Minnetonka, Richfield, and St. Louis Park; eligible uses of increment from tax increment financing districts expanded to include transfers to local housing trust funds, and use of transferred increment requirements imposed.
Summary
HF2324 would expand the allowable use of tax increment financing (TIF) revenue for the cities of Minnetonka, Richfield, and St. Louis Park. Under current law, these cities already have limited authority to spend a portion of TIF outside the district; this bill increases that authority to 15 percentage points for each city or their designated development/housing entities, but only when the money is transferred to a local housing trust fund established under state law.
The bill also sets conditions on how the transferred increment must be used. Funds placed into the housing trust fund must be distributed according to each city’s ordinance or policy for rental and homeownership assistance, with rental uses benefiting households at or below 80% of area median income and homeownership uses benefiting households at or below 120% of area median income. Once transferred, the money is no longer treated as TIF increment for purposes of the general TIF definition and annual reporting requirements. The bill takes effect the day after final enactment.
Impact
HF2324 would amend Minnesota’s tax increment financing framework as applied to three named cities by creating a special authorization to redirect a larger share of increment to local housing trust funds. It would affect the cities of Minnetonka, Richfield, and St. Louis Park, along with their economic development authorities or housing and redevelopment authority, and would tie the use of those funds to income-qualified housing purposes. The bill would also remove transferred amounts from the statutory definition of increment and from annual TIF reporting obligations.
Sentiment
The available record shows no committee transcript or recorded votes, so there is no documented debate or formal vote history to indicate broad support or opposition. Based on the bill’s structure, it appears to be a targeted housing-finance measure intended to support local affordable housing efforts through existing TIF resources. The absence of recorded controversy suggests the bill was, at least at introduction, a technical/local policy proposal rather than a highly contentious statewide measure.
Contention
The main policy questions raised by the bill are likely to center on the use of TIF revenue for housing trust funds instead of other redevelopment purposes, and on the decision to grant this expanded authority only to three specific cities. Potential points of concern include whether diverting increment outside the district reduces resources for other local priorities, whether the income thresholds are appropriately targeted, and whether the special treatment for named cities creates unequal access to financing tools compared with other municipalities.
Eligible uses of increment from tax increment financing districts expanded to include transfers to local housing trust funds, and requirements on use of transferred increment imposed.
Minnetonka, Richfield, and St. Louis Park; eligible uses of increment from tax increment financing districts expanded to include transfers to local housing trust funds, and use of transferred increment requirements imposed.
Maximum life and allocation period for Tax Incremental District Number 9 in the village of DeForest and the total value of taxable property that may be included in tax incremental financing districts created in the village of DeForest. (FE)
Maximum life and allocation period for Tax Incremental District Number 9 in the village of DeForest and the total value of taxable property that may be included in tax incremental financing districts created in the village of DeForest. (FE)
Payment rates established for certain substance use disorder treatment services, and vendor eligibility recodified for payments from the behavioral health fund.
Cover Outstanding Vulnerable Expansion-eligible Residents Now Act or the COVER Now Act This bill establishes a demonstration program to allow local governments to provide health benefits to the Medicaid expansion population in states that have not expanded Medicaid. Under the program, local governments may provide coverage for individuals who are newly eligible for Medicaid under the Patient Protection and Affordable Care Act (i.e., the Medicaid expansion population) for a maximum of 10 years, or until their respective states expand Medicaid. The bill provides a 100% federal matching rate for the first three years of program participation. The bill prohibits states from taking certain actions against participating localities, such as withholding funding, increasing taxes, or restricting provider participation. States that violate these requirements are subject to certain funding penalties.