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I I I January 11, 1984 I. THE CONCEPT The theory ~f!.te~; increment financing is that the increase in real estate taxes paid by a facilit~!:whj~h is constructed because of public inducements (such as land write-dowrY) iwilll be used to pay for the public inducements. n. "PROJ]~(DT? AND "DISTRICTS" A. MUnicipalities, housing and redevelopment authorities, port authorities and eod~nties all bare the statutory authority to create districts and utilize ~t/ax increment financing within them. B. After August 1, 1979, each newly created tax increment district is governed by two sets of statutes: I I I I i I I I I I I IU. The statute which controls the establishment of the project area and aut, horizes specific types of public activities within it, e.g. the Mgnicipal Development District Act, The Housing and Redevelop- ment Act, the Port Authorities Act, etc. 2. Th~: Minnesota Tax Increment Financing Act, Minnesota Statutes, SeCtiOns 273.73 to 273.78, which controls the financing mechanism to beI used to carry out those public activities. C. Therefpre, all tax increment financing necessarily involves the creation or- ai ~roj~.ct area under one statute, an'd the overlaying of a tax increment distrie.t on all or part of the project area under another statute. D. PrOjects for which the tax increment certification was requested pursuant to law, prior to August 1, 1979,. are governed by prior law except as Speciftcaliy covered by the Minnesota Tax Increment Financing Act, as provided in Section 273.78.. THE MECI~A NICS A. 'Eaeh ~3anuary 2nd the Assessed Market Value of real *property' is deter- mined. B. ThroUgh a statutory tax classification system, each type of real property 1s~ assigned an Assessed Yalue equal to an established percentage of .Aisse~ed Market Ya]ue. C. When a tax increment district is created, the Assessed Value is said to be "frozen."