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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 8/1/2023 Community Development and Redevelopment Chapter 14 | Page 17 The result of a TIF project is an increased tax base that will benefit all local taxing jurisdictions. Additionally, TIF districts usually spur economic development and redevelopment through creating jobs, removing blight, and providing more affordable housing. Minnesota House Research Department, How TIF Works: Basic Mechanics. In Minnesota, TIF is generally used to: • Redevelop areas occupied with substandard buildings. • Build housing for low-income and moderate-income families. • Clean up pollution. • Provide general economic development incentives. • Finance public infrastructure, such as streets, sewer, water, sidewalks, and similar improvements. (This is not an explicit purpose of TIF, but Minnesota cities frequently use it for this purpose). Minnesota House Research Department, Housing TIF Districts. Special rules apply to TIF districts designed to provide low-income housing. Minn. Stat. § 469.175, subds. 5, 6. A city using TIF must report annually to the state auditor as to the status of the TIF district or districts and publish the report in a newspaper of general circulation in the municipality. The state auditor has established a uniform system of accounting and financial reporting for TIF districts. The city must annually submit to the state auditor a financial report in compliance with these standards. Minn. Stat. § 469.1771, subds. 1, 2b. The state auditor may audit TIF districts. If the state auditor notifies a TIF authority of an alleged violation, a copy of the notice is also forwarded to the county attorney. If no corrective action is brought within one year, the county attorney must notify the state auditor, who then notifies the attorney general. If the attorney general finds a substantial violation, the attorney general will petition the state tax court to suspend the authority’s power to use TIF for a period of up to five years. Minn. Stat. § 469.177, subd. 8. Lake Superior Paper Indus. v. State, 624 N.W.2d 254 (Minn. 2001). Brookfield Trade Center, Inc. v. County of Ramsey, 609 N.W.2d 868 (Minn. 1998). The TIF agreement with the developer is a complex document. Assistance from a financial advisor and the city attorney is necessary to anticipate the many potential problems. An agreement can establish a minimum market value for tax increment assessment purposes, as well as provide that the developer pays a certain level of taxes regardless of any classification rate changes or levy decreases. The agreement should be entered into before the assembly and acquisition of the land on which the completed improvements are to be located.