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CHAPTER 16 • For more information contact If a city decides to investigate the use of industrial bond financing, it should DEED at 500 Metro Square contact the Department of Employment aneve d Economic Development. The Building,121 East Seventh Place, pp St.Paul,MN 55101-2146(65 1) department provides the city with information, advice,and technical 297-1291 or(800)657-3858. assistance. This assistance is important, due to the adoption of federal and state laws allocating issuance authority among the states and their political subdivisions. The commissioner of Securities must approve the project. D. Commercial rehabilitation Minn.Star.§469.184. Cities have authority to carry out programs for the rehabilitation of small- and medium-sized commercial buildings. The city must adopt a program ordinance,that provides for the adoption of program regulations, including a definition of small- and medium-sized commercial buildings. Loans under the program may be for amounts up to$200,000.The city may finance the program through the sale of revenue bonds. E. Tax increment financing (TIF) Minn.Stat.§§469.174 to Tax increment financing authority is available to most cities. Cities with 469.1799. housing and redevelopment authorities, economic development authorities, port authorities, redevelopment agencies,those cities administering • development districts or development projects, or cities exercising port authority powers under a general or special law may use tax increment financing. Certain recent amendments,however, may make the use of this development tool impractical. Tax increment financing is a funding technique that takes advantage of the increases in tax capacity and property taxes from development or redevelopment to pay public development or redevelopment costs. The difference in the tax capacity and the tax revenues the property generates after new construction has occurred, compared with the tax capacity and tax revenues it generated before the construction, is the captured value. The taxes paid on the captured value are called"increments."Unlike property taxes, increments are not used to pay for the general costs of cities, counties, and schools. Instead, increments go to the development authority and are used to repay public indebtedness or current costs the city incurred in acquiring the property,removing existing structures or installing public services. 16-16 HANDBOOK FOR MINNESOTA CrnFs This chapter last revised 12/15/2004