10-28-2015 Council Packet - Laserfiche WebLink

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CHAPTER 13 - ECONOMIC DEVELOPMENT AND SPECIAL PROGRAMS because the authority has only limited taxing authority, a general tax levy cannot be imposed to make up the shortfall. Development authorities may establish a guaranty fund to pay environmental liability costs. M.S. 469.1765. A guaranty fund can be financed with either increments or other revenues. It can be used to indemnify or provide insurance against environmental liability for someone using or financing property in a TIF district. A hazardous substance subdistrict is a type of TIF district that is used to finance the clean-up cost of properties containing pollution. M.S. 469.175, subd. 7. A hazardous substance subdistrict is created within another, regular TIF district. The original tax capacity of the subdistrict is reduced by the cost of clean-up (but not below zero), providing immediate increment from the existing property value. M.S. 469.174, subd. 7(b). A hazardous substance site may only collect increments for the lesser of 25 years from the receipt of the first increment or the time necessary to recover the cost of cleaning up the pollution. M.S. 469.176, subd. le. The duration of the part of the overlying district containing the subdistrict is also extended for the duration of the subdistrict. The additional increments received as a result of reducing the original tax capacity by the clean-up costs niay only be used to pay clean-up and related costs. M.S. 469.176, subd. 4e. This restriction apparently (it is not crystal clear in the statute) applies to the other increments collected during the extension period (i.e., increments that don't result from the "write-down" but that are collected after the end of overlying district's regular duration limit). Housing districts are TIF districts created and used primarily to provide housing for low and moderate - income families. M.S. 469.174, subd. 11. To qualify as a housing district, 80 percent or more of the value of the assisted development must be used for low and moderate -income housing. In addition, specified income guidelines apply to individuals occupying the housing. M.S. 469.1761. The geographic area of a housing district need not meet the "blight criteria" required for redevelopment districts. Other types of TIF districts, such as redevelopment districts, may provide assistance to housing developments. These districts are not subject to the income or other restrictions that apply to housing districts. Housing and redevelopment authorities (HRAs) are development agencies authorized to exercise TIF powers for redevelopment and housing projects. M.S.§ 469.001 - 469.047; 469.174, subd. 2. Any city or county may establish an HRA. M.S.§ 469.003, subd. 1; 469.004. The county authorization, however, does not extend to Ramsey county or to counties with housing authorities established under special laws. Interest rate write-down programs may use tax increments to subsidize the interest payments on private loans to finance low-income rental housing developments and "related and subordinate facilities[.]" M.S.§ 469.174, subd. 8; 469.176, subd. 4; 469.033, subd. 1; 469.002, subd. 12; 469.012, subd 7, 8, and 9. Tax increments from a district may not be collected to provide interest reduction programs for more than 15 years. This limit starts with the first interest reduction payment. Interest reduction programs may not be used for owner -occupied, single-family dwellings. M.S. 469.176, subd. 4f. lnterfund loans are loans or advances made by the development authority or municipality to pay TIF costs that will be repaid with tax increments. M.S. 469.179, subd. 7. These loans must be authorized by TAX INCREMENT FINANCING 13.01 - 36 REVISION DATE: NOVEMBER, 2010