6.1 - Laserfiche WebLink

Home Browse Search

III AA. REDUCTION IN STATE TAX INCREMENT FINANCING AID Pursuant to Minnesota Statues, Section 273.1399, for tax increment financing districts for which certification was requested after April 30, 1990, a municipality incurs a reduction in state tax increment financing aid (RISTIFA) applied to the municipality's Local Government Aids (LGA) first and, Homestead and Agricultural Credit Aids (I-IACA) second, in an amount equal to a formula based upon the equalized qualifying captured tax capacity(QCTC)of the tax increment financing district. Pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6, for tax increment financing districts certified after June 30, 1994,the City may choose an option to the LGA-HACA penalty. A tax increment financing district is exempt if the City elects at the time of approving the tax increment financing plan to make a qualifying local contribution. To qualify for the exemption in each year, the City must make a qualifying local contribution to the project of a certain percentage. The local contribution for a redevelopment district is 5 percent. The maximum local contribution for all districts in the City is limited to two percent of the City's net tax capacity. The amount of the local contribution must be made out of unrestricted money of the authority or municipality, such as the general fund, a property tax levy, or a federal or a state grand-in-aid which may be spent for general government purposes. The local contribution may not be made, directly or indirectly, with tax increments or developer payments. The local contribution must be used to pay project costs and cannot be used for general government purposes. The Authority elects to make the annual local contribution to the project to exempt itself from the LGA- 11110 HACA penalty. The annual local contribution has been made up-front and includes the cost of holding the property u►.til acquisition by the developer in July, 1997, plus costs paid up front which are not reimbursable TIF expenditures. LOCAL MATCH ANALYSIS Fair Market Value-established at time of purchase-June 28, 1996 $410,000 Amount to be carried for 1 (one)year until developer acquisition $410,000 Carrying costs at rate of 6% $ 24,600 Add other non-reimbursable costs-property taxes $ 6,261 Total local match provided up-front to project $ 30,861 AB. ECONOMIC DEVELOPMENT AND JOB CREATION To the extent applicable, the City agrees to comply with Minnesota Statues, Section 116J.991, which states that a business receiving state or local government assistance for economic development or job growth purposes, including tax increment financing, must create a net increase in jobs and meet wage level goals in Minnesota within two years of receiving assistance (See Appendix D). •