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HOW INCREMENT MAY BE USED <br /> <br />Eligible Uses. <br /> <br />In addition to the specific limitations for each type of TIF District, tax increment may be spent only for specified purposes <br />permitted in the underlying development statutes. Such purposes generally include: <br /> <br />land acquisition; <br />site improvements; <br />public and on-site utilities; <br />demolition; <br />relocation; and, <br />administration. <br /> <br />If the authority owns a Project, increment may be used to finance essentially any aspect of the Project. Because the <br />development statutes are often ambiguous, whether a particular activity is TIF-eligible may depend on the facts in each case. <br /> <br />Administrative Expense. <br /> <br />Administrative expenditures are limited to 10% of the expenditures authorized in the TIF Plan, or 10% of actual increment <br />expenditures, whichever is less. They are defined to mean all expenditures of the authority other than land acquisition and <br />relocation costs and costs "directly connected with the physical development of the real property in the district." <br /> <br />The County auditor may assess each TIF district for the county's costs of administrating the district, and the fee may be paid <br />from tax increment. <br /> <br />General Government Use. <br /> <br />Increment may not be used to finance buildings that are used "primarily and regularly for conducting the business" of any <br />unit of government, except for parking structures, a commons area used as a public park, or a facility used for social, <br />recreational or conference purposes. <br /> <br />Ifa TIF-financed social, recreational or conference facility is operated by an entity other than the authority, the authority's <br />governing body must approve operating policies for the facility. This would apply, for example, when an HRA finances a <br />city community center. <br /> <br />Guaranty Fund. <br /> <br />An authority may establish a guaranty fund to indemnity a person for liability for remediation costs under state or federal <br />environmental law. The maximum term of the indemnity is 25 years, and the maximum amount is one-half of the remediation <br />costs. The authority may deposit tax increments in the fund, and the municipality may also appropriate money for deposit <br />in the fund. <br /> <br />Ehlers & Associates - TIF Basics <br /> <br /> <br />