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• <br /> Housing TIF Districts <br /> December 6, 2000 <br /> Page 4 <br /> Statutory Limitations <br /> The use of TIE is subject to a wide range of statutory limitations. Some of the limitations on TIF <br /> specifically related to housing districts include the following. <br /> • Use of Increment: Tax increments from a qualified housing district can only be spent on costs <br /> which are directly related to low and moderate income housing. In other words,tax increments <br /> produced from this facility could not be used to assist a commercial building. The statutes <br /> specifically limit the use of increments cost of housing projects as defined in M.S.469.174, <br /> subdivision 11. The cost of public improvements directly related to the housing projects and the <br /> allocated administrative expenses of the authority may be included in the cost of a housing <br /> project. <br /> • Duration: All four districts have maximum durations of 25 years from receipt of first increment. <br /> • Penalties: A qualified housing district is the only type of district which does not carry a local <br /> government aid/HACA penalty for the sponsoring City without the City using the option of <br /> providing a local match to the project. <br /> Project Justification <br /> All tax increment financing projects require careful consideration of the justification for city financial <br /> assistance. The key elements of project justification include: <br /> • Would the proposed project occur"but for" the use of tax increment financing? <br /> • How much financial assistance is needed? <br /> • What are the nature and amount of project costs eligible for TIF? <br /> • What are the terms and conditions of the assistance? <br />