Laserfiche WebLink
TAX INCREMENT FINANCING BASICS <br /> I. PROJECTS AND DISTRICTS <br /> A. Projects. Tax increment financing is used in conjunction with underlying development and <br /> redevelopment powers. Tax increments must be spent within particular geographic areas created <br /> under the development statutes. The basic planning area is referred to as a "Project," which also <br /> has other names: <br /> City: Development District, created under Sections 469.124 to 469.134. <br /> 1-IRA: Redevelopment Project, created under Section 469.001 to 469.147. <br /> EDA: Economic Development District, created under Section 469.090 to 469.1081, or <br /> Development District or Redevelopment Project created using City or 1-IRA powers. <br /> All Projects require a general development or redevelopment plan, approved after a public hearing. <br /> The boundaries tend to be large areas within which the authority intends to promote development <br /> or redevelopment. <br /> B. TIF Districts. TIF District are the specific parcels within a Project area from which tax increment <br /> will be captured. There are five general types: <br /> 11111 1. Redevelopment District, Section 469.174, Subd. 10 <br /> Qualifications: <br /> (a) Parcels that make up 70% of the district are improved, and more than 50% of the <br /> buildings (excluding outbuildings) are structurally substandard to a degree <br /> requiring substantial renovation or clearance. To be considered "improved," at <br /> least 15% of the parcel's area must contain improvements. A building is not <br /> substandard if it complies with building codes or could be brought up to code at <br /> a cost of less than 15% of the cost of a comparable new building on that parcel. <br /> (b) the district consists of vacant, unused, underused, inappropriately used, or <br /> infrequently used rail yards, rail storage facilities or excessive or vacated railroad <br /> rights-of-way. <br /> Term, restrictions: May collect increment for 25 years after the date of receipt of the <br /> first increment. 1993 Change: may designate commencement in the year when the <br /> market value reaches an agreed-upon minimum (no more than four years after date of <br /> certification), in which case the district duration is 20 years after such commencement <br /> year. <br /> At least 90% of the increment must be used to finance the cost of correcting conditions <br /> that allow designation of redevelopment districts. <br /> SJB64549 <br /> FIRM-2 <br />