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HF2574 (Legislative Session 94 (2025-2026))

Tax increment financing; use of increment to convert vacant or underused commercial or industrial buildings to residential purposes authorized, and calculation of increment and findings required for a district converting vacant or underused property modified.

Related bill: SF2824

AI Generated Summary

Purpose of the Bill

The bill aims to expand the use of tax increment financing (TIF) to encourage the conversion of vacant or underutilized commercial and industrial buildings into residential properties. It seeks to modify existing frameworks to facilitate this conversion in specific areas, particularly in the cities of Minneapolis and St. Paul.

Main Provisions

  • Expanded Use of TIF: The bill allows for TIF to be used in redeveloping vacant or underused commercial and industrial properties into residential spaces, focusing on localities that need revitalization.
  • Eligibility Criteria: Properties eligible for these conversions are defined as being in areas where a significant portion of buildings are structurally substandard or where the previous use included industrial functions, vacated tank facilities, or rail yards.
  • Calculation Adjustments: Changes to how tax increments are calculated for these redevelopment projects are proposed, aiming to make the process more flexible and supportive of conversion efforts.
  • Structural Standards: A building will receive a structural designation if it requires significant renovations or clearance and does not meet current building codes, unless modifications cost less than a specified percentage of building a new structure.

Significant Changes to Existing Law

  • Redefinition of Redevelopment Districts: The definition and conditions under which a redevelopment district is determined now include more specific requirements for buildings deemed structurally substandard and more detailed criteria for assessing eligibility for TIF.
  • Applicable Regions: The bill specifically includes provisions for properties located within the areas of Minneapolis and St. Paul, emphasizing the need for urban renewal in these cities.

Relevant Terms

  • Tax Increment Financing (TIF)
  • Redevelopment district
  • Structurally substandard
  • Minneapolis and St. Paul
  • Residential conversion
  • Vacant and underused properties

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 19, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The legislation refers to the definition of 'tank facilities' that are utilized as part of a redevelopment district under certain conditions.",
      "modified": []
    },
    "citation": "115C.02",
    "subdivision": "subdivision 15"
  },
  {
    "analysis": {
      "added": [
        "Clarification on buildings considered structurally substandard.",
        "Specification of conditions under which a parcel is considered occupied."
      ],
      "removed": [],
      "summary": "This section defines a redevelopment district and specific criteria for its classification.",
      "modified": [
        "Adjusted to include new criteria for parcels in Minneapolis or St. Paul."
      ]
    },
    "citation": "469.174",
    "subdivision": "subdivision 10"
  },
  {
    "analysis": {
      "added": [
        "Written documentation requirements for findings where interior inspections are not done."
      ],
      "removed": [],
      "summary": "The amendment modifies reporting requirements related to findings and documentation when determining structural conditions.",
      "modified": []
    },
    "citation": "469.175",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [
        "New provisions for parcel evaluation in redevelopment districts."
      ],
      "removed": [],
      "summary": "This section adjusts the determination of original tax capacity in redevelopment areas.",
      "modified": []
    },
    "citation": "469.177",
    "subdivision": "subdivision 1"
  }
]

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