S.F. No. 1168 makes several changes to tax increment financing general law by allowing economic development TIF increment to be used for certain workforce housing.
Section 1. Economic development districts. Modifies the definition of an economic development tax increment financing district by allowing a workforce housing project (outlined in Section 2) to be among the eligible criteria.
Section 2. Municipality approval. Requires that before or at the time of approval of a tax increment financing plan for a district to be used to fund workforce housing, the municipality must make the following findings:
the city is located outside the metropolitan area;
the average vacancy rate for rental housing in a municipality and in any statutory or home rule charter city located within 15 miles or less of the boundaries of the municipality has been 3% or less for at least the immediately preceding two-year period;
at least one business in the municipality or within 15 miles of the municipality that employs a minimum of 20 full-time employees has provided a written statement indicating that the lack of available rental housing has impeded their ability to hire/recruit employees; and
the municipality and the development authority intend to use increment from the district for the development of rental housing to serve employees of businesses located in the city or surrounding area.
Section 3. Economic development districts. Allows increment derived from an economic development district to be spent on workforce housing projects. A workforce housing project qualifies if increments from the district are used exclusively in the acquisition of property, construction of improvements, and provisions of loans or subsidies, grants, interest rate subsidies, public infrastructure, and related costs for rental housing developments in the city.
Section 4. Income limits. Provides that for a project receiving a loan or grant from the Minnesota Housing Finance Agency challenge program, the income limits are substituted for the applicable income limits found within the definition of housing projects under tax increment financing law.
Effective for districts for which the request for certification of the district is made after June 30, 2017.