SF2667

Purpose

The purpose of this bill is to permit the cities of Minnetonka, Richfield, and St. Louis Park to expand the use of funds generated from tax increment financing (TIF) districts. Specifically, the bill allows these cities to transfer TIF funds to local housing trust funds to support housing development and assistance.

Main Provisions

1. Increase in Expenditure Limit:

   • The bill authorizes each of the three cities to increase their allowed expenditures outside the TIF districts by an additional 15 percentage points.

2. Transfer to Housing Trust Funds:

   • The additional expenditures are strictly to be transferred to housing trust funds established in accordance with state law.

3. Income Requirements for Fund Usage:

   • Funds used for rental housing must benefit households with incomes at or below 80% of the area's median income.
   • Funds used for homeownership must benefit households with incomes at or below 120% of the area's median income.

Significant Changes

• The bill allows a broader application of TIF funds by permitting their transfer to local housing trust funds, supporting affordable housing initiatives beyond the direct boundaries of TIF districts.
• By transferring these funds to housing initiatives, the bill shifts some TIF funds away from traditional development projects to focus on housing needs, aligning with local policies on rental and homeownership assistance.

Relevant Terms

tax increment financing, housing trust fund, economic development, median income, rental housing, homeownership, Minnetonka, Richfield, St. Louis Park