Technical Tax Increment Financing Bill Heard

March 21, 2022

The bill reflects the agreement of a working group convened by the Office of the State Auditor to address confusing and ambiguous tax increment financing statutes. 

The House Property Tax Division last week considered HF 4281 (Rep. Cheryl Youakim, DFL-Hopkins) and an amendment that contains several technical clarifications and corrections to the statutes governing the use of the tax increment financing (TIF) tool.

The amendment includes a clarification of the definition of administrative expense and the limitation on those expenses, a new definition of “pay-as-you-go” contracts, and notes and clarifications to the existing pooling authorization and restrictions.

The Office of the State Auditor (OSA) convened a working group of city representatives and TIF experts, as well as representatives from counties and school districts and non-partisan legislative staff. The purpose of the meetings was to discuss sections of Minnesota Statutes, section 469 that have created confusion for development authorities and for the OSA in their oversight role.

The group met through January and February to identify issues and develop recommendations to clarify confusing or ambiguous sections of statute. HF 4281 reflects the recommendations of the working group.

State Auditor Julie Blaha testified on behalf of the bill. Deputy State Auditor Jason Nord, who administers the Tax Increment Financing Division, also testified on behalf of the bill. The League and Metro Cities testified in support of the bill as amended.

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