HF949

This bill is related to the clarification and expansion of how unobligated tax increment financing (TIF) can be used in Minnesota. The main provisions are as follows:

1. Usage of Unobligated Increment: Allows the authority (a city or development agency) to transfer unobligated TIF funds for specific purposes:

   • To support private developments that involve construction or substantial rehabilitation of buildings and facilities which will create or retain jobs, provided construction begins before December 31, 2025, and would not start without such assistance.
   • To make equity investments in businesses (corporations, partnerships, or LLCs) when necessary to ensure financial feasibility for developments that qualify under the first point.

2. Financial Limits: The maximum transfer of funds each year is limited to the amount of unobligated increment remaining after covering six months' worth of obligations on outstanding bonds, contracts, and other financial commitments.

3. Approval and Planning Requirements:

   • The authority must prepare a written spending plan detailing how the transferred funds will be used.
   • This plan must be approved by the municipality after holding a public hearing, with notices published at least 10 days (but not more than 30 days) before the hearing.

4. Oversight and Expiration:

   • Any transfers must be reported to the Office of the State Auditor, including a copy of the approved spending plan.
   • The ability to transfer increments will expire on December 31, 2022.
   • All funds transferred under this provision must be spent, loaned, or invested by December 31, 2025.
   • Any unspent, unloaned, or uninvested funds by that date must be returned to the respective district.

These changes aim to provide more flexibility in the use of tax increment funds to stimulate private development and economic growth while setting strict guidelines and deadlines to ensure accountability.