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SF2667 (Legislative Session 94 (2025-2026))

Minnetonka, Richfield, and St. Louis Park tax increment financing districts eligible uses for increment expansion

Related bill: HF2324

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 16, 2025SenateFloorActionIntroduction and first reading
March 16, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Authorization to increase expenditures outside districts by 15 percentage points."
      ],
      "removed": [],
      "summary": "The bill increases allowable expenditures outside tax increment financing districts for specific cities under section 469.1763.",
      "modified": []
    },
    "citation": "469.1763"
  },
  {
    "analysis": {
      "added": [
        "Expenditures must be used for transfers to a housing trust fund under section 462C.16."
      ],
      "removed": [],
      "summary": "The bill allows transfer to housing trust funds in accordance with section 462C.16.",
      "modified": []
    },
    "citation": "462C.16"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines the conditions under which transferred increments are no longer considered increments as per section 469.174.",
      "modified": [
        "Increment transferred to a housing trust fund is not considered increment under section 469.174 subdivision 25."
      ]
    },
    "citation": "469.174"
  },
  {
    "analysis": {
      "added": [
        "Exempts transferred increment from annual reporting requirements."
      ],
      "removed": [],
      "summary": "The bill modifies reporting requirements related to increment as specified in section 469.175.",
      "modified": []
    },
    "citation": "469.175"
  }
]

Sponsors