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CHAPTER 13 - ECONOMIC DEVELOPMENT AND SPECIAL PROGRAMS Captured tax capacity is the current property tax capacity of the parcels of property in the TIF district area, less the original tax capacity. M.S. 469.177, subd. 2. Captured tax capacity multiplied by the original local tax rate yields the amount of increment. Certification request date is the reference date for an increment district's request to the county auditor for the certification of original values and original local tax rates for the properties comprising the increment district. For a request that is mailed to the county auditor, it is the postmark date on the mailing envelope. For a request that is hand delivered to the county auditor, it is the delivery date which should be stamped on the request by the county auditor. The certification request date is not the date that the county auditor certifies the requested original values to the increment district. A compact development TIF district is a type of TIF district used to finance the redevelopment of areas occupied by commercial industrial buildings and other structures. To qualify as a compact development district, 70 percent of the district's area must be occupied by buildings and structures classified as 3a. The planned redevelopment or development of the district, when completed, must increase the total square footage of buildings, occupying the district by three times or more relative to the square footage of similar buildings occupying the district when the resolution was approved.. The duration of a redevelopment district is limited to 25 year from the receipt of the first increment. M.S. 469.176, subd. 1(e). Credit enhanced bonds are TIF revenue bonds that are secured by pledges of increments from several TIF districts. M.S. 469.174, subd. 21. Credit enhanced bonds are used to finance improvements in a TIF district and rely, first, on the increments from that district for repayment. However, if those increments (contrary to initial estimates) are not sufficient, increments from other districts may be used to pay the bonds. These payments do not violate the percentage limits on pooling of increments applicable to post - 1990 districts---i.e., payment of credit enhanced bonds are considered to be payments for improvements located in the TIF district. M.S. 469.1763, subd. 2(a); 5. To qualify as credit enhanced bonds: (1) 75 percent of the proceeds of the bonds must be used to finance improvements in the district and (2) the issuer must estimate (at the time of issuance) that the revenues from the district will be sufficient to the pay the bonds. M.S. 469.174, subd. 21. Deficit reduction provisions authorize a development authority or municipality with a preexisting district to take steps to increase increments, if the 2001 property tax reform reduced the district's increments by so much that it cannot pay the preexisting (pre -2001) obligations. The permitted deficit reduction options include: 1. Transferring surplus increments from other districts, M.S. 469.176, subd. 6 2. Increasing the original tax capacity to the current rate, M.S. 469.1792, subd.3(1) 3. Changing fiscal disparities options, M.S. 469.1792, subd.3(2) 4. Extending how long the district can legally collect increment M.S. 469.1793. A development authority or authority is a government entity authorized by the TIF law to exercise tax increment financing powers. M.S. 469.174, subd. 2. Authorities include cities (exercising powers under the city development district law or the municipal industrial development act), economic development TAX INCREMENT FINANCING 13.01 - 33 REVISION DATE: NOVEMBER, 2010