Best Tax Increment Financing Lawyers in California

About Tax Increment Financing Law in California, United States

Tax Increment Financing (TIF) is a tool used by local governments and redevelopment agencies in California to promote economic development and support community revitalization projects. Under TIF, municipalities can capture the future increase in property tax revenue generated from a designated district, known as a TIF district, and use these funds to finance public infrastructure, affordable housing, or other improvements within that area. The idea is that public investment will spur private development, leading to increased property values and, thus, higher tax revenues without raising the base tax rate for existing property owners.

California's approach to TIF has evolved over time, partly due to the dissolution of redevelopment agencies in 2012. The state now uses mechanisms such as Enhanced Infrastructure Financing Districts (EIFDs) and Community Revitalization and Investment Authorities (CRIAs) to achieve similar redevelopment goals. Compliance with state and local legislation is required to initiate, structure, and administer these financing districts.

Why You May Need a Lawyer

Tax Increment Financing can be complex, involving a blend of municipal finance, property law, and community planning. Here are some common situations where legal help is beneficial:

• You are a developer interested in leveraging TIF funds for a new project.
• Your property is located within a proposed or existing TIF district and you have concerns about your rights or obligations.
• You are a municipality or public authority seeking to establish or administer a TIF district or redevelopment project.
• You want to challenge, support, or understand the legal basis of a TIF district's formation or its ongoing activities.
• You need help negotiating or reviewing TIF-related agreements, such as development agreements or public-private partnerships.
• You are unsure about compliance with California’s state laws or local ordinances governing TIF.

A qualified attorney can help you understand the legal landscape, minimize your risks, and advance your goals when it comes to TIF.

Local Laws Overview

California’s legal framework for Tax Increment Financing has changed significantly over the last decade. Here are some key aspects:

• Redevelopment agencies, once the primary vehicle for TIF in California, were eliminated by AB X1 26 in 2012, shifting the focus to other models.
• Enhanced Infrastructure Financing Districts (EIFDs), authorized under Senate Bill 628, allow cities and counties to finance infrastructure and development projects using TIF mechanisms, with less administrative burden than former redevelopment agencies.
• Community Revitalization and Investment Authorities (CRIAs), created by AB 2, are designed to support economic development in disadvantaged areas, also using tax increment revenues.
• The formation of these districts typically requires public hearings, adoption of infrastructure or revitalization plans, and sometimes voter approval for certain types of debt.
• TIF projects remain subject to important state laws, including California Environmental Quality Act (CEQA) compliance, and may also require coordination with local planning entities.
• Not all taxing entities are required to participate in a TIF district, and each may choose the extent of their tax increment commitment.

Understanding this legal environment is crucial to the successful implementation or challenge of TIF programs in California.

Frequently Asked Questions

What is Tax Increment Financing and how does it work?

Tax Increment Financing is a public financing method that uses future increases in property tax revenue from a specified district to fund current improvements, such as infrastructure, which in turn is expected to boost further economic development.

Can California cities still use TIF?

Yes. Although traditional redevelopment agencies were eliminated in 2012, cities can now use Enhanced Infrastructure Financing Districts, Community Revitalization and Investment Authorities, and similar vehicles to implement TIF projects.

What kinds of projects can be funded with TIF in California?

Projects may include public infrastructure improvements, affordable housing, parks, environmental remediation, transit-oriented development, and community facilities in eligible districts.

Who approves the formation of a TIF district?

Typically, the local city council or county board initiates and approves a TIF district. Some forms, like EIFDs, may require a public vote if issuing bonds backed by tax increment revenue.

Can property owners opt out of a TIF district?

While property owners cannot opt out of a TIF district once it is formed, they have opportunities to participate in public hearings and provide input before approval.

Does TIF increase my property taxes?

TIF does not increase the property tax rate but redirects the increased tax revenue resulting from rising property values within the district to fund development projects.

How long does a TIF district last?

The duration depends on the plan and may range from 20 to 45 years, depending on the specific enabling legislation and project financing schedule.

Can TIF funds be used for private projects?

TIF funds are typically used for public improvements, but they may support private development indirectly when such projects provide a public benefit, such as affordable housing or community amenities.

What are the risks or downsides to TIF?

Potential risks include diverting funds from other taxing entities like school districts, uncertainty around future property values, and public opposition if the process is not transparent or the benefits are unclear.

Do I need a lawyer to engage with TIF issues?

While not legally required, consulting a lawyer is highly advisable for navigating statutory requirements, negotiating agreements, protecting your interests, and ensuring compliance with all applicable laws and regulations.

Additional Resources

When seeking more information or help, consider the following resources:

• California Department of Finance - Oversees dissolutions and successor agencies of former redevelopment agencies and provides guides on TIF-related districts.
• California State Controller’s Office - Maintains records and compliance data on local government finance, including TIF districts.
• Local City or County Economic Development Departments - Can provide information about local TIF programs, infrastructure financing districts, and related public hearings.
• American Planning Association, California Chapter - Provides information and guidance on urban planning issues, including TIF-related strategies.
• California Association for Local Economic Development (CALED) - Offers resources and networking for those engaging with economic development tools like TIF.

Next Steps

If you believe you may need legal assistance with Tax Increment Financing in California, consider the following steps:

• Gather all records and documents related to your property or development interests within the TIF district.
• Clarify your goals or concerns, whether you are seeking to initiate a project, respond to a notice, or understand your obligations.
• Research local attorneys or law firms experienced in TIF, municipal finance, or redevelopment law.
• Schedule a consultation to discuss your situation and review your options for moving forward.
• Stay informed about public meetings, proposals, and opportunities to participate in the decision-making process concerning TIF districts in your area.

Thorough legal guidance can help ensure that you make informed decisions and protect your interests under California’s evolving Tax Increment Financing laws.