MN SF3608

Requires authorities to return excess tax increment financing (TIF) increments to the county auditor within nine months after December 31 of each year, and to decertify the TIF district if no outstanding qualifying pay-as-you-go contract exists

Allows deferral of mandatory decertification if the authority approves a modification to the TIF plan within nine months that increases authorized costs by more than the excess increment amount

Simplifies the calculation of "excess increments" by removing deductions for costs paid from other sources, dedicated revenues, and outstanding bond obligations from the formula

Eliminates the previous options allowing authorities to use excess increments to prepay bonds, discharge bond pledges, or fund escrow accounts—now requiring direct return to the county auditor

County auditors must distribute returned excess increments proportionally to the city/town, county, and school district based on their local tax rates; effective for calendar year 2026 and thereafter