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What governmental Minnesota authorizes development authorities to use TIF. These authorities are units can use TIF? primarily housing and redevelopment authorities (HRAs), economic There were over 2,000 active TIF districts in 2005 District type development authorities (EDAs), port authorities, and cities. In addition, the Maximum duration "municipality" (usually the city) in which the district is located must approve the Redevelop blighted areas TIF plan and some key TIF decisions. TIF uses the property taxes imposed by Renewal and renovation all types of local governments. But the school district and county, the two other 15 years ma j or entities imposing property taxes, are generally limited to providing Encourage manufacturing and other footloose industries comments to the development authority and city on proposed uses of TIF. The Housing state -imposed tax on commercial -industrial and seasonal -recreational properties 25 years is not captured by TIF. What is the but -for Before an authority may create a TIF district, it and the city must make "but -for" test? findings that (1) the development would not occur without TIF assistance and (2) that the market value of the TIF development will be higher (after subtracting the value of the TIF assistance) than what would occur on the site, if TIF were not used. What types of TIF Minnesota allows several different types of TIF districts. The legal restrictions districts may be on how long increments may be collected, the sites that qualify, and the created? purposes for which increments may be used vary with the type of district. There were over 2,000 active TIF districts in 2005 District type Use of Increment Maximum duration Redevelopment Redevelop blighted areas 25 years Renewal and renovation Redevelop areas with obsolete uses, not meeting blight test 15 years Economic development Encourage manufacturing and other footloose industries 8 years Housing Assist low and moderate income housin 25 years Soils Clean up contaminated sites 20 years According to the 2006 report of the Office of State Auditor, there were 2,204 active TIF districts in 2005. The graph shows the relative shares by type of district. Redevelopment (992) TIF Districts by Type in 2005 (2,204 districts) Housing Renewal (24) Special Laws (6) Soils (30) Pre -1979 (61) Economic Development (580) Source: 2006 Report of the State Auditor For more information: Contact legislative analyst Joel Michael at 651-296-5057. Also see the House Research web site for more information on TIF at www.house.inil/hrd/issinfo/tifinain.htm. The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative, legal, and information services to the entire House. House Research Department 1 600 State Office Building I St. Paul, MN 55155 1651-296-6753 1 www.house.mn/hrd/hrd.htm