The Minnesota Governor signed House Bill 2695 and Senate Bill 2568 into law on April 1, 2010 giving municipalities the authority to create Compact Development Districts (CDDs), a variation of a traditional TIF district. The purpose of creating CDD is to provide municipalities with more opportunities to use TIF for economic development and job creation. A CDD, unlike a traditional TIF district, does not need to be established in a blighted area. Under the new law, between June 30, 2010 and June 30, 2012 a local legislative body has the authority to designate an area as a CDD if 70% of the area is occupied by commercial and industrial buildings and the planned redevelopment will increase the total square footage of commercial and industrial buildings at least 3 times, compared to the original square footage. The term of a CDD is limited to 25 years.
The new law allows tax increment generated from a CDD to be used to pay for the following:
- Land acquisition;
- Building demolition, removal and site preparation;
- Public infrastructure or public improvements specifically designed to serve transit vehicles; however, roads or other public improvements designated for single occupancy vehicles are expressly excluded; and
- Administrative expenses