This bill revises the eligibility criteria for redevelopment districts under tax increment financing (TIF) in Minnesota by introducing new definitions and conditions. It mandates that at least 70 percent of the area must be occupied by specific structures, with a minimum percentage being structurally substandard. The bill also repeals provisions related to renewal and renovation districts, streamlining the types of districts eligible for TIF. Additionally, it extends the maximum duration for redevelopment districts from 15 to 20 years while maintaining a 25-year limit for other district types. Municipalities are required to hold public hearings to approve TIF plans and document their findings on the necessity of such financing.

Furthermore, the bill stipulates that at least 90 percent of tax increment revenues must be allocated to address conditions justifying the designation of redevelopment districts, covering costs like property acquisition, demolition, and infrastructure installation. It allows for an increase in the permitted expenditures for activities outside the district by up to ten percentage points if they assist low-income housing. Administrative expenses related to the development action response plan can also be included in qualifying costs. The effective date for these changes is set for districts requesting certification after June 30, 2025, ensuring that the new regulations will apply to future developments while potentially impacting ongoing projects.

Statutes affected:
Introduction: 469.174, 469.175, 469.176, 469.1763, 273.1382, 469.177