SF23

The legislative bill SF No 23 focuses on property tax increment financing in Minnesota. It proposes to amend the existing legislation to give more flexibility in how unobligated tax increment funds can be used. Key elements include:

1. The authority can decide (via a resolution) to use these funds for:

   • Supporting private development projects that involve the construction or major rehabilitation of buildings, which must start before December 31, 2025. These projects should ideally create or save jobs within the state.
   • Investing in business entities to make certain construction projects financially viable.

2. The bill sets a yearly limit on how much tax increment money can be transferred, calculated based on the surplus after covering obligatory payments due within six months.

3. To authorize a transfer, the authority needs to create and get municipal approval for a written spending plan. This plan should detail the intended use of the funds. The approval process must include a public hearing announced at least 10 days before the hearing in both a local newspaper and on the municipality’s website.

4. Any misused or ineligible tax increment cannot be reassigned under these rules.

5. The authority needs to provide the spending plan to the State Auditor’s Office for review.

6. The ability to transfer increments expires on December 31, 2022, and all funds must be allocated by December 31, 2025. Any unspent money by this deadline must be returned and, depending on whether the financial district has been decertified, treated as excess increment and distributed accordingly.

This bill aims to use financial flexibility to stimulate economic development and job creation through strategic investments in significant construction projects.