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Summary of" Tax Increment Knaitlo" Bill March 27, 191W
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<br />department of tradc andl econ,olm,ic development,, indicates that most cities have nioi imposed -inconle linuts or
<br />guidefilines for, this housing., The one exccPition is, interest reduction programs, since state law imposes income
<br />firnits, on these pir,ogr=si.,
<br />In order to be sure that the value of these subsidies, primarily bencfit low, and moderate income familics, stoic
<br />0
<br />income limits, are L"mp�osed. For ease of adminlistral lion and to assure targeting to low income families, the federal
<br />tax exempt bonds, limits are adopted by reference. Cities, and bond counsel, are accustomed to Complying %vilh
<br />these 14nits for tax exernpit bond projects. The limits for rental, projects, are regarded as relatively strict.
<br />Appil " g them to TIF housing distriiias may encourage, use of tax exempt, bonds finianced housing in c I
<br />YIn onjunction
<br />with Ti F assistance.
<br />nfr-reff)) I W=I
<br />PRUEW LAW
<br />The tai LnncTcment law iposies, ffie follOWM9 duration, HmiLs on diiistricts (all time periods run from collection
<br />of thile first mcrernent, unless otherwise noted):
<br />Redevc1opment districts
<br />H I ousing distn"Cits,
<br />ve-,W- Housi,ig—interest. reduction, prograrns
<br />Dined underground space
<br />Hazardous substance sites
<br />Soils condition,
<br />Economic development
<br />Ir I
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<br />The bUI reduces, tb,e duriallon A11 i elopm,eint,, housing, mined" underground space, and hazardous
<br />substance, site districts from to 20 years. Hazardous, substance site distrii would still be allowicid to collect
<br />lei
<br />mcrement, for the period oTT`ufi`e7n"i-e�ary to, recover A ofremoval actions.
<br />I "i 5Wf 67� t�91OX"lly, P 1�
<br />Moist cities, establish, only districts witbi projected lives of 20 years or less. This, common practice reflects the
<br />reality �that if tax base, exp=ion, is a primary motivation for use of TIF, improvements %%ill depreciate
<br />substantially over a, 25 year periold and little tax base expansion, will occur when the district is finally de-certified.
<br />Furthermore., it, is difficult, to expect an expanded tax base to pay back, [fin 'a present value basis, the subsidies
<br />granted if the tax base only becomes available 25 years later.,
<br />MMM AF
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