HF 978

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/30/2023 02:04pm

A bill for an act
relating to taxation; tax increment financing; modifying economic development
district limitation; amending Minnesota Statutes 2022, section 469.176, subdivision
4c.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 469.176, subdivision 4c, is amended to read:

Subd. 4c.

Economic development districts.

(a) Revenue derived from tax increment
from an economic development district may not be used to provide improvements, loans,
subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting
of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities
(determined on the basis of square footage) are used for a purpose other than:

(1) the manufacturing or production of tangible personal property, including processing
resulting in the change in condition of the property;

(2) warehousing, storage, and distribution of tangible personal property, excluding retail
sales;

(3) research and development related to the activities listed in clause (1) or (2);

(4) telemarketing if that activity is the exclusive use of the property;

(5) tourism facilities;

(6) space necessary for and related to the activities listed in clauses (1) to (5); or

(7) a workforce housing project that satisfies the requirements of paragraph (d).

(b) Notwithstanding the provisions of this subdivision, revenues derived from tax
increment from an economic development district may be used to provide improvements,
loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
square feet of any separately owned commercial facility located within the municipal
jurisdiction of a small city, if the revenues derived from increments are spent only to assist
the facility directly or for administrative expenses, the assistance is necessary to develop
the facility, and all of the increments, except those for administrative expenses, are spent
only for activities within the district. new text begin If the separately owned commercial facility is a
multilevel facility, the 15,000 square feet limitation under this paragraph shall apply to the
first floor only. For purposes of this paragraph, "first floor" means the floor at street level.
new text end

(c) A city is a small city for purposes of this subdivision if the city was a small city in
the year in which the request for certification was made and applies for the rest of the
duration of the district, regardless of whether the city qualifies or ceases to qualify as a
small city.

(d) A project qualifies as a workforce housing project under this subdivision if:

(1) increments from the district are used exclusively to assist in the acquisition of
property; construction of improvements; and provision of loans or subsidies, grants, interest
rate subsidies, public infrastructure, and related financing costs for rental housing
developments in the municipality;

(2) the governing body of the municipality made the findings for the project required
by section 469.175, subdivision 3, paragraph (f); and

(3) the governing bodies of the county and the school district, following receipt, review,
and discussion of the materials required by section 469.175, subdivision 2, for the tax
increment financing district, have each approved the tax increment financing plan, by
resolution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification was made after December 31, 2021.
new text end