Tax Increment Financing Bill Would Allow More Small Cities Access to Economic Development TIF for Commercial Developments
Bill reduces radius to authorize small city in closer proximity to a larger city to utilize economic development tax increment financing for qualified commercial development.
The House Property Tax Division on March 8 heard HF 1049 (Rep. Jeff Brand, DFL-St. Peter), a bill that would expand the ability for more small cities under 5,000 in population located within five miles from another city with a population of 10,000 or more to use economic development tax increment financing (TIF) for commercial developments.
HF 1049 was laid over for possible inclusion in the House Property Tax Division report. The Senate companion, SF 1216 (Sen. Aric Putnam, DFL-St. Cloud) awaits action by the Senate Taxes Committee.
How the bill would help small cities with economic development
Current law only allows small cities with a population of 5,000 or less and that are located 10 miles or more from a city with a population of 10,000 or more to use increment from an economic development TIF district for qualified commercial development.
The bill changes the distance requirements from more than 10 miles to more than five miles to allow more smaller cities, especially those in Greater Minnesota, to utilize economic development TIF districts to support qualified commercial development. This would help attract new commercial development and provide another tool for small cities to support their local economic development.
Testimony in support of the bill
Spicer City Administrator and member of the League Board of Directors Jacob Kolander testified in support of the bill as one of the 114 small cities that would have authority to use economic development TIF for commercial developments if the bill were to be passed. Kolander’s testimony focused on the need for additional tools for small cities to attract and support new commercial development in small cities.