Office of the Revisor of Statutes
HF 2931
Introduction - 94th Legislature (2025 - 2026)
Posted on 04/02/2025 12:32 p.m.
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A bill for an act
relating to taxation; economic development; increasing allocation to the border
city enterprise zones; modifying tax reduction authority; removing restrictions;
amending Minnesota Statutes 2024, sections 469.169, subdivision 21; 469.171,
subdivisions 1, 4, 6, 6a; 469.1731, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 469.169, subdivision 21, is amended to read:
Subd. 21.
Additional border city allocations.
(a) In addition to the tax reductions
authorized in subdivisions 12 to 20, the commissioner shall annually allocate deleted text begin $750,000deleted text end new text begin
$1,500,000new text end for tax reductions to border city enterprise zones in cities located on the western
border of the state. The commissioner shall allocate this amount among cities on a per capita
basis. Allocations made under this subdivision may be used for tax reductions under sections
469.171, 469.1732, and 469.1734, or for other offsets of taxes imposed on or remitted by
businesses located in the enterprise zone as provided by law, but only if the municipality
determines that the granting of the tax reduction or offset is necessary to retain a business
within or attract a business to the zone.
(b) The allocations under this subdivision do not cancel or expire, but remain available
until used by the city.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2025.
new text end
Sec. 2.
Minnesota Statutes 2024, section 469.171, subdivision 1, is amended to read:
Subdivision 1.
Authorized types.
(a) The following types of tax reductions may be
approved by the commissioner for businesses located in a border city enterprise zone, after
the governing body of the border city has designated an area or areasdeleted text begin , each consisting of at
least 100 acres, of the city not in excess of a total of 400 acresdeleted text end in which the tax reductions
may be provided:
(1) an exemption from the general sales tax imposed by chapter 297A for purchases of
construction materials or equipment for use in the zone if the purchase was made after the
date of application for the zone;
(2) a credit against the income tax of an employer for additional workers employed in
the zone, other than workers employed in construction, up to a maximum of deleted text begin $3,000deleted text end new text begin $5,000new text end
per employee per year;
(3) an income tax credit for a percentage of the cost of debt financing to construct new
or expanded facilities in the zone; and
(4) a state paid property tax credit for a portion of the property taxes paid by a new
commercial or industrial facility or the additional property taxes paid by an expansion of
an existing commercial or industrial facility in the zone.
(b) An application for a tax reduction under this subdivision may not be approved unless
the governing body finds that the construction or improvement of the facility is not likely
to have the effect of transferring existing employment from a location outside of the
municipality but within the state.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for taxable years beginning after December
31, 2024.
new text end
Sec. 3.
Minnesota Statutes 2024, section 469.171, subdivision 4, is amended to read:
Subd. 4.
Restriction.
The tax reductions provided by this section shall not apply to (1)
deleted text begin a facility the primary purpose of which is one of the following: the provision of recreation
or entertainment, or a private or commercial golf course, country club, massage parlor,
tennis club, skating facility including roller skating, skateboard, and ice skating, racquet
sports facility, including any handball or racquetball court, hot tub facility, suntan facility,
or racetrack; (2)deleted text end property of a public utility; deleted text begin (3)deleted text end new text begin (2)new text end property used in the operation of a
financial institution; deleted text begin (4)deleted text end new text begin or (3)new text end property owned by a fraternal or veterans' organizationdeleted text begin ; or
(5) a retail food or beverage facility operating under a franchise agreement that requires the
business to be located in this statedeleted text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
Minnesota Statutes 2024, section 469.171, subdivision 6, is amended to read:
Subd. 6.
Additional border city deleted text begin taxdeleted text end reductions.
In addition to the deleted text begin taxdeleted text end reductionsnew text begin or
reimbursementsnew text end authorized by subdivision 1, for a border city zone, the following types of
tax reductions may be approved:
(1) a credit against income tax for workers employed in the zone and not qualifying for
a credit under subdivision 1, new text begin paragraph (a), new text end clause (2), subject to a maximum of $1,500 per
employee per year;
(2) a state paid property tax credit for a portion of the property taxes paid by a commercial
or industrial facility located in the zonedeleted text begin .deleted text end new text begin ; and
new text end
new text begin
(3) reimbursement of land acquisition costs for business expansion within the zone if
the municipality determines that expansion was necessary to prevent relocation outside the
state.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 5.
Minnesota Statutes 2024, section 469.171, subdivision 6a, is amended to read:
Subd. 6a.
Additional border city allocations.
The commissioner may allocate $2,000,000
for tax reductions pursuant to subdivision 9 to border city enterprise zones. This money
shall be allocated among the zones on a per capita basis. Tax reductions authorized by this
subdivision may not be allocated to any property which is:
deleted text begin
(1) a facility the primary purpose of which is one of the following: the provision of
recreation or entertainment, or a private or commercial golf course, country club, massage
parlor, tennis club, skating facility including roller skating, skateboard, and ice skating,
racquet sports facility, including any handball or racquetball court, hot tub facility, suntan
facility, or racetrack;
deleted text end
deleted text begin (2)deleted text end new text begin (1)new text end property of a public utility;
deleted text begin (3)deleted text end new text begin (2)new text end property used in the operation of a financial institution;new text begin or
new text end
deleted text begin (4)deleted text end new text begin (3)new text end property owned by a fraternal or veterans' organizationdeleted text begin ;deleted text end new text begin .
new text end
deleted text begin
(5) property of a retail food or beverage service business operating under a franchise
agreement that requires the business to be located in the state.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 6.
Minnesota Statutes 2024, section 469.1731, subdivision 1, is amended to read:
Subdivision 1.
Designation.
To encourage economic development, to revitalize the
designated areas, to expand tax base and economic activity, and to provide job creation,
growth, and retention, the following border cities may designate, by resolution, areas of the
city as development zones after a public hearing upon 30-day notice.
(a) The city of Breckenridge may designate all or any part of the city as a zone.
(b) The city of Dilworth may designate deleted text begin between one and six areas of the city as zones
containing not more than 100 acres in the aggregatedeleted text end new text begin all or any part of the city as a zonenew text end .
(c) The city of East Grand Forks may designate all or any part of the city as a zone.
(d) The city of Moorhead may designate deleted text begin between one and six areas of the city as zones
containing not more than 100 acres in the aggregatedeleted text end new text begin all or any part of the city as a zonenew text end .
(e) The city of Ortonville may designate deleted text begin between one and six areas of the city as zones
containing not more than 100 acres in the aggregatedeleted text end new text begin all or any part of the city as a zonenew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end