Minneslate Logo

HF3166 (Legislative Session 94 (2025-2026))

School district approval made a condition of establishing an economic development district.

AI Generated Summary

Purpose of the Bill

The purpose of the bill is to modify the process of establishing a tax increment financing (TIF) economic development district in Minnesota. It requires the approval of school districts before the district can be established, with the exception of certain workforce housing projects.

Main Provisions

  • School District Approval: The bill mandates that a tax increment financing plan for an economic development district must be approved by the school districts that encompass any part of the proposed district. This approval must come through a formal resolution.

  • Exemptions for Workforce Housing: Economic development districts intended for workforce housing projects that meet specific criteria are exempt from requiring school district approval.

  • Public Hearing Requirements: Municipal approval of the tax increment financing plan now requires a public hearing with proper notice and publication of the area involved.

  • Municipal and Authority Functions: If a municipal authority plans to establish a TIF district, it must seek the municipality's approval. The municipality must render a decision on the TIF plan within 60 days of submission by the authority.

  • Location and Housing Requirements: For workforce housing projects, specific findings must be documented, including the housing vacancy rate and the effect on local businesses' staffing needs.

  • Sunset Clause: The bill includes a cutoff date, stating that no new economic development TIF districts for workforce housing can be certified by county auditors after June 30, 2027.

Significant Changes to Existing Law

  • Increased Oversight: The addition of a requirement for school district approval adds another layer of oversight and community involvement in the establishment of economic development TIF districts.

  • Special Provisions for Rural Areas: There are specific stipulations for workforce housing projects outside of the metropolitan area, focusing on housing shortages and business impacts, which were not specified in the previous laws.

  • Restrictive Timelines: The introduction of a deadline for certification requests helps manage and limit the future establishment of such districts.

Relevant Terms

tax increment financing, school district approval, economic development district, workforce housing, municipality, public hearing, vacancy rate, business recruitment, authority approval

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 06, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "New requirement for school district approval before certifying tax capacity."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill modifies the conditions under which a tax increment financing plan must be approved by municipalities.",
      "modified": [
        "Changed the approval process and conditions for economic development districts."
      ]
    },
    "citation": "469.175",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [
        "Clarification on approval and certification process for workforce housing projects."
      ],
      "removed": [
        ""
      ],
      "summary": "This section specifies conditions under which workforce housing projects are exempt from certain economic development district requirements.",
      "modified": [
        "Incorporates specific examples and clarification of terms used."
      ]
    },
    "citation": "469.176",
    "subdivision": "subdivision 4c"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Addresses the method of tax increment computation for tax increments plans.",
      "modified": [
        "Specifies the method of tax increment computation elections by municipalities."
      ]
    },
    "citation": "469.177",
    "subdivision": "subdivision 3"
  },
  {
    "analysis": {
      "added": [
        "Used as a geographical classification in new requirements for workforce housing."
      ],
      "removed": [
        ""
      ],
      "summary": "Defines the metropolitan area for the purposes of certain municipal findings related to workforce housing funding.",
      "modified": [
        ""
      ]
    },
    "citation": "473.121",
    "subdivision": "subdivision 2"
  }
]

Sponsors