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Lawmakers Advance Changes to State Housing Tax Credit Aimed at Greater Minnesota
The bill would expand eligibility for workforce housing projects and split tax credits evenly between the metro area and Greater Minnesota.
On March 3, the Senate Housing and Homelessness Prevention Committee considered SF 4044, a bill that would modify the Minnesota State Housing Tax Credit (SHTC). The program encourages private investment in housing by allowing taxpayers to receive a credit against their state tax liability if they contribute to the SHTC Contribution Fund.
SF 4044 was passed as amended (pdf) and referred to the Senate Taxes Committee for further consideration.
Bill details
The bill, sponsored by Sen. Carla Nelson (R-Rochester), would better align the program with Greater Minnesota housing needs. It would expand eligibility to allow market-rate workforce housing projects that receive Minnesota Housing’s Workforce Housing Development Program funds to also receive SHTC contributions without the current income restrictions in statute.
The bill would also aim to ensure geographical balance in how the tax credits are distributed. Under the proposal, 50% of credits would be reserved for Greater Minnesota and 50% for the metro area.
Testimony on the bill
The League submitted written testimony in support of the legislation, citing Greater Minnesota’s unique workforce housing needs. Since the SHTC program launched in 2024, all $9.9 million in available tax credits have been fully subscribed.
View the League’s written testimony on SF 4044 (pdf).
What’s next?
The House companion bill, HF 3902, sponsored by Rep. Spencer Igo (R-Wabana Township), was also heard and passed during the week of March 2 by the House Housing Finance and Policy Committee. It was sent to the House Taxes Committee for further consideration.