Bill > SF2041

This bill expands the eligible uses of tax increment financing (TIF) districts by allowing transfers of up to 15 percentage points of tax increments to local housing trust funds. Currently, TIF districts can only spend a limited percentage of their tax increments outside the district, primarily on housing-related activities. The new provision specifically allows cities to transfer increments to housing trust funds, with strict income-based requirements: rental housing funds must benefit households at or below 60% of area median income, while homeownership funds must target households at or below 120% of area median income. The transferred funds will no longer be considered tax increments and will be exempt from standard TIF reporting requirements. The bill increases the current 10 percentage point limit to 15 percentage points for expenditures outside the district, providing more flexibility for cities to support affordable housing development. This change aims to help municipalities create and maintain affordable housing options by leveraging tax increment financing resources, with clear guidelines to ensure the funds benefit lower and moderate-income households.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF2041&ssn=0&y=2025