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A development authority or a municipality may advance or loan money to a tax increment financing (TIF) district from its general fund or other authorized fund to finance expenditures. Loans and advances made after July 31, 2001, must be authorized by a resolution adopted by the entity having jurisdiction over the funds.

The terms and conditions for repayment, including the principal amount, the interest rate, and the maximum term of the loan must be in writing. Interfund loans must be reported in the TIF annual reporting form. The maximum interest rate allowed is the greater of the rates specified under Minnesota Statutes sections 270C.40 or 549.09, as of the date of the loan. For more information, including interest rates, see our statement of position at:

http://www.auditor.state.mn.us/other/statements/tifinterfundloans_0709_statement.pdf

Updated: 02/01/2019

Date this Avoiding Pitfall was most recently published: 02/01/2019

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