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BRIGGS A...'lD l\-IORGAN 5. TIF Districts. Taxes on a TIF district can't be abated. A close question, however, is whether an abatement agreement could take effect following the expiration of the TIF district. 6. Bondin[!. Bonds may be issued to provide an amount equal to the sum of the abatements granted. The maximum amount of the bonds can't exceed the total of the expected abatements. \Vhile the bonds may be general obligations of the jurisdiction, since their issuance is governed by Minnesota Statutes, Chapter 475, the State Bond Code, those general obligation bonds can generally not be issued without voter referendum. Abatement bonds do not count against the jurisdiction's net debt limit. If bonds are issued the right to review and modify an abatement every two years does not apply but annual school district reauthorization is still required, and may be denied. Two or more of the jurisdictions that have granted abatements for the same property could join together so that one of them issues bonds and the others make a pledge of their respective abatement amounts to the payment of those bonds. 7. Eligible Costs. Unlike direct use of abatement, \vhere there is no particular requirement as to reimbursement of "eligible" or other identified costs, if bonds are issued, their proceeds may be used for public improvements that benefit the property, to acquire and convey land or other property, to reimburse the owner for the cost of improvements made to the property, or to pay the costs of issuing the bonds. 8. Limit on Abatements. Each jurisdiction has an annual limit on the total of all of its abated taxes. The limit is 5% of the jurisdiction's current levy or $100,000, whichever is greater. 9. Compensating Levy: Levy Limits. For each abatement granted, the jurisdiction is required to add to its levy amount for the current year the total estimated amount of all abatements. These additional levies would generally be subject to applicable levy limits, except for "special levies" made for bonded indebtedness, which the Department of Revenue has interpreted to mean primarily general obligation bonding. See the attached letters of Richard Gardner of the Department of Revenue. In simple terms, the abatement comes out of the remainder of the jurisdiction's tax base. 369177.1 5