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Tax Increment Financing it1,.►7e,--:e:ota <br /> • Administrative costs10% of the tax .5 • <br /> up to �t1� rrcren?er_ <br /> • Financing fees and capitalized interest <br /> Taxable Versus Tax-Exempt • <br /> Tax-Exempt Status Must Satisfy Two Federally Imposed Testa <br /> A: "Use Test" -Are more than 10% of the expendittr=zi <br /> for a private purpose? <br /> • Types of expenditures for improvements available to <br /> every resident <br /> • Streets, sewer, water, etc., versus <br /> • Types of expenditures benefiting crivate parties, such <br /> as landowners/developers: <br /> + Land acquisition, soil corrections, site preparation, <br /> etc. • <br /> • B. "Security Interest Test" -Are more than 10% (in some <br /> cases 5%) of the payments of taxes and/or debt service <br /> guaranteed by the landowner/developer? <br /> • A contract or guarantee requiring the <br /> landowner/developer to make tax payments and/or fund <br /> debt service shortfalls. <br /> • Assessment agreements trigger the security interest <br /> test. <br /> • <br /> Page 8-4 r SPRINGSTED <br />