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I I I I I I I I I I I I cormtn~tion of haisirg, office, retail ard ccmnercial ~pace, lar~_ -c-ping, public impr~ta, and parking. Besides ~ redeve~_nt, TIE districts have been used for redevelopir~ irdustrial areas and c~ercial areas in neightx~hoods, ar~ for developing essentially raw vacant land zoned for industry. In re-_ny of the TIF districts designated as ecc~omic development districts, soil c~rrections, higlm~ay, sewer ar~ other public improvements are financed with the tax increment. Refinar~ir~ tax increment units. As cities see the tax increment revenues far exceeding the amount needed to repay the tax increment bcrzls, some are planning to restructur~ their TIF indebtedness. Goon Rapids instituted a master project cxx~ept in whict% it expanded the project area to ~ss virtually any l~rt of the city. In this wy '.exDess'. revenues from TIF districts can be used anywl~_re in the city and not just in the TIE district. Minr~apolis is pooling the debt servioe of t~e separate tax increment districts so that fumts raised in one district can be spent in another. It would return all property in TIF districts to the tax rolls by 2003 ~ generate about $427 million in additional revenu~ be~ the am, nt needed to pay off the Of the $427 million about one quarter wculd be distributed in cash payments to }tennepin Gounty, the Mirneapolis Public Schools and the Minneapolis City Ouuncil. Thus about $100 million in at, ual l~ayments would be shared by the county, schools, ar~ city in proportion to their mill rates; 32 percent of the total would go to tt~ city, 43 percent to th~ schools and 25 percent to the T~F tax deferral.--Cities may defer the property taxes of developers involved with residential, cx~m~_rcial or industrial im~ in any develops=_ _nt district for the duration of the oonstruction period. After cormtruction, the amount of 'tax due is cc~p~ted by t%~ amount of tax due the year in which the developer applied for tt~ deferral, multiplied by the nm~er of years the property was exempt. This formula oor,-~titutes tax abatement, l%~we~, the city may opt to d%arge the amount of taxes that would have been due and payable each year during the deferral, which oonstitutes pure tax deferral. I ~.--The 1985 Minnesota Legislature modified TIF in two ways. This legislation requires the state auditor to develop a system of accounting and finar~ial reportin9 on all TIF districts, to ensure full disclosure of the sources and uses of public fur~ls in the districts. ~h~ secor~ charge limits the use c~f tax increment for interest rate reduction programs. No tax increment can be collected after 12 years from the date of the first interest reductica% pa _y_ment. No tax increment can be used for interest rate reduction if lxaxis were issued for the same project. Up to 50 peroent of of the tax increment may be used to finance an interest reduction program for owner-cx~upied, sir~31e-family dwellings. Assistance Initiated b~ the Federal Government A) O~,,..onit~ Develol~ment Block Grant ((IIBG) What it is.--fllBGs are a form of federal assistance to cities for housing, urban renewal ~ public improvements that: 1) primarily benefit low and moderate inccme persons, 2) prevent blight, and 3) deal with urgent