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Attachment A Tax Increment Financing Frequently Asked Questions From the Minnesota Office of the State Auditor Copied from the following website: http://www.osa.state.m n.us/defa ult.aspx?page=faq#TaxincrementFinancingFAQs As of June 22, 2017 What Is Tax increment Financing? Tax Increment financing (TIF) is a statutory financing tool to promote economic development, redevelopment, and housing development in areas where it would not otherwise occur. A TIF authority, which could be a city, an entity created by a city, or an entity created by a county, "captures" the revenues generated by the increase in net tax capacity resulting from new development within a designated geographic area called a TIF district. The TIF authority uses the tax increments to finance public improvements and other qualifying costs related to the new development that generated the increase in net tax capacity. For more information, see our Training Opportunities page to find links to short educational videos on TIF, including an introduction to TIF. Additional information may be obtained from the following links (you will be directed to an external website): http://www. house.leg.state.mn.us/hrd/issinfo/tifmain.aspx?src=21 http://www.revenue.state.mn.us/local aov/prop tax admin/at manual/13 01.pdf (pdf. 422k) Who is Authorized to Exercise TIF Powers? The TIF Act authorizes development authorities within municipalities to create TIF districts. TIF authorities include, for example, cities using the municipal development districts law, housing and redevelopment authorities, port authorities, economic development authorities, and rural development financing authorities. Counties can establish housing and redevelopment authorities and economic development authorities. For more information, see our Training Opportunities page to find links to short educational videos on TIF. Click here to go to the House of Representatives House Research website for additional information. How is a TIF District Created? The TIF authority takes the first step in creating a TIF district by adopting a TIF plan for the district. The TIF plan provides information about the project to be funded with tax increment from the TIF district and authorizes the use of tax increment from the district to pay TIF -eligible project costs. To create a new TIF district, the TIF authority must obtain approval of the TIF plan for the district from the governing body of the municipality in which the TIF district is located after the municipality has published a notice and held a public hearing. For example, if a city's port authority proposes to create a TIF district in the city, the city council must approve the TIF plan for the district. If a county's housing and redevelopment authority proposes to create a TIF district in a township in the county, the county board must approve the TIF plan. In many cases, the commissioners of the TIF authority include some or all of the council members. Before a TIF district is created, the TIF authority must provide a copy of the proposed TIF plan and certain information about the proposed TIF district to the county auditor and the clerk of the school board who, in turn, provide copies of these documents to the members of the county board of commissioners and the school board. The county board and school board may comment on the proposed district but cannot prevent the creation of the district. One instance where a county board may prevent creation of a TIF district is in those situations in which the county is the municipality that must approve the TIF plan. For more information, see our Training Opportunities page to find links to short educational videos on TIF. Additional information may be obtained from the following links (you will be directed to an external website): http://www. house.leg.state.mn.us/hrd/issinfo/tifmain.aspx?src=21 http://www.revenue.state.mn.us/local gov/prop tax admin/at manual/13 01.pdf (pdf, 422k)