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Extension of the sunset of the state income tax credit for preservation of historic <br />properties. <br />III -1 Tax Increment Financing <br />Tax Increment Financing (TIF) has been and continues to be the primary tool available for <br />local communities to assist economic development, redevelopment and housing. Over time, <br />several statutory changes have made this critical tool increasingly difficult to use, while <br />recent property tax reform has resulted in a decreased state financial stake in city TIF <br />decisions. At the same time that TIF has become more restrictive and difficult to use, <br />federal and state development and redevelopment resources have been steadily shrinking. <br />The 2006 eminent domain changes will make redevelopment significantly more expensive <br />in some cases, and impossible in others. The cumulative impact of TIF restrictions, <br />shrinking federal and state redevelopment resources, and changes to eminent domain laws <br />will restrict a city's ability to address problem properties and will accelerate the decline of <br />developed cities in the Metropolitan Area. With huge state and federal budget deficits, the <br />only source of revenue available to accomplish the scope of redevelopment necessary is the <br />value created by the redevelopment itself, or the "increment." Without the use of the <br />increment developmentwiIl either not occurs or is unlikely to be optimal. <br />Metro Cities urges the Legislature to: <br />■ Extend the sunsets for the TIF provisions in the 2010 "Jobs" bill to fully realize the <br />construction potential as the economy moves toward recovery, and as the lending <br />market becomes more compatible with commencing construction projects; <br />■ Not adopt any statutory language that would further constrain or directly or indirectly <br />reduce the effectiveness of TIF; <br />■ Incorporate the Soils Correction District criteria into the Redevelopment District <br />criteria so that a Redevelopment District can be comprised of blighted and <br />contaminated parcels in addition to railroad property, <br />■ Expand the flexibility of TIF to support a broader range of redevelopment projects; <br />■ Increase the ability to pool increments from other districts to support projects; <br />■ Continue to monitor the impacts of tax reform on TIF districts and if warranted provide <br />cities with additional authority to pay for possible TIF shortfalls. <br />■ Allow for the creation of transit zones and transit related TIF districts to in order to <br />shape development around transit stations but not for construction or maintenance of <br />the public transit itself; <br />20 Metro Cities <br />