This bill modifies the eligibility criteria for redevelopment districts under tax increment financing (TIF) in Minnesota by repealing provisions for renewal and renovation districts and shortening the duration limits for TIF. A key amendment defines a "redevelopment district" as requiring that at least 70% of the area is occupied by buildings or similar structures, with specific structural standards. The bill establishes a new effective date, stating that these changes will apply to districts for which the request for certification is made after June 30, 2025. Additionally, it adjusts the duration limits for tax increments, setting a maximum of 20 years for redevelopment districts and 25 years for certain other districts, while emphasizing that municipalities must ensure a significant portion of tax increment revenues is spent within the district.

Furthermore, the bill clarifies the allocation of tax increment revenues, mandating that at least 90% must be used to address conditions justifying the designation of redevelopment districts, including costs related to acquiring properties with substandard buildings, demolition, and essential infrastructure installation. It also allows for an increase in the permitted expenditures for activities outside the district, specifically for housing that meets low-income criteria, and clarifies that administrative expenses can be included in qualifying costs for financing. By streamlining regulations and enhancing flexibility, the bill aims to improve the effectiveness of TIF financing in supporting housing projects and addressing deficits within districts.

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