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CHAPTER 13 - ECONOMIC DEVELOPMENT AND SPECIAL PROGRAMS concern, Individual legislators have echoed these concerns, The overlying taxing districts (counties and schools) have also regularly expressed concern about the failure of development authorities to use surplus increments to decertify districts and return them to the tax rolls, The five-year rule, adopted in 1990, was one effort to address this concern. For a redevelopment district or a renewal and renovation district certified after June 30, 2003, and before April 20, 2009, the five-year period is extended to ten years after certification of the district. This extension is provided primarily to accommodate delays in development activities due to unanticipated economic circumstances. TIF Pooling The term pooling is used to refer to the use of tax increments for activities located outside of the boundaries of the district from which they were collected, Unlike most states' TIF laws, Minnesota law permits increments to be "pooled" or spent outside of the district on other activities. The amount that may be pooled is, however, subject to percentage limits, All districts do not have pooling authority. The authority to pool increments varies, depending upon when the TIF district was created and the type of TIF district, It is useful to distinguish pooling authority based are four separate "eras" when different TIF pooling laws were in effect: 1, Pre -1979 districts: pooling authority unclear, Before enactment of the 1979 TIF act, Minnesota had several separate laws authorizing TIF. None of these laws explicitly allowed "pooling," the statutory terminology generally treated the areas in which the increment was to be collected and spent interchangeably, However, some cities and their advisors concluded (especially in light of later explicit allowance by Minnesota law of TIF pooling) that pooling was permitted and acted accordingly, 2. 1979-1982 districts: no pooling, The 1979 act's language did not allow pooling. The TIF plan was required to provide for improvement of the "district" (i.e., the area certified by the county auditor for the collection of increment), Increments were required to be spent in accordance with the TIF plan. A few lawyers disputed this view and advised cities that they could pool increments, As a result, a few cities pooled increments from districts created during this period. 1999 legislation ratified these decisions, but prohibited future pooling or financing of new activities in these districts. M.S. 469.1764, These rules are discussed below, 3. 1982-1990 districts: unlimited pooling, The 1982 legislature explicitly authorized TIF pooling. This legislation established the distinction between the TIF "district" and the "project area." 1982 Minn. Laws 888-91, ch, 523, art. 38 §§ 3, 6. The law imposed no limit on the amount or percentage of increments that could be pooled, 4. Post -1990: limited pooling. The 1990 legislature imposed percentage limits on the amount of increment that may be pooled. Waiving of Increment TAX INCREMENT FINANCING 13.01 . 25 REVISION DATE: NOVEMBER, 2010