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Transportation Funding & Financing

Tax Increment Financing

Tax Increment Financing (TIF) allows cities or counties to create special districts generating extra tax revenue and to use that new income to and to make public improvements.

The legislative process for implementing and utilizing TIF financing is a complicated process involving the creation of the special district and the public agency that will administer it. The following steps are involved:

  1. Prepare a finding of necessity and establish the boundaries of the district. This finding is normally a very detailed study that demonstrates that the district meets the criteria contained in the state's enabling legislation.

  2. A redevelopment agency is created by resolution or ordinance. This agency may be the governing body of the municipality, or it may be a new agency appointed by the governing body.

  3. A development plan is prepared and approved by the agency and the city.

  4. The base year is declared following adoption of the plan.

  5. The redevelopment agency will solicit developers and enter development agreements.

The links below provide sample legislation for different aspects of this process.

South Carolina

South Carolina Code of Laws (Unannotated) Current through the end of the 2008 Session

Texas

The Texas Tax Increment Financing Act
Describes the various activities, procedures and components necessary for local municipalities to designate a contiguous geographic area in their jurisdiction as a reinvestment zone.

District of Columbia

District of Columbia Tax Increment Finance Commission Act Bill 12-498
Establishes the District of Columbia Tax Increment Finance Commission. The Commission's purpose is to promote, develop, and advance the general prosperity and economic welfare of the people of the District, to relieve problems of unemployment and underemployment, to re-establish the downtown area as the primary retail shopping and entertainment center for the Washington metropolitan area, and within the downtown area, to improve public facilities and public infrastructure, to encourage private development, to foster the development of entertainment, cultural, recreational and residential, facilities, and to provide improved transportation and community facilities, by providing various means of financing public and private development costs in accordance with this act.

Illinois

MUNICIPALITIES (65 ILCS 110/) Economic Development Project Area Tax Increment Allocation Act of 1995.