Tax Increment Financing

Purpose:

Brownfield tax increment financing reimburses developers or Brownfield Redevelopment Authorities (BRA) using specified state and local taxes, for eligible environmental and non-environmental activities at eligible properties.  These activities are used for an identified economic redevelopment project.

 

Goals of the Program:

To reuse abandoned, vacant, or underutilized properties that are known to be contaminated, blighted, or functionally obsolete, and to promote environmental cleanups and economic development.

 

Criteria:

The criteria for the use of tax increment financing is identified in the Brownfield Redevelopment Financing Act, Act 381 of 1996 (Act 381).  The property must have a taxable value increase once the redevelopment is completed for tax increment financing to function.  The amount of taxes reimbursed by the BRA cannot exceed the costs identified in the approved Brownfield Plan, nor the actual amount spent on the eligible activities.  Local tax reimbursement is requested and approved at the local level.  If the developer or BRA is seeking to also use State school taxes, a plan must be submitted to the State for approval.

 

Dollar Amount(s) Available (Min or Max):

The maximum amount of tax increment financing available for a project is determined by the local BRA.

 

Eligibility: 

The project must fall within the jurisdiction of, and be approved by, a local BRA.  The property must meet the definition of an eligible property as defined in Act 381.  Only eligible activities, as defined in Act 381, can be reimbursed.  Tax increment financing may not benefit a liable party or relieve a liable party of responsibility for environmental response activities.

 

Application Process:

Projects need to be approved by the local unit of government and the appropriate BRA prior to requesting tax increment financing from the State.  Requests for State supported tax increment financing are accepted on a continual basis. 

 

Source(s) of Funds:

The funds used for reimbursement are the increased ad-valorem property taxes that are a result of the redevelopment of the eligible property.

 

Authority:

The Brownfield Redevelopment Financing Act, Act 381 of 1996.