This bill proposes to expand the eligible uses of tax increment financing (TIF) in the cities of Minnetonka, Richfield, and St. Louis Park by allowing the transfer of increment to local housing trust funds. Specifically, it increases the authorization for outside district expenditures under Minnesota Statutes for each of these cities to 15 percentage points. The bill outlines that to qualify for this increase, the funds must be allocated to a housing trust fund established under section 462C.16, which will then be used for rental and homeownership purposes.

Additionally, the bill sets forth requirements for the allocation of transferred increment. Funds designated for rental housing must benefit households earning at or below 80 percent of the area median income, while those for homeownership must assist households at or below 120 percent of the area median income. It also clarifies that any increment transferred for these purposes will no longer be considered increment under section 469.174, subdivision 25, and will not be subject to the annual reporting requirements of section 469.175. The provisions of this bill will take effect the day following its final enactment.