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CHAPTER 15 For more information, contact If a city decides to investigate the use of industrial bond financing, it should DEED 651.259.7114, 438.5627. 3858 or 888 6s7 800 contact the De artment of Em to ment and Economic Development. The p p y . . . Main Office: 1 st National Bank department provides the city with information, advice, and technical Building 332 Minnesota Street, assistance. This assistance is important, due to the adoption of federal. and Suite E200 Saint Paul, MN sslol-13s1. state laws allocating issuance authority among the states and their political subdivisions. The commissioner of Securities must approve the project. D. Commercial rehabilitation Minn. star. § a69.tsa. Cities have authority to carry out programs for the rehabilitation of small- and medium-sized commercial buildings. The city must adopt a program ordinance that provides for the adoption of program regulations, including a definition of small- and medium-sized commercial buildings. Loans under the program may be for amounts up to $200,000. The city may finance the program through the sale of revenue bonds. E. Tax increment financing (TIF) Minn. Star. §§ 469.174 to Tax increment financing authority is available to most cities. Cities with 469.1799. housing and redevelopment authorities, economic development authorities, port authorities, redevelopment agencies, those cities administering development districts or development projects, or cities exercising port authority powers under a general or special law may use tax increment financing. Amendments to the law, however, may make the use of this development tool more complicated. Tax increment financing is a funding technique that takes advantage of the increases in tax capacity and property taxes from development or redevelopment to pay upfront public development or redevelopment costs. The difference in the tax capacity and the tax revenues the property generates a8er new construction has occurred, compared with the tax capacity and tax revenues it generated before the construction, is the captured value. The taxes paid on the captured value are called "increments." Unlike property taxes, increments are not used to pay for the general costs of cities, counties, and schools. Instead, increments go to the development authority and are used to repay public indebtedness or current costs the city incurred in acquiring the property, removing existing structures or installing public services. Thus, the property owner in a TIF district continues to pay the full amount of property taxes. TIF involves only the increased property taxes generated within the district. It does not change the amount of property taxes currently derived from the redevelopment area, nor does it directly affect the amount or rate of general ad valorem taxes the city levies. The result of a TIF project is an increased tax base that will benefit all local taxing jurisdictions. Additionally, TIF districts usually spur economic development and redevelopment through creating job, removing blight, and providing more affordable housing. 15:14 LEAGUE OF MINNESOTA CTTIES This chapter last revised 12/1/2011