HF 4378 — Onetime Emergency Rental Assistance Aid for Counties and Tribal Governments
Summary overview
HF 4378 is a Minnesota bill establishing a one-time emergency rental assistance (ERA) program funded from the general fund to provide targeted rental and utility assistance to eligible households. The bill designates how funds are distributed, administered, and reconciled, sets eligibility criteria, prioritization for households with minors, and includes reporting and data privacy provisions. It also makes a related set of adjustments to an unrelated prior appropriation and extends the timeline for correcting rent delinquency in eviction notices for a limited period.
Purpose and intent
- Create a one-time ERA aid program for counties and Tribal governments to address rent and utility arrears and prevent housing instability following financial hardship after August 31, 2025.
- Ensure funds are used efficiently, with strong oversight, fraud prevention, and accountability.
- Provide clarity on distribution, administration, eligibility, and the maximum aid per household.
- Improve data reporting and transparency to the Legislature, legislative auditors, and the public.
Key provisions and changes
1) Appropriation and distribution (Section 1)
- Appropriation: $40 million (fiscal year 2026), a one-time General Fund payment for ERA aid.
- $35.2 million to counties
- $4.8 million to Tribal governments
- Eligible recipients: Counties and Tribal governments, or administrating entities, may distribute ERA to eligible households.
- Allocation method: Counties receive aid using the county distribution formula under Minn. Stat. 477A.30, and Tribal governments receive an equal share of their appropriation unless they opt out.
- Opt-out: Tribes may decline in writing within ten days of the effective date.
2) Eligible households and eligible assistance (Subd. 1 and 3)
- Eligible household criteria (definition-based):
- Income at or below 200% of federal poverty guidelines
- Rent obligation for primary residence in Minnesota
- Financial hardship after August 31, 2025
- Risk of housing instability or eviction
- Eligible ERA uses:
- Up to 2 months of prospective rent
- Rent arrears incurred after August 31, 2025
- Up to 2 months of prospective utility costs
- Utility arrears incurred after August 31, 2025
- Fines/fees related to nonpayment of rent/utilities
- Maximum per household: Not to exceed five times the county/Tribal median rent
3) Administration and use of funds (Subd. 3)
- Administrative requirement: 95% of each payment must go to direct ERA; 5% may be used for compliance, misuse prevention, and fraud prosecution.
- Eligible administering entities: Counties, groups of counties or cities, Tribal governments or groups, or a qualified nonprofit that previously administered similar programs.
- Verification: Documentation required for eligibility and need; self-attestation alone is insufficient.
- Prioritization: Households with at least one minor receive priority.
- Spending deadline: All funds must be spent by the last day of the fourth month after the effective date; unspent amounts must be returned to the commissioner for cancellation to the general fund within three months.
- No administrative costs: No retention of funds for administration is allowed by counties, Tribes, or administering entities.
4) Data privacy and treatment of ERA as non-income (Subds. 4–5)
- Data privacy: ERA applicant/household data are private, with limited dissemination for eligibility verification.
- ERA not counted as income/assets: ERA is not considered income for various state programs (child care, SNAP, MFIP, medical assistance, GA/SSI, housing support, MinnesotaCare, or other economic assistance programs).
5) Certification, payment, and reporting (Subds. 6–8)
- Timing: Within 15 days of enactment, the commissioner must pay the aid to counties/Tribal governments and certify maximum eligible amounts for households.
- Reporting: Ongoing reporting every 45 days (and final reporting once all funds are spent or returned). Reports to the legislative auditor and relevant committees, plus a public final report.
6) Related fiscal action (Section 2)
- Return and cancellation of unused funds from a separate, unrelated appropriation (tax-forfeited lands settlement) by June 29, 2026, with cancellation to the general fund.
7) Eviction delinquency extension (Section 3)
- Temporary extension: If rent delinquency isn’t cured within 30 days, landlords may file eviction actions for nonpayment, with explicit notice language about the temporary ERA funding expiration.
- Expiration: This provision expires the last day of the fourth month after the effective date.
Effective date
- The act becomes effective the day after final enactment.
Impact and considerations
- Direct impact: Provides a one-time, targeted funding stream to counties/Tribal governments to prevent evictions and cover rent/utilities arrears and associated fees for eligible households.
- Oversight: Requires documentation, regular reporting, and a 5% administration/oversee allocation for compliance and fraud prevention.
- Equity: Prioritizes households with minors and caps aid relative to local median rents.
- Duration: Short-term, with a defined window for spending and eventual return of unspent funds.
