Purpose

The bill creates a one-time Emergency Rental Assistance Aid to help counties and Tribal governments provide rental and utility help to eligible Minnesota households. It sets up a statewide process to distribute money, requires verification of needs, prioritizes households with minors, and requires reporting on how the funds are used. It designates a state office to administer the program, requires returning any unspent funds, and requires a final and ongoing set of reports on usage and outcomes.

What the bill aims to do

• Provide up to two months of prospective rent, up to two months of prospective utility costs, arrears for rent and utilities incurred after August 31, 2025, and related fines/fees for nonpayment.
• Distribute a total one-time appropriation to counties and Tribal governments to administer this aid.
• Ensure funds are used for eligible households and are not counted as income for other state programs.
• Require data collection and regular reporting to oversee the program and prevent misuse.

Key provisions and how it works

• Definitions
  • Eligible household: a household with rent for a Minnesota primary residence, income at/below 200% of federal poverty guidelines, and financial hardship after August 31, 2025, with risk of eviction or homelessness.
  • Emergency rental assistance: supports rent and utilities as described above, including arrears incurred after August 31, 2025, and related fines/fees.
  • Median rent: based on recent U.S. Census data; for tribal land, uses county medians or an average if tribal data isn’t available.
  • Tribal government and tribal land: applies to Minnesota’s federally recognized tribes and their land.
• Distribution (how money is allocated)
  • The state commissioner calculates how much aid each county and Tribal government gets.
  • Counties use their standard distribution formula (as used for 2026 aids) to determine shares.
  • Tribes can decline the aid; if they don’t decline, they share equally in the Tribal appropriation.
• Use of funds
  • 95% of aid must be used to provide emergency rental assistance to eligible households.
  • 5% must be used for program oversight: compliance checks, preventing misuse, and prosecuting fraud.
  • Administered by eligible entities (counties, cities, Tribes, groups of counties or cities, or certain nonprofit organizations that previously ran related programs).
  • Verification required: applicants must provide documentation; self-attestation alone is not enough.
  • Priority: households with at least one minor must be prioritized.
  • Cap: any eligible household may receive up to five times the county or tribal median rent for the residence location.
  • Spending deadline: funds must be spent by the last day of the fourth month after the section becomes effective; any unspent funds must be returned to the state within three months for cancellation to the general fund.
  • No entity may keep any portion of funds for administrative costs.
• Data privacy
  • Applicant data is private, with limited disclosure allowed only to verify eligibility.
• Not income for public programs
  • Emergency rental assistance received is not counted as income or assets for many state aid programs (child care, SNAP, MFIP, medical assistance, housing support, MinnesotaCare, etc.).
• Certification and payment
  • Within 15 days after the section’s effective date, the commissioner must pay the aid to each county and Tribal government and certify the maximum per-household amount.
• Appropriation (funding)
  • A one-time $40 million general fund appropriation for fiscal year 2026.
  • $35.2 million for counties and $4.8 million for Tribal governments.
  • The commissioner may not retain any portion for administrative costs.
• Reporting and oversight
  • Start 45 days after the effective date, and every 30 days, counties/Tribal governments must report to the commissioner on:
  • Number of households helped
  • Demographics of recipients (including household size and whether a minor is present)
  • Range and average amounts distributed per household
  • How many received the maximum allowed
  • Amount spent vs. unspent
  • A final report is due after all funds are spent or returned.
  • By 60 days after the effective date, the commissioner must report to the legislative auditor and relevant legislators with a compilation of data, lists of entities that did not submit required information, and, for the final report, the amount returned to the general fund.
  • A final commissioner’s report is due after all funds are spent or returned.

Administrative timeline and changes to law

• Effective date: the section refers to activities and reporting beginning after the effective date; some actions reference deadlines tied to that date.
• One-time nature: this is a single, nonrecurring appropriation and set of requirements, with strict spending deadlines and a final, comprehensive reporting process.
• Oversight: adds a mandatory, regular reporting cadence to the Legislative Auditor and lawmakers to track usage and outcomes.

Significance and likely impacts

• Expands state support for housing stability by providing targeted emergency rental assistance to eligible households.
• Places strong emphasis on verification, prevention of misuse, and fraud prosecution.
• Sets a cap on benefits relative to local housing costs (five times median rent) to limit aid amounts.
• Removes administrative cost retention, ensuring the entire appropriation is used for aid and oversight.
• Creates formal data collection and reporting requirements to monitor program effectiveness.

Notable changes to existing law

• Establishes a new, onetime emergency rental assistance program funded by a new appropriation.
• Creates a formal framework for distributing funds to counties and Tribal governments, with specific administration and reporting responsibilities.
• Recasts aid as not countable as income for several public assistance programs.
• Adds detailed data privacy rules and a structured reporting regime to track distribution and outcomes.

Relevant Terms - emergency rental assistance - eligible household - median rent - tribal government - tribal land - counties - onetime appropriation - not income - data privacy - verification - administration - housing instability - eviction - fines and fees related to nonpayment - budgeting and spending deadline - reporting to legislative auditor