Minnesota SF 585: Herbicide purchase sales and use tax exemption authorization

Bill Text

1.1 A bill for an act​
1.2 relating to taxation; tax increment financing; extending the five- and six-year rules​
1.3 for certain districts; removing income restrictions for certain housing districts;​
1.4 amending Minnesota Statutes 2024, sections 469.1761, subdivision 1; 469.1763,​
1.5 subdivisions 3, 4.​
1.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:​
1.7 Section 1. Minnesota Statutes 2024, section 469.1761, subdivision 1, is amended to read:​
1.8 Subdivision 1.Requirement imposed.(a) In order for a tax increment financing district​
1.9 to qualify as a housing district:​
1.10 (1) the income limitations provided in this section must be satisfied if the district is​
1.11 located in a metropolitan county as defined in section 473.121, subdivision 4; and​
1.12 (2) no more than 20 percent of the square footage of buildings that receive assistance​
1.13 from tax increments may consist of commercial, retail, or other nonresidential uses.​
1.14 (b) The requirements imposed by this section apply to property receiving assistance​
1.15 financed with tax increments, including interest reduction, land transfers at less than the​
1.16 authority's cost of acquisition, utility service or connections, roads, parking facilities, or​
1.17 other subsidies. The provisions of this section do not apply to districts located in a targeted​
1.18 area as defined in section 462C.02, subdivision 9, clause (e).​
1.19 (c) For purposes of the requirements of paragraph (a), the authority may elect to treat​
1.20 an addition to an existing structure as a separate building if:​
1.21 (1) construction of the addition begins more than three years after construction of the​
1.22 existing structure was completed; and​
1​Section 1.​
25-00805 as introduced​12/02/24 REVISOR MS/BM​
SENATE​
STATE OF MINNESOTA​
S.F. No. 585​NINETY-FOURTH SESSION​
(SENATE AUTHORS: KUPEC and Hauschild)​
OFFICIAL STATUS​D-PG​DATE​
Introduction and first reading​165​01/23/2025​
Referred to Taxes​

2.1 (2) for an addition that does not meet the requirements of paragraph (a), clause (2), if it​
2.2 is treated as a separate building, the addition was not contemplated by the tax increment​
2.3 financing plan which includes the existing structure.​
2.4 EFFECTIVE DATE.This section is effective for districts for which the request for​
2.5 certification was made after June 30, 2025.​
2.6 Sec. 2. Minnesota Statutes 2024, section 469.1763, subdivision 3, is amended to read:​
2.7 Subd. 3.Five-year rule.(a) Revenues derived from tax increments paid by properties​
2.8 in the district that are expended on an activity within the district will instead be considered​
2.9 to have been expended on an activity outside the district for purposes of subdivision 2 unless:​
2.10 (1) before or within five years after certification of the district, the revenues are actually​
2.11 paid to a third party with respect to the activity;​
2.12 (2) bonds, the proceeds of which must be used to finance the activity, are issued and​
2.13 sold to a third party before or within five years after certification of the district, the revenues​
2.14 are spent to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,​
2.15 reasonably expected to be spent before the end of the later of (i) the five-year period, or (ii)​
2.16 a reasonable temporary period within the meaning of the use of that term under section​
2.17 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve​
2.18 or replacement fund;​
2.19 (3) binding contracts with a third party are entered into for performance of the activity​
2.20 before or within five years after certification of the district and the revenues are spent under​
2.21 the contractual obligation;​
2.22 (4) costs with respect to the activity are paid before or within five years after certification​
2.23 of the district and the revenues are spent to reimburse a party for payment of the costs,​
2.24 including interest on unreimbursed costs; or​
2.25 (5) revenues are spent for housing purposes as described by subdivision 2, paragraph​
2.26 (b).​
2.27 (b) For purposes of this subdivision, bonds include subsequent refunding bonds if the​
2.28 original refunded bonds meet the requirements of paragraph (a), clause (2).​
2.29 (c) For a redevelopment district or a renewal and renovation district certified after June​
2.30 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a) are​
2.31 extended to ten years after certification of the district. For a redevelopment district certified​
2.32 after April 20, 2009, and before June 30, 2012, the five-year periods described in paragraph​
2​Sec. 2.​
25-00805 as introduced​12/02/24 REVISOR MS/BM​

3.1 (a) are extended to eight years after certification of the district. This extension is provided​
3.2 primarily to accommodate delays in development activities due to unanticipated economic​
3.3 circumstances.​
3.4 (d) For a redevelopment district that