Minneslate Logo

SF2041 (Legislative Session 94 (2025-2026))

Increment tax financing districts eligible uses including transfers to local housing trust funds expansion provision

Related bill: HF1159

AI Generated Summary

This bill proposes an amendment to Minnesota's tax increment financing (TIF) laws to expand the eligible uses of tax increments. Specifically, it allows for the transfer of tax increments from TIF districts to local housing trust funds. The bill imposes requirements on how the transferred funds can be used, ensuring they support affordable housing development.

Key provisions include: - At least 75-80% of total revenue from tax increments must still be spent within the district. - Up to 25% (or 20% for certain districts) may be used for activities outside the district. - The bill allows an increase of up to 15% in expenditures outside the district if those expenditures assist in the development of qualifying low-income housing. - Qualified expenditures include site acquisition, construction, rehabilitation, and public improvements related to affordable housing that meets Internal Revenue Code Section 42 requirements. - Funds can also be used to support owner-occupied housing and housing trust funds under Minnesota Statutes Section 462C.16.

This amendment aims to encourage affordable housing development using TIF funds while maintaining controls on their use.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 02, 2025SenateFloorActionIntroduction and first reading
March 02, 2025SenateFloorActionIntroduction and first reading
March 02, 2025HouseFloorActionIntroduction and first reading
March 02, 2025SenateFloorActionReferred toTaxes
March 02, 2025SenateFloorActionReferred toTaxes
March 02, 2025HouseFloorActionReferred toTaxes
March 02, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A new subdivision allowing transfer of tax increment funds to local housing trust funds."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill modifies the rules regarding the use of tax increment financing funds under section 469.1763.",
      "modified": [
        "Increases the permitted amount of expenditures for activities located outside the geographic area of the district by up to ten 15 percentage points under certain conditions."
      ]
    },
    "citation": "469.1763",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "This section refers to the requirements for a qualified low-income building under the Internal Revenue Code.",
      "modified": [
        "Expenditures must assist housing that meets the requirement for a qualified low-income building as defined in section 42."
      ]
    },
    "citation": "42",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "This section defines the metropolitan area for the purpose of market value limits.",
      "modified": [
        "Sets different market value limits for single-family homes within and outside the metropolitan area."
      ]
    },
    "citation": "473.121",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Provides a definition related to residences in foreclosure status.",
      "modified": [
        "Includes provisions for acquiring residences in foreclosure after the redemption period has expired."
      ]
    },
    "citation": "325N.10",
    "subdivision": "subdivision 7"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "References deductions related to expenditures for calculating financing requirements.",
      "modified": [
        "Allows specific costs to be deducted first before calculating expenditure percentages."
      ]
    },
    "citation": "469.176",
    "subdivision": "subdivision 4h"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Related to remedies for misuse of tax increments and the rules for excess increments.",
      "modified": [
        "Refines the definition of expenditures within the district for compliance purposes."
      ]
    },
    "citation": "469.1771",
    "subdivision": [
      "subdivision 2",
      "subdivision 3"
    ]
  }
]

Sponsors