2021.07.27 WS Packet v.2 - Laserfiche WebLink

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3. Fundamentals of Tax Increment Financing (TIF) V Pre-90 Districts Pre-90 districts have considerable flexibility regarding the use of tax increment. These districts are generally not subject to the pooling percentage limitations and the timing rules that were implemented in later years for Tax Increment Financing Districts. The City's pre-90 districts have been decertified. Post-90 Districts Post-90 districts are subject to the pooling percentage limitations for individual districts and the timing rules as further described. Pooling Percentage Limitations For redevelopment districts, at least 75% of the tax increments from a TIF District must be expended on activities within the district or to pay for bonds used to finance the estimated public costs of the TIF District. No more than 25% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of the Project Area. All administrative expenses are considered to have been spent outside of the TIF District. Pooled tax increment from a housing district may be used to fund other eligible housing-related costs outside of the geographic boundaries of the TIF District and within the Project Area without pooling percentage or timing limitations. However, the use of pooled tax increment from the housing district is limited to qualifying affordable housing projects. In order to exercise the pooling opportunities described above, the TIF Plan for the TIF District(s) must provide authority regarding the use of tax increment funds. In addition, for Redevelopment Districts, the pooling activities must occur within the Project Area. When considering future potential pooling activities, the City should verify that the activities are within the TIF Districts and/or Project Areas. In addition, based on the restrictions outlined above, it should be verified that the anticipated expenditure is within the pooling percentage limitations as described. The summaries for each individual district will outline the estimated pooling opportunities for each district. Three Year Rule: Minnesota Statutes section 469.176 sub 1 a was repealed in 2005. However, the requirement is still effective for districts that were established when the rule was in effect. The three-year rule states that, within three years from certification date, bonds must be issued; the authority has acquired land or has caused public improvements to be constructed in the district. 6