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Legislation in 1998 now requires that both manufacturing and distribution TIF projects on green acre parcels to pay 160 <br />percent of the federal minimum wage to at least 90 percent of the employees. <br />TYPES OF FINANCING <br />Bonds <br />Bonds secured by tax increments are issued when there is a need for initial capital to finance public or private improvements. <br />Typically, the bonds are general obligation bonds backed by the full faith and credit of the municipality. As long as at least <br />20% of the debt service on the bonds is reasonably expected to be paid with tax increments, the bonds may be issued without <br />election. <br />Pay As You Go <br />An alternative to bond financing is a "pay as you go" arrangement with the developer, The developer pays for various <br />TIF -eligible costs initially, and the authority promises to reimburse the developer from tax increment over time as it is <br />generated. The developer (rather than an unrelated bondholder) bears the risk that the increments will be insufficient to repay <br />the costs incurred. <br />This arrangement may be structured as a revenue note or bond issued to the developer, with an interest component to <br />compensate the developer for costs of financing the improvements up front, <br />LOCAL GOVERNMENT AID PENALTY/LOCAL CONTRIBUTION <br />The 2001 Legislature eliminated the provisions for a reduction in state tax increment financing aid (RISTIFA) or the <br />alternative qualifying local contribution. <br />STATUTE OF LIMITATIONS <br />The 2003 Legislature imposed a limitation on legal actions challenging findings made as part of the adoption of a tax <br />increment financing plan, An action must be filed by the later of (1) 180 days after approval; or (2) 90 days from the request <br />for certification. <br />Ehlers & Associates, Inc. - TIF Basics 9 <br />