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City of Little Canada, MN Management Review & Analysis – Tax Increment Financing Districts 12 Special Pooling Provision for Tax-Credit Eligible Rental Housing Minnesota Statutes, Section 469.1763, subdivision 2(d), allows the City to pool up to an additional 10% above the standard allowable limit for rental housing that meets low-income housing tax credit requirements. Eligible uses include acquisition and site preparation, construction, rehabilitation and public improvements directly relate to the housing. This provision does not apply if all the eligible expenses are funded through tax credits. This pooling, pursuant to Minnesota Statutes, Section 469.176 subdivision 4k, can be done without regard to project area/development district limitations. The 10% calculation is retroactive to the beginning of the TIF District. TIF District 7-1 and 7-2 are the only districts that may reap a meaningful benefit by executing this provision. It is too early to determine whether the districts should be modified to allow for the extra 10% pooling for affordable housing, but this is an option worth monitoring. Excess Increment Excess increment, as defined by MN Statute 469.176 subd. 2, occurs when total tax increment revenue exceeds total costs authorized by the TIF plan. Excess increment must be used to either pay outstanding bonds or be placed into an escrow until such time as the bonds can be called. Any remaining excess increment must be returned to the county auditor for redistribution to the county, city and school district. There are currently no TIF districts generating any excess increment on the OSA’s Annual TIF Collection Forms as of the 2020 TIF reporting year. Four-Year Rule MN Statute 469.176 sub 6 requires that, within four years from certification date, certain activities must have taken place on each parcel with the TIF district. Required activities include demolition, rehabilitation, renovation and site improvements. If these activities have not taken place within the required time, the parcel is ‘knocked down’ from the district, meaning that no increment may be collected from that individual parcel for the duration of the district. The law does, however allow for reinstatement procedures should the required activity later occur on the parcel.