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/ <br /> BRIGGS nND MORGAN <br /> Memorandum <br /> May 24, 1995 <br /> III Page 2 <br /> (f) The "clawback" provision,which would've required payback of the TIF <br /> assistance on a declining percentage scale for beneficiaries that bail out <br /> of their projects. <br /> There was significant progress made on the LGA/HACA front. There was a <br /> liberalized exemption for ethanol projects (now up to $1,500,000 of TIF) and <br /> for a new class of exempt projects for "agricultural processing facilities". In <br /> addition, and of more general usefulness, there is now an alternative to opt <br /> out of the general LGA/HACA penalty provisions by making a "qualifying <br /> local contribution"which would be 10% for economic development, housing, <br /> and renewal or renovation districts and 7.5% for redevelopment and other <br /> types of tax increment districts. There would be a cap on the total of these <br /> contributions at 2% of the city's net tax capacity, and the contribution must <br /> come from unrestricted moneys of the tax increment authority or the <br /> municipality (or the other local jurisdictions); the required contribution <br /> amount would be cut in half if certain state grants or incentives were involved. <br /> For many projects, this will prove quite useful. It is effective for tax increment <br /> areas requested for certification after June 30, 1994 (yes, 1994), except that <br /> for tax increment plans approved before July 1, 1995, the municipality must <br /> III "opt in" to this program by adopting a resolution to do so prior to the end of <br /> this year. This is the best news in years. <br /> 3. There was a proposal to change the anti-pooling rules from a 75/25% standard <br /> to a 90/10% standard. The final Bill changed this to an 80/20% standard, a <br /> minor change. <br /> 4. While the elaborate cost/benefit analysis was stricken from the required <br /> findings, there was retained the concept of determining that the market value <br /> of the new project, after subtracting the present value of the maximum tax <br /> increment, would exceed the market value that would otherwise appear if the <br /> tax increment weren't given. <br /> 5. There were adopted significant and lengthy new provisions regarding <br /> disclosure, reporting and enforcement. <br /> 6. Effective June 30, 1995, soils conditions districts are restricted basically to <br /> hazardous substance, polluted, or contaminated sites; there were also a <br /> number of "remedial" provisions regarding hazardous substance subdistricts. <br /> 7. The 5,000 square foot one-time exception for commercial facilities in smaller <br /> IPcommunities for economic development districts was deleted and there was <br />