The Minnesota state legislature wrapped up its work by 11:59 pm on Sunday, May 19, 2024. It will be remembered as one of the most chaotic endings to a legislative session in Minnesota history. You can read about the details on MPR.
Generally, during the even-numbered years of the two-year biennium, the legislature focuses on passing policy provisions, supplemental budget items, and capital investment for public infrastructure projects. MCCD’s legislative agenda was heavily focused on economic development policy, but we were also seeking substantial ongoing investments in affordable housing. Read more about what passed and what didn’t.
Economic Development
Economic Development Final Bill Language
The Economic Development and Jobs Committees received a small $1 million budget target, but there have been some changes and cancellations of funding allocated in 2023 that are resulting in roughly $5 million in additional funding expenditures going to fund some direct appropriations for mostly workforce organizations. MCCD’s policy items focused on our DEED Programs Review working group are in both the House and Senate Omnibus Bills.
Policy Changes that passed and will impact the Emerging Entrepreneur Loan Program, Expanding Opportunity Growth Fund, Community Wealth Building Pilot Program, and the Small Business Assistance Partnership Program. We will be working with DEED over the summer and fall to ensure that these changes take effect as soon as possible. We expect to ask for funding increases for these programs during the 2025 legislative session.
- Fee-based lending addition for the Emerging Entrepreneur Loan Program (ELP), Expanding Opportunity Growth Fund, and the Community Wealth Building Pilot.
- 10% interest rate cap for the Emerging Entrepreneur Loan Program (ELP), Expanding Opportunity Growth Fund, and the Community Wealth Building Pilot.
- Eligibility clarification that tribal economic development entities and Community Development Financial Institutions (CDFIs) are eligible to access these programs.
- Streamline the underwriting process for the Emerging Entrepreneur Loan Program by removing duplicative underwriting for certain partner organizations.
- Free technical assistance policy change will adjust the Small Business Partnership Program so that the grant can only be used to provide free technical assistance.
- Incorporate automatic loan forgiveness for borrowers in good standing for the Emerging Entrepreneur Loan Program (10%) and the Community Wealth Building Pilot (15%).
- 15% admin allowance for grantees of the Small Business Assistance Partnership Technical Assistance Program.
- 1% loan closing fee from DEED to help support administrative costs associated with loan closing and servicing for the Emerging Entrepreneur Loan Program and the Expanding Opportunity Growth Fund.
Affordable Housing
Housing Final Funding Spreadsheet
Following last session’s remarkable $1.5 billion investment in housing, housing had a much smaller budget target of only $10 million this session. Below, you will find some of the housing provisions that MCCD worked on or supported.
Housing Infrastructure Bonds – $50 Million
- MCCD led efforts to secure new resources in Housing Infrastructure Bonds. This new investment will help ensure that new development of critically needed affordable housing can continue, while also working to ensure that we preserve our existing affordable housing.
- Expanded eligible uses in HIBs to include, for the first time, the development of cooperatively owned affordable housing.
- MCCD advocated for $500 million in HIBs this session, and we are disappointed that the allocation did not match the very clear need. We will continue to fight for additional investments in HIBs and other housing programs going forward until every Minnesotan has access to a safe and affordable home.
Housing Affordability Preservation Investment Program – $50 Million
- This vital new program will support the recapitalization of distressed affordable housing properties, preserving state-funded affordable housing assets and ensuring that families currently stably housed can remain in their homes.
Emergency Rental Assistance – $8.1 Million
- The Family Homeless Prevention and Assistance Program will receive $8.1 million for the biennium.
These crucial dollars will ensure that Minnesota families remain stable in their housing and will decrease the number of evictions that Minnesota families face.
Task Force on Long-Term Sustainability of Affordable Housing
- This task force will bring together experts from across the sector to study the financial health and stability of affordable housing providers and to provide recommendations to the Minnesota legislature to promote long-term sustainability to prevent the loss of affordable units and promote housing security for renters.
- MCCD was named as an appointee for the task force and will appoint two members with experience operating affordable rental housing.
Metro Sales And Use Tax For Housing
- MCCD supported efforts to clarify in statute that funds from the new Metro Sales and Use Tax will be used as an additional resource, rather than to replace current sources of funding.
- We also supported clarifying that funds from the tax can be used to finance the operations and management of financially distressed properties, supportive services or staff of supportive services providers, and the costs of operating emergency shelter facilities.
Minnesota Cooperative Housing Act (308C)
- This bill creates a new 308C cooperative housing statute that consolidates housing cooperative incorporation and governance under one statute. The purpose of this new chapter is to provide new housing co-ops with a standardized framework for development and to support the enabling environment for co-ops.