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"bus Tax Bill April 20, 1997 Page 59 I I fl ! ,. • Governing body is the Minneapolis city council. Housing transition district or district is the special law TIF district authorized by the bill. This district may consist of: (1)parcels that contained public housing projects demolished or required to be demolished by the consent decree in the Holtman case and(2) additional acreage not to exceed an amount equal to 10% of the area of the parcels. Nontaxable parcel means a parcel in a housing transition district that is exempt from property tax because it was publicly owned. Original net tax capacity deviates from the general TIF law, The definition provides that nontaxable parcels (see the previous definition) have a net tax capacity of zero. Under general law, the original net tax capacity of a TIF district includes the value of these parcels as most recently assessed. The special rules in the bill will increase captured tax capacity and tax increment. Public housing projects are generally exempt from property taxes and, thus, many of the properties in the districts will come under these rules. Parcel is a property tax parcel as established before the housing transition district is established. Preexisting district means a TIF district that includes a parcel in a housing transition district The bill contemplates that the housing transition district will overlay existing TIF districts. 28 Authorization. Authorizes the Minneapolis to establish a special housing transition TIF district. This district need not be contiguous. Once the district is certified,no new parcels may be added. Under general law,the area of a TIF can be increased for up to 5 years after the initial certification. Tax increment for this district will be calculated somewhat differently than under general law. The most important differences are those outlined in the definitions section— tax exempt parcels will have a zero original tax capacity. In addition,some minor adjustments to original tax capacity will not be made. The net impact of these special rules will be to provide significantly more increment than under the general law. When an existing TIF district and the housing transition district under the bill overlap,the bill provides that(1) tax exempt parcels are allocated to the housing transition district and(2)for taxable parcels, all the increment is allocated to the pre-existing district. The bill is silent on what occurs when the preexisting district is decertified. The implication is that the parcels return to the regular tax rolls and do not generate increment for the housing transition district. The section establishes rules for aTIF plan that generally follow those under the general law • with some differences. • General law TIF procedures generally apply. The but-for test does not apply to the • district,but otherwise the procedures used generally follow TIF law. Reyr Department Minnesota House of Representatives 600 State Office Building 0Z • S3IlI0 NW d0 3f191:J31 WdE2:20 1.6, Z2 ddtl