Housing provisions modified, income provisions modified, eligible uses for housing aid funds clarified, and technical changes made.

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 project
new text begin
, as described in subdivision 4
new 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 4
deleted text begin
, paragraph
deleted 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 project
new text begin
, as described in subdivision 4
new 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 project
new text begin
, as described in subdivision 4
new 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 4
deleted 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 project
new text begin
, as described in subdivision 4
new 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, a
new text begin
tier I city or county
new 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 aid
deleted text end
new text begin
a tier I city or county
new 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.