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TIF involves the issuance and sale of tax-exempt
governmental revenue bonds to finance public
infrastructure redevelopment within one or more
predetermined geographic areas on the basis of specific
statutory eligibility criteria. To secure the repayment
of TIF bonds, the government consents to segregate into
a special account a portion (e.g., 25 percent, 50
percent) of the incremental growth in real property tax
collections occurring within the area from a specific
date. Sales tax increments may be applied to shorten the
repayment period, or to provide credit enhancement.
Tax increment projects must be consistent with statutory
criteria (a Redevelopment Plan) and typically are supported by project
feasibility studies, cost/benefit analyses, and development agreements with
sponsors of private projects within the benefited areas. Issuance powers and
limited tax collection authority may be delegated to TIF Districts, but
generally is retained by the government or its instrumentality.
The District, however, is in a unique position to complement
these infrastructure development tools by issuing up to $15 million of
tax-exempt Enterprise Zone (EZ) Bonds to assist in financing each qualified
privately-owned facility. At the same time, each such business annually may
claim federal employment tax credits, special expensing allowances and other
benefits during the five year life of the EZ designation. |
