
parent or parent's spouse, sibling or sibling's spouse, or child or child's spouse. For a married
couple filing a joint return, the limitations in this subdivision apply collectively to the
taxpayer and spouse.
(e) Before applying for a grant or loan, all recipients must sign a disclosure that the
disqualifications under this subdivision do not apply. The Minnesota Housing Finance
Agency must prescribe the form of the disclosure. The Minnesota Housing Finance Agency
may rely on the disclosure to determine the eligibility of recipients under paragraph (a).
(f) The agency may award grants or loans to a city as defined in section 462A.03,
subdivision 21; a federally recognized American Indian tribe or subdivision located in
Minnesota; a tribal housing corporation; a private developer; a nonprofit organization; a
housing and redevelopment authority under sections 469.001 to 469.047; a public housing
authority or agency authorized by law to exercise any of the powers granted by sections
469.001 to 469.047; or the owner of the housing. The provisions of subdivision 2, and
paragraphs (a) to (e) and (g) of this subdivision, regarding the use of funds and eligible
recipients apply to grants and loans awarded under this paragraph.
(g) new text begin Except for projects receiving funding under section 462A.39, new text end eligible recipients must
use the funds to serve households that meet the income limits as provided in section 462A.33,
subdivision 5.
Sec. 2.
new text begin
[462A.45] LIVED-EXPERIENCE ENGAGEMENT EXEMPTION.
new text end
new text begin
(a) Notwithstanding any law to the contrary, income received from lived-experience
engagement is not considered income, assets, or personal property for purposes of
determining eligibility or recertifying eligibility for state public assistance, including but
not limited to:
new text end
new text begin
(1) child care assistance programs under chapter 142E;
new text end
new text begin
(2) general assistance, Minnesota supplemental aid, and food support under chapters
142F and 256D;
new text end
new text begin
(3) housing support under chapter 256I;
new text end
new text begin
(4) Minnesota family investment program under chapter 142G; and
new text end
new text begin
(5) economic assistance programs under chapter 256P.
new text end
new text begin
(b) For purposes of this section, "lived-experience engagement" means the agency
engaging with people with relevant experience identified by the agency for the purposes of
(1) serving as a community reviewer of proposals submitted as part of an agency request
for proposals, or (2) gathering and sharing feedback on the impact of housing programs.
new text end
new text begin
(c) The commissioner of human services must not consider wages earned from
lived-experience engagement as income or assets under section 256B.056, subdivision 1a,
paragraph (a); subdivision 3; or subdivision 3c, or for persons with eligibility determined
under section 256B.057, subdivision 3, 3a, or 3b.
new text end
Sec. 3.
Minnesota Statutes 2025 Supplement, section 477A.35, subdivision 5, is amended
to read:
Subd. 5.
Use of proceeds.
(a) Any funds distributed under this section must be spent on
a qualifying projectnew text begin , as described in subdivision 4new text end . Funds are considered spent on a qualifying
project if:
(1) a tier I city or county demonstrates to the Minnesota Housing Finance Agency that
the city or county cannot expend funds on a qualifying project by the deadline imposed by
paragraph (b) due to factors outside the control of the city or county; and
(2) the funds are transferred to a local housing trust fund.
Funds transferred to a local housing trust fund under this paragraph must be spent on a
project or household that meets the affordability requirements of subdivision 4deleted text begin , paragraphdeleted text end
deleted text begin (a)deleted text end .
(b) Funds must be spent by December 31 in the third year following the year after the
aid was received. The requirements of this paragraph are satisfied if funds are:
(1) committed to a qualifying project by December 31 in the third year following the
year after the aid was received; and
(2) expended by December 31 in the fourth year following the year after the aid was
received.
(c) An aid recipient may not use aid money to reimburse itself for prior expenditures.
(d) Any program income generated from funds distributed under this section must be
used on a qualifying projectnew text begin , as described in subdivision 4new text end .
Sec. 4.
Minnesota Statutes 2025 Supplement, section 477A.36, subdivision 5, is amended
to read:
Subd. 5.
Use of proceeds.
(a) Any funds distributed under this section must be spent on
a qualifying projectnew text begin , as described in subdivision 4new text end . If a tier I city or county demonstrates to
the Minnesota Housing Finance Agency that the tier I city or county cannot expend funds
on a qualifying project by the deadline imposed by paragraph deleted text begin (b)deleted text end new text begin (c)new text end due to factors outside
the control of the tier I city or county, funds shall be considered spent on a qualifying project
if the funds are transferred to a local housing trust fund. Funds transferred to a local housing
trust fund must be spent on a project or household that meets the affordability requirements
of subdivision 4deleted text begin , paragraph (a)deleted text end .
new text begin
(b) If a Tribal Nation demonstrates to the Minnesota Housing Finance Agency that the
Tribal Nation cannot expend funds on a qualifying project by the deadline imposed by
paragraph (c) due to factors outside the control of the Tribal Nation, funds shall be considered
spent on a qualifying project if the funds are transferred to a Tribal housing fund overseen
by the Tribal Nation. Funds transferred to a Tribal housing fund must be spent on a project
or household that meets the affordability requirements of subdivision 4, paragraph (a).
new text end
deleted text begin (b)deleted text end new text begin (c)new text end Funds must be spent by December 31 in the third year following the year after
the aid was received. The requirements of this paragraph are satisfied if funds are:
(1) committed to a qualifying project by December 31 in the third year following the
year after the aid was received; and
(2) expended by December 31 in the fourth year following the year after the aid was
received.
deleted text begin (c)deleted text end new text begin (d)new text end An aid recipient may not use aid funds to reimburse itself for prior expenditures.
deleted text begin (d)deleted text end new text begin (e)new text end Any program income generated from funds distributed under this section must
be used on a qualifying projectnew text begin , as described in subdivision 4new text end .
Sec. 5.
Minnesota Statutes 2024, section 477A.36, subdivision 5a, is amended to read:
Subd. 5a.
Conditions for receipt.
(a) As a condition of receiving aid under this section,
a recipient must commit to using money to supplement, not supplant, existing locally funded
housing expenditures, so that the recipient is using the funds to create new or to expand
existing housing programs.
(b) In the annual report required under subdivision 6, anew text begin tier I city or countynew text end recipient
must certify compliance with this subdivision, including an accounting of locally funded
housing expenditures in the prior fiscal year. In deleted text begin an aiddeleted text end new text begin a tier I city or countynew text end recipient's first
report to the Minnesota Housing Finance Agency, the aid recipient must document its locally
funded housing expenditures in the two prior fiscal years. If a recipient reduces one of its
locally funded housing expenditures, the recipient must detail the expenditure, the amount
of the reduction, and the reason for the reduction. The certification required under this
paragraph must be made available publicly on the recipient's website.