Senate File 3608 to simplify excess TIF increment reporting is laid over for omnibus tax bill

The Minnesota Senate Taxes Committee introduced Senate File 3608 on Feb. 24, 2026. The bill incorporates recommendations from the Office of the State Auditor to simplify the statutory process and reporting required when a TIF authority has excess tax increment.

Chair Rest said the proposal would not change the substantive obligation to return excess increment but would simplify the reporting process and deadlines. The committee heard Mr. Jason Nord of the OSA explain that the existing statutory calculation for excess increment had legacy complications tied to debt timing and earlier plan accounting practices and that modern reporting allows simplification.

"Our reporting form on excess increment would go from about 20 lines down to 7," Nord said, describing automated calculations that reduce manual inputs. Nord told the committee the proposal removes steps such as looking at debt already due and detailed cross-checks for other funding sources, and would require authorities to decertify once excess increment appears unless they timely amend the TIF plan to increase authorized costs.

Senator Dibble asked why a local unit might try to avoid returning excess increment; committee members and Nord said local jurisdictions often seek flexibility and that practices such as pooling (using increment from well-performing districts to support other projects) and occasional special legislation can affect how authorities manage increment. The OSA said it would provide additional detail on uncodified districts on request.

With no further discussion, the committee laid Senate File 3608 over for possible inclusion in the omnibus tax bill. The committee made no immediate vote on the bill's merits during the hearing.