2025 TIF Legislation

During the 2025 legislative session, the Legislature enacted some changes to the TIF Act, most notably including the following:

The 2021 Temporary Transfer Authority provisions (under Minn. Stat. Section 469.176, subd. 4n) that allowed districts with unobligated increment to make transfers in 2021 and 2022 to spur economic activity during the pandemic was amended to:

• push back the deadline prior to which construction must be commenced from December 31, 2025, to December 31, 2026;
• permit the amendment of spending plans prior to December 31, 2025, to extend the deadline for use of transferred increments from December 31, 2025, to December 31, 2026, and to authorize the use of interest earned on transferred increment; and
• clarify the amounts that must be returned if not spent, loaned, invested or otherwise irrevocably committed by the applicable 2025 or 2026 deadline, including amounts subsequently received.

The Legislature enacted 19 special laws providing exceptions to the TIF Act specific to 15 authorities.

Outside of the TIF Act, the Legislature also amended Minn. Stat. Section 127A.49, subd. 3, which addresses how distributions of excess tax increment affect school district aid and levy limits. The amendment added reference to the local option revenue program and updated a reference to the long-term facilities maintenance program (which succeeded health and safety aid). The language also now directs the county auditor to certify to the commissioner of education by February 1 of each year the amount of excess tax increment accrued to a school district during the preceding year. The change to this statute now mirrors the requirement already present in Minn. Stat. Section 469.176, subd. 2(e) of the TIF Act.

Last referenced July 11, 2025 in the State Auditor's Weekly Update.