1.1 A bill for an act
1.2 relating to taxation; economic development; increasing allocation to the border
1.3 city enterprise zones; modifying tax reduction authority; removing restrictions;
1.4 amending Minnesota Statutes 2024, sections 469.169, subdivision 21; 469.171,
1.5 subdivisions 1, 4, 6, 6a; 469.1731, subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 469.169, subdivision 21, is amended to read:
1.8 Subd. 21.Additional border city allocations.(a) In addition to the tax reductions
1.9authorized in subdivisions 12 to 20, the commissioner shall annually allocate $750,000
1.10$1,500,000 for tax reductions to border city enterprise zones in cities located on the western
1.11border of the state. The commissioner shall allocate this amount among cities on a per capita
1.12basis. Allocations made under this subdivision may be used for tax reductions under sections
1.13469.171, 469.1732, and 469.1734, or for other offsets of taxes imposed on or remitted by
1.14businesses located in the enterprise zone as provided by law, but only if the municipality
1.15determines that the granting of the tax reduction or offset is necessary to retain a business
1.16within or attract a business to the zone.
1.17 (b) The allocations under this subdivision do not cancel or expire, but remain available
1.18until used by the city.
1.19 EFFECTIVE DATE.This section is effective July 1, 2025.
1.20 Sec. 2. Minnesota Statutes 2024, section 469.171, subdivision 1, is amended to read:
1.21 Subdivision 1.Authorized types.(a) The following types of tax reductions may be
1.22approved by the commissioner for businesses located in a border city enterprise zone, after
1Sec. 2.
REVISOR MS/ES 25-0480503/12/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2931
NINETY-FOURTH SESSION
Authored by Keeler and Joy03/27/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1the governing body of the border city has designated an area or areas, each consisting of at
2.2least 100 acres, of the city not in excess of a total of 400 acres in which the tax reductions
2.3may be provided:
2.4 (1) an exemption from the general sales tax imposed by chapter 297A for purchases of
2.5construction materials or equipment for use in the zone if the purchase was made after the
2.6date of application for the zone;
2.7 (2) a credit against the income tax of an employer for additional workers employed in
2.8the zone, other than workers employed in construction, up to a maximum of $3,000 $5,000
2.9per employee per year;
2.10 (3) an income tax credit for a percentage of the cost of debt financing to construct new
2.11or expanded facilities in the zone; and
2.12 (4) a state paid property tax credit for a portion of the property taxes paid by a new
2.13commercial or industrial facility or the additional property taxes paid by an expansion of
2.14an existing commercial or industrial facility in the zone.
2.15 (b) An application for a tax reduction under this subdivision may not be approved unless
2.16the governing body finds that the construction or improvement of the facility is not likely
2.17to have the effect of transferring existing employment from a location outside of the
2.18municipality but within the state.
2.19 EFFECTIVE DATE.This section is effective for taxable years beginning after December
2.2031, 2024.
2.21 Sec. 3. Minnesota Statutes 2024, section 469.171, subdivision 4, is amended to read:
2.22 Subd. 4.Restriction.The tax reductions provided by this section shall not apply to (1)
2.23a facility the primary purpose of which is one of the following: the provision of recreation
2.24or entertainment, or a private or commercial golf course, country club, massage parlor,
2.25tennis club, skating facility including roller skating, skateboard, and ice skating, racquet
2.26sports facility, including any handball or racquetball court, hot tub facility, suntan facility,
2.27or racetrack; (2) property of a public utility; (3) (2) property used in the operation of a
2.28financial institution; (4) or (3) property owned by a fraternal or veterans' organization; or
2.29(5) a retail food or beverage facility operating under a franchise agreement that requires the
2.30business to be located in this state.
2.31 EFFECTIVE DATE.This section is effective the day following final enactment.
2Sec. 3.
REVISOR MS/ES 25-0480503/12/25 3.1 Sec. 4. Minnesota Statutes 2024, section 469.171, subdivision 6, is amended to read:
3.2 Subd. 6.Additional border city tax reductions.In addition to the tax reductions or
3.3reimbursements authorized by subdivision 1, for a border city zone, the following types of
3.4tax reductions may be approved:
3.5 (1) a credit against income tax for workers employed in the zone and not qualifying for
3.6a credit under subdivision 1, paragraph (a), clause (2), subject to a maximum of $1,500 per
3.7employee per year;
3.8 (2) a state paid property tax credit for a portion of the property taxes paid by a commercial
3.9or industrial facility located in the zone.; and
3.10 (3) reimbursement of land acquisition costs for business expansion within the zone if
3.11the municipality determines that expansion was necessary to prevent relocation outside the
3.12state.
3.13 EFFECTIVE DATE.This section is effective the day following final enactment.
3.14 Sec. 5. Minnesota Statutes 2024, section 469.171, subdivision 6a, is amended to read:
3.15 Subd. 6a.Additional border city allocations.The commissioner may allocate $2,000,000
3.16for tax reductions pursuant to subdivision 9 to border city enterprise zones. This money
3.17shall be allocated among the zones on a per capita basis. Tax reductions authorized by this
3.18subdivision may not be allocated to any property which is:
3.19 (1) a facility the primary purpose of which is one of the following: the provision of
3.20recreation or entertainment, or a private or commercial golf course, country club, massage
3.21parlor, tennis club, skating facility including roller skating, skateboard, and ice skating,
3.22racquet sports facility, including any handball or racquetball court, hot tub facility, suntan
3.23facility, or racetrack;
3.24 (2) (1) property of a public utility;
3.25 (3) (2) property used in the operation of a financial institution; or
3.26 (4) (3) property owned by a fraternal or veterans' organization;.
3.27 (5) property of a retail food or beverage service business operating under a franchise
3.28agreement that requires the business to be located in the state.
3.29 EFFECTIVE DATE.This section is effective the day following final enactment.
3Sec. 5.
REVISOR MS/ES 25-0480503/12/25 4.1 Sec. 6. Minnesota Statutes 2024, section 469.1731, subdivision 1, is amended to read:
4.2 Subdivision 1.Designation.To encourage economic development, to revitalize the
4.3designated areas, to expand tax base and economic activity, and to provide job creation,
4.4growth, and retention, the following border cities may designate, by resolution, areas of the
4.5city as development zones after a public hearing upon 30-day notice.
4.6 (a) The city of Breckenridge may designate all or any part of the city as a zone.
4.7 (b) The city of Dilworth may designate between one and six areas of the city as zones
4.8containing not more than 100 acres in the aggregate all or any part of the city as a zone.
4.9 (c) The city of East Grand Forks may designate all or any part of the city as a zone.
4.10 (d) The city of Moorhead may designate between one and six areas of the city as zones
4.11containing not more than 100 acres in the aggregate all or any part of the city as a zone.
4.12 (e) The city of Ortonville may designate between one and six areas of the city as zones
4.13containing not more than 100 acres in the aggregate all or any part of the city as a zone.
4.14 EFFECTIVE DATE.This section is effective the day following final enactment.
4Sec. 6.
REVISOR MS/ES 25-0480503/12/25