Tax Increment Financing
The purpose of this guide is to describe the criteria for the use of Tax Increment Financing (TIF) and the procedures which will be used for evaluating proposals requesting TIF.
What is TIF?
Tax Increment Financing is a public financing method which has been used for redevelopment and community improvement projects in many countries including the United States for more than 50 years. With the federal and state sources for redevelopment generally less available, TIF has become an often-used financing mechanism for municipalities. Similar or related approaches are used elsewhere in the world.
TIF in Nebraska is primarily designed to finance the public costs associated with a private development project. Essentially, the property tax increases resulting from a development are targeted to repay the public investment required by a project.
TIF provides a means of encouraging private investment in deteriorating areas by allowing city governments to devote all property tax revenue increases to repay the public investment needed to attract development. Nebraska voters approved community tax increment finance (then known as community improvement financing) in November 1978 and the Unicameral passed enabling legislation in 1979. The legislature revised the TIF statutes over the years. Currently, 45 other states have authorized TIF.
TIF Steps - Potential Timeline
- Application and fee presented
- Community Redevelopment Authority (CRA) reviews for completeness and determines if not financially feasible without TIF.
- If acceptable, forward for preparation of Redevelopment Plan and Cost Benefit analysis and Redevelopment Contract (prepared by TIF attorney).
- The CRA reviews the Redevelopment Plan and forwards to the Planning Commission for public hearing.
- Notice of public hearing is published twice, each one week apart, and letters to taxing entities and neighborhood associations are mailed by certified mail. (Public hearing is held at least 10 days after second publication.)
- Planning Commission holds the public hearing and passes a resolution making recommendation on the plan.
- The CRA receives the Planning Commission recommendation and takes action to pass a resolution recommending to the City Council per section 18-2114.
- Notice of public hearing before the City Council is published two times, one week apart, and letters to taxing entities and neighborhood associations are sent by certified mail. The public hearing is held at least 10 days following the date of the second publication of the meeting notice.
- City Council passes a resolution approving the Redevelopment Plan.
- The CRA meets to pass resolution authorizing the signing of the Redevelopment Contract and issuance of bond.
- Redevelopment Contract is signed and Notice to Divide Taxes is filed with the County Assessor and County Treasurer.
** You may be required to provide additional financial information (ex-ROI statement, letter of necessity from lender) outside of the required TIF application.
** You may be required to receive approval from the Architectural Review Committee prior to final TIF approval.
Link: TIF Application (PDF)