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HF2324 (Legislative Session 94 (2025-2026))

Minnetonka, Richfield, and St. Louis Park; eligible uses of increment from tax increment financing districts expanded to include transfers to local housing trust funds, and use of transferred increment requirements imposed.

Related bill: SF2667

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to expand the eligible uses of tax increment financing (TIF) in the cities of Minnetonka, Richfield, and St. Louis Park in Minnesota. The expansion specifically allows for the transfer of some of these funds to local housing trust funds to support housing-related initiatives.

Main Provisions

  • Increase in Expenditure Allowance: The bill permits an increase from the standard expenditure limits for activities outside the TIF district. Specifically, the allowable increase is up to 15 percentage points for each city listed.
  • Transfer to Housing Trust Funds: The increased funds must be allocated to local housing trust funds as established by Minnesota law. This aims at enhancing housing options within the communities.
  • Use of Transferred Funds: The transferred funds are intended to benefit low to moderate-income households:
    • For rental housing support, funds should benefit households earning at or below 80% of the area median income.
    • For homeownership support, funds should benefit households earning at or below 120% of the area median income.

Significant Changes to Existing Law

  • The bill introduces a new policy that allows TIF increments to be transferred to local housing trust funds with specified income distribution targets, diverging from their traditional use solely within the TIF districts.
  • Transferred increments under this bill will no longer be classified as TIF increments, meaning they are exempt from the usual annual reporting requirements typically imposed on TIF activities.

Relevant Terms

tax increment financing, TIF districts, housing trust funds, area median income, economic development authority, housing and redevelopment authority, rental housing, homeownership

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 12, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Increases permissible expenditures outside the district for specific cities to 15 percentage points."
      ],
      "removed": [],
      "summary": "The bill allows specified cities to increase outside district expenditures under section 469.1763, subdivision 2, paragraph d.",
      "modified": []
    },
    "citation": "469.1763"
  },
  {
    "analysis": {
      "added": [
        "Specifies that increments transferred must be used in accordance with city ordinances for housing trust funds."
      ],
      "removed": [],
      "summary": "Transfers of increments must be used for housing trust funds established pursuant to section 462C.16.",
      "modified": []
    },
    "citation": "462C.16"
  },
  {
    "analysis": {
      "added": [
        "Transferred increments are exempt from being considered as increments under the specified law."
      ],
      "removed": [],
      "summary": "Defines that transferred increments are not considered as increment under section 469.174, subdivision 25.",
      "modified": []
    },
    "citation": "469.174"
  },
  {
    "analysis": {
      "added": [
        "Exempts transferred increments from annual reporting requirements."
      ],
      "removed": [],
      "summary": "Transferred increments are not subject to the annual reporting requirements of section 469.175.",
      "modified": []
    },
    "citation": "469.175"
  }
]

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