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ELF. 2420 May 17, 1999 Version: Conference Committee Report Page 40 Section 4 Pre-1982 TIF District Pooling Rules. Sets out "pooling rules" (i.e., the authority to spend increments from a district on activities outside of the geographic area of the district) for districts established after July 31, 1979 and before July 1, 1982. Applies only to TIF districts where the request for certification was made after July 31, 1979 and before July 1, 1982. Background information. The 1979 TIF Act explicitly required increment to be spent in accordance with a TIF plan for the improvement and development of the district. This limited spending to development or redevelopment of the district. Pooling or spending of increments for development or redevelopment of other areas (i.e., outside the district) was not explicitly authorized. The 1982 legislature allowed unlimited pooling of increments, but these changes were effective only for districts for which the request for certification was made after June 30, 1982. Thus, these pre-1982 districts have no specific statutory authority to spend increments on developments outside of the district. In 1990, the legislature imposed percentage limits on the amount of increments that could be spent outside of the district. These limits apply to newly certified districts and areas of existing districts. Exemptions. Increments are not subject to this section, if they were used for debt service pooling by municipal development districts. (This was a limited pooling authority available between 1984 and 1990.) Also, the section does not ratify past pooling violations, if the city voluntarily repaid the increments and decertified the district before legislation was enacted. Notification by state auditor. The bill requires the State Auditor to notify each development authority (e.g., a economic development authority or housing and redevelopment authority) of the provisions of this law. Ratification of past spending. The bill provides that expenditures on activities outside of the TIF district are legal if they meet either of two requirements: ► The expenditures were made before the city or authority was notified by the State Auditor that spending for the district was not in compliance with the law or December 31, 1999, whichever occurs first. This notification by the Auditor does not refer to notice required by this section, but rather would have been part of a compliance audit by the Auditor or similar circumstances that resulted from a review of the district's activities. ► The expenditures were made to pay"pre-existing outside district obligations." These are obligations that are secured by increments from the district. To qualify • bonds must have been issued before the earlier of(1) final notice of noncompliance from the Auditor or (2) April 1, 1999. To qualify contracts must have been entered before the earlier of(1) the notice from the Auditor or (2) May 1, 1999. Article 10: Tax Increment Financing