HF 2006

as introduced - 94th Legislature (2025 - 2026) Posted on 03/06/2025 02:41pm

A bill for an act
relating to taxation; tax increment financing; clarifying use of unobligated
increment; extending expiration; amending Minnesota Statutes 2024, section
469.176, subdivision 4n.

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

Section 1.

Minnesota Statutes 2024, section 469.176, subdivision 4n, is amended to read:

Subd. 4n.

Temporary use of increment authorized.

(a) Notwithstanding any other
provision of this section or any other law to the contrary, except the requirements to pay
bonds to which increments are pledged, the authority may elect, by resolution, to transfer
unobligated increment for one or more of the following purposes:

(1) to provide improvements, loans, interest rate subsidies, or assistance in any form to
private development consisting of the construction or substantial rehabilitation of buildings
and ancillary facilities, if doing so will create or retain jobs in the state, including construction
jobs, and the construction commences before December 31, 2025, and would not have
commenced before that date without the assistance; or

(2) to make an equity or similar investment in a corporation, partnership, or limited
liability company that the authority determines is necessary to make construction of a
development that meets the requirement of clause (1) financially feasible.

(b) For each calendar year for which transfers are permitted under this subdivision, the
maximum transfer equals the excess of the district's unobligated increment which includes
any increment not required for payments of obligations due during six months following
the transfer on outstanding bonds, binding contracts, and other outstanding financial
obligations of the district to which the district's increment is pledged.

(c) The authority may transfer increments permitted under this subdivision after creating
a written spending plan that authorizes the authority to take the action described in paragraph
(a) and details the use of transferred increment new text begin , including the use of interest earned on
transferred increment new text end . Additionally, the municipality must approve the authority's spending
plan after holding a public hearing. The municipality must publish notice of the hearing in
a newspaper of general circulation in the municipality and on the municipality's public
website at least ten days, but not more than 30 days, prior to the date of the hearing. new text begin Prior
to December 31, 2025, the municipality may amend a written spending plan to extend the
date by which transferred increment may be used, and to authorize use of interest earned
on transferred increment, after holding a public hearing as required in this section. A signed
and approved copy of the amended plan must be filed with the state auditor. Interest earned
on transferred increment may be treated the same as transferred increment regardless of
whether a municipality amends a spending plan.
new text end

(d) Increment that is improperly retained, received, spent, or transferred is not eligible
for transfer under this subdivision.

(e) An authority making a transfer under this subdivision must provide to the Office of
the State Auditor a copy of the spending plan approved and signed by the municipality.

(f) The authority to transfer increments under this subdivision expires on December 31,
2022. All transferred increments must be spent new text begin , loaned, invested, or otherwise irrevocably
committed new text end by December 31, deleted text begin 2025 deleted text end new text begin 2027 new text end . Increment not spent new text begin , loaned, invested, or otherwise
irrevocably committed new text end by December 31, deleted text begin 2025 deleted text end new text begin 2027 new text end , must be returned to the district. If the
district has already been decertified, the increment shall be treated as excess increment and
distributed as provided in subdivision 2, paragraph (c), clause (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end