Laserfiche WebLink
<br />What are qualified To be a qualified disaster area, an area must meet three tests: <br />disaster areas? <br /> <br />What are permitted <br />uses of increments <br />for redevelopment <br />districts? <br /> <br />. 70 percent of the parcels must be occupied by buildings, streets, utilities, <br />or other improvements <br />. The area was a declared a disaster under federal or state law within 18 <br />months before creation of the district <br />. 50 percent or more ofthe buildings suffered substantial damage as a <br />result of the disaster <br /> <br />For a qualified disaster area district, the original net tax capacity (i.e., the base <br />value used to calculate increments) is the land value. The most recent <br />assessment will generally include the full value of the buildings (i.e., it would <br />not reflect the damage caused by the disaster). Absent a "write-down" ofthe <br />original value to the land value, reconstruction following a disaster would not <br />generate much or any increment, since it would largely restore the pre-existing <br />value. <br /> <br />The law requires 90 percent ofthe increments from a redevelopment district to <br />be spent for blight correction-i.e., to fix the conditions that allowed designation <br />of the district. The statute lists the following as qualifying expenditures: <br /> <br />. Site acquisition of blighted sites or sites requiring pollution clean-up <br />. Acquisition of an adjacent parcel or parcels to assemble a site large <br />enough to redevelop <br />. Clean-up of hazardous substances, pollution, or contaminants <br />. Site preparation, such as clearing the land and installation of utilities, <br />roads, sidewalks <br />. Providing parking facilities for the site <br /> <br />The law explicitly provides that this is not an exhaustive list. Administrative <br />expenses of the authority that are allocated to these activities also meet the 90 <br />percent test. <br /> <br />For more information: Contact legislative analyst Joel Michael at 651-296-5057. Also see the House <br />Research short subject Tax Increment Financing, January 2008. <br /> <br />The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative, <br />legal, and information services to the entire House. <br /> <br />House Research Department I 600 State Office Building I st. Paul, MN 55155 I 651-296-6753 I www.house.mn/hrd/hrd.htm <br />