Bill > HF1159

This bill expands the eligible uses of tax increment financing (TIF) district revenues by allowing cities to transfer up to a certain percentage of tax increment funds to local housing trust funds. Currently, TIF districts are required to spend at least 75-80% of their tax increment revenues within the district, with up to 20-25% allowed for activities outside the district. The bill increases the allowable expenditure outside the district by up to 15 percentage points specifically for housing-related purposes. The transferred funds must be used to support housing for low and moderate-income households, with specific income requirements: rental housing must benefit households at or below 60% of area median income, while homeownership housing can benefit households up to 120% of area median income. Importantly, once transferred to a housing trust fund, these funds are no longer considered tax increment revenues and are exempt from the standard TIF reporting requirements. The bill aims to provide more flexibility for cities to use TIF revenues to support affordable housing development, creating a new mechanism for funding housing initiatives through existing tax increment financing districts.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1159&ssn=0&y=2025