3.0. HRSR 02-05-2001 - Laserfiche WebLink

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LGA/HACA Exemptions. 41, Qualified housing districts,which meet certain income and rent limits,are exempt from the LGA/HACA penalty altogether. Local match option:A TIF district is exempt from the LGA/HACA penalty if the municipality elects at the time of approval of the tax increment financing plan to make a"qualifying local contribution"each year, equal to the following percentages of increment from the district: ❑ 10 percent, for an economic development or renewal and renovation district; ❑ 5 percent, for a redevelopment,housing, hazardous substance subdistrict, or soils condition district. If the municipality elects the local match option but fails to make a contribution in any year,there will be a state aid reduction equal to the greater of(1) the required local contribution or(2) the LGA/HACA penalty reduction that otherwise applies under the statute. • If, in any year, the combined local contributions for that year from districts in the municipality reaches two percent of the city net tax capacity(excluding the captured tax capacity in any TIF district),then only a minimum additional contribution is required in that year. In addition to the overall two percent of tax capacity (which may be allocated among the municipality's TIF districts at its discretion),the municipality must contribute .25 percent of the city's net tax capacity or three percent of the tax increment revenues from the districts in question,whichever is less. If those contributions are made, no LGA/HACA penalty will apply that year for any TIF districts subject to the local match option. The local contribution must be made out of unrestricted money of the authority or municipality(including any unrestricted agrant), and cannot include tax increments or developer payments. The contribution must be used to pay project costs and not improvements that the authority or city planned to incur absent the project. Cities, counties, towns and schools are authorized to contribute towards this local match. If the project received a direct state grant or similar state incentive, the required local contribution is reduced by one-half of the dollar amount of the grant or incentive. The contribution may be made in the first year or so, and that amount will be carried forward to offset the contribution required in later years. However,no interest will be imputed on such an up-front contribution. Other exemptions. Certain ethanol production facilities and agricultural processing facilities outside the seven-county metro area are exempt from the LGA/HACA penalty. Ehlers&Associates-TIF Basics 10