Senate Committee Considers Update to TIF Redevelopment Rules

A proposed bill aims to modernize Minnesota’s Tax Increment Financing (TIF) law by updating eligibility rules, adjusting the blight test, and shortening redevelopment timelines.

On Feb. 18 the Senate Taxes Committee heard SF 7, a bill focused on TIF, sponsored by Committee Chair Sen. Ann Rest (DFL-New Hope). The bill aims to modernize the 50-year-old TIF law by updating eligibility requirements and timelines to better align with local redevelopment needs.

Key changes in the bill

The bill would modify what is known as the “blight test” by eliminating the lesser used renewal and renovation districts, and by applying that district’s more flexible criteria to redevelopment districts. The bill also would reduce the lifespan of redevelopment districts, shortening it from 25 to 20 years.

Support and concerns

The League of Minnesota Cities and other city organizations praised the effort to update the statute but expressed some concerns about:

• The shortened duration of redevelopment districts.
• The need to extend the five-year rule for project completion.
• A long-requested adjustment to the blight test, changing the requirement from “more than 50%” to simply “50%” structurally substandard buildings.

Committee members were generally supportive of the legislation, though one raised concern that a shorter redevelopment period for districts could be problematic for some cities, especially those establishing development districts in Greater Minnesota. The bill was laid over for possible inclusion in an omnibus tax bill.

House version

The House version of the bill, HF 948, has been introduced and awaits committee action. It is sponsored by House Tax Committee Chair Rep. Greg Davids (R-Preston).

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