This bill amends current tax increment financing laws to expand the eligible uses of increment from tax increment financing districts specifically in the cities of Minnetonka, Richfield, and St. Louis Park. It allows these cities to transfer increment to local housing trust funds, with the stipulation that the transferred funds must be used for specific housing purposes. The bill increases the authorization for outside district expenditures under Minnesota Statutes, section 469.1763, subdivision 2, paragraph (d), to 15 percentage points for each of the three cities.

Additionally, the bill outlines requirements for the allocation of transferred increment, mandating that funds used for rental housing must benefit households at or below 80 percent of the area median income, while funds for homeownership must benefit households at or below 120 percent of the area median income. It also specifies 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.