CCP 11-24-1997 - Laserfiche WebLink

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I 1'3/'7 .. TIF Talk 1 3 I ~ Bonds include subsequent refunding bonds if one of two tests is met: (1) the proceeds of the original refunded bonds were spent on activities within five years after the tax increment I financing district was certified or (2) the original refunded bonds are issued within five years after the tax increment financing district was certified and the proceeds are expended on activities within a reasonable temporary period. I "Knock-down": Also known as "drop out" provisions, these are statutory requirements that parcels within a tax increment financing district be improved within specified periods or they I "drop out" of the tax increment financing district. Also included is a summary of the "three year activity rule" which is a "knock-down" provision affecting the entire tax increment financing district: I . The "three vear activity rule": This requires that within three years (1) bonds must have been issued in aid of the project area containing the tax increment financing district, or (2) I the authority has acquired property within the tax increment financing district, or (3) the authority has constructed or caused to be constructed public improvements within the tax increment financing district. I . The "four vear activity rule": Within four years from the date of certification of the tax increment financing district, demolition, rehabilitation, or renovation of the property, or Ie other site preparation, including qualified improvement of a street adjacent to a parcel (with some exceptions), must have commenced on a parcel, or it will "drop out" If activity on the parcel subsequently commences, it can again be included, but at the net tax I capacity most recently certified by the Commissioner of Revenue. . Parcels imoroved orior to certification. The authority may request inclusion in a tax I increment financing district and the county auditor may certify the original tax capacity of a parcel of a part of a parcel for taxes payable in any of the five calendar years before the filing of the request for certification only for (1) a tax increment financing district in which 85% or more of the planned buildings and facilities are for manufacturing or production of I tangible personal property, including processing resulting in the change in the condition of the property; or (2) a qualified housing district. I It is used to prohibit the mere collection of increments generated from inflation. LGA/HACA Ejection: In 1990, the legislature initiated the LGNHACA reduction which I penalized authorities for providing tax increment financing assistance. In 1995, the legislature provided an alternative to this penalty. An authority may now elect to make a qualifying contribution to a project. The contribution may not include tax increments or I developer payments and must be used to pay project costs, not for general government purposes or for costs a city would have incurred without the project. A city may receive assistance for its local contribution from other affected units of government. For example, if I the state contributes to a project, the local contribution may be reduced by one-half of the dollar amount of the state contribution. A limitation in the use of this exception is that the .. maximum city contribution for all tax increment financing districts cannot exceed 2% of the city's net tax capacity. I November 19, 1997