EDSR INFORMATION 08-11-1997 - Laserfiche WebLink

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BRIGGS AND MORGAN • on-siteroPertY tax appraisals or housing inspections, exterior evidence of P PP deterioration, or"other similar reliable"evidence. Written documentation of all these findings and the reasons why the inspection could not be conducted must be made available at the time of TIF decision-making and retained for the life of the district. In a similar change, the law now specifies that the reasons and supporting facts must be documented as to why a district qualifies as a redevelopment or a renewal and renovation district. That seemed already required. These changes are effective for tax increment areas requested for certification after June 30, 1997. G. Longer Duration Limit For Soils Condition Districts. New soils condition districts are under current law restricted essentially to polluted or contaminated sites. Heretofore, the duration limit was 12 years from date of approval of the tax increment plan,which in practical terms usually meant no more than 10 years of tax increment. The change is that the duration may extend until 20 years after receipt by the authority of the first increment. This, in practical terms, means a maximum of 21 years of increment. In a related note, the State Auditor has recently advised the County Auditors about duration limits applicable to redevelopment districts and to economic development districts, respectively. The duration limit for redevelopment districts is 25 years from the receipt of the first increment. This has been interpreted by the Auditor to effectively allow 26 years of increment because the annual receipt of increment is deemed to be a unitary event, notwithstanding first • and second half tax settlements. Therefore, if 1997 is the first increment year, 2022 is the last increment year, thus yielding 26 years of increment. It is on that same theory that a new soils district could generate up to 21 years of increment. For economic development districts, however,the duration limit is 11 years from date of TIF approval or 9 years from date of receipt of first increment, whichever is less. It has been a fairly common practice, particularly where one establishes a tax increment district in the first six months of a year (and thus uses the previous year's market value for determining the base value of district), to waive any increment that might be generated in the following year simply due to a small increase in the property value of the district. It was still possible to stay within the 11 year limit and retain 9 "full" years of increment, that is, the increment generated by the new development. The State Auditor, however, has decided that since there is no express authority in the Tax Increment Act to waive that potential and incidental first year of increment, it can't be done. Whatever technical merit this view may have, waiving the first year of partial increment was practical and sensible. This should not be a problem when one is setting up a tax increment district in the second half of the year because one then uses the market value as of January 2 of that same year for base purposes, so there is generally no opportunity for a marginal tax increment to be generated in the following year. As you are probably well aware by now, there were significant reductions in the class IP rates which apply to various classes of property for payable 1998 and subsequent taxes. One of the more significant changes occurred in the commercial/industrial area. Heretofore the 357509.1 4