Committee recommends bill to direct $9 million to supportive-housing providers facing federal funding changes

The Minnesota House Ways and Means Committee on Feb. 24 recommended House File 3425 for placement on the general register after Chair Howard told members the bill repurposes existing, unspent supportive-housing dollars to shore up providers facing imminent federal funding changes.

"Due to actions at the federal level, the funding for these providers has been severely threatened in a manner that really, threatens to upset the apple cart and puts the housing of thousands of our most at-risk Minnesotans in jeopardy," Chair Howard said, describing the bill as a no–general-fund-cost fix that gives the state a short runway while federal changes and litigation play out.

Why it matters: HF 3425 narrows the eligible uses of an existing program appropriation so roughly $9 million of the previously authorized $10 million can be used specifically for permanent supportive housing providers. Supportive housing pairs on-site services with housing to help people with severe mental-health, substance-use or other challenges stabilize and avoid repeated shelter or emergency-care use, advocates and the bill sponsor said.

House Fiscal staff told the committee the law enacted in 2024 set the appropriation at $10 million and that HF 3425 does not increase that total; the bill changes permitted uses. "That amount has not changed," House Fiscal staff said, noting the bill would allow the existing appropriation to be granted in the ways the sponsor outlined.

Members pressed on details the bill leaves to agencies. Representative Claiborne asked how many providers would be eligible if federal Continuum of Care contracts are paused; Chair Howard said it was "dozens and dozens" statewide and offered to provide exact counts to members. On timing, Chair Howard said the bill does not include an explicit expiration trigger for the $9 million but directed the agency to coordinate distribution within 30 days of enactment and said the expectation is the funds would be expended quickly within the year.

Representative Koznick asked about the $1 million difference between the original $10 million appropriation and the $9 million the bill designates. Chair Howard said agencies had used some of the $10 million for planning and administrative purposes and that the bill’s language reflects available, unspent dollars; he argued distribution should be driven by local need rather than an arbitrary metro/outstate split.

Representative Gomez and others discussed the concentration of homelessness-response services in the Twin Cities metro area and the trade-offs between directing dollars to where the immediate need is versus building capacity across Greater Minnesota. Representative Igo said packet materials show the seven-county metro receives roughly $30 million of Continuum of Care dollars and that the new $9 million would be evaluated by need.

Action: Chair Howard renewed his motion that House File 3425 be placed on the general register. The chair called for voice votes; after verbal 'aye' and 'no' responses, the motion prevailed and HF 3425 was recommended for placement on the general register (voice vote). The bill will progress to the general register for further floor consideration.

What remains unresolved: Members asked the agency to provide the exact number of providers affected, clarification on any new vetting requirements providers would face if federal Continuum of Care awards change, and confirmation of the timing and administrative use of the remaining $1 million. The sponsor said he would follow up with those details.

The committee adjourned and moved on to MMB's February forecast presentation.