Best Tax Increment Financing Lawyers in Pennsylvania

About Tax Increment Financing Law in Pennsylvania, United States

Tax Increment Financing, often referred to as TIF, is a public financing method used by municipalities and counties in Pennsylvania to catalyze economic development in specific areas, commonly known as TIF districts. The process enables local governments to stimulate private investment and redevelopment by using the future increase in property tax revenues generated by the development to finance project costs, such as infrastructure improvements, site remediation, and other eligible expenses. Pennsylvania's Tax Increment Financing Act, enacted in 1990, provides the legal framework for establishing and managing TIF districts within the state, allowing local governments to partner with developers to revitalize underdeveloped or blighted areas without raising new taxes.

Why You May Need a Lawyer

Navigating the rules and procedures related to Tax Increment Financing in Pennsylvania can be complex. You may need a lawyer in the following situations:

• When establishing or proposing a new TIF district
• To interpret the requirements and restrictions outlined in the Pennsylvania Tax Increment Financing Act
• During negotiations or drafting agreements between local governments and private developers
• If you are a property owner or developer concerned about how TIF may affect your property or tax obligations
• To challenge or participate in public hearings regarding TIF proposals
• When compliance issues, contract disputes, or changes in project scope arise during or after project implementation
• Advising on eligible costs, use of TIF funds, and how to structure financing while remaining compliant with state and federal laws

A qualified attorney can help ensure that all procedures are properly followed, rights are protected, and all parties meet statutory and contractual obligations.

Local Laws Overview

Pennsylvania's TIF law is governed primarily by the Tax Increment Financing Act (Act 113 of 1990). Key aspects of this law include:

• Creation of TIF districts must be approved by local municipal authorities, school districts, and counties, often through public hearings
• A redevelopment proposal must include a detailed plan, outlining the boundaries of the TIF district, project goals, expected costs, and anticipated tax increment
• Only the incremental increase in tax revenues (above the baseline established when the district forms) may be used to finance eligible project costs
• Funds can be used for public improvements, demolition, site preparation, environmental remediation, and other approved purposes
• TIF districts typically have a limited duration, often up to 20 to 25 years, depending on the project and local approvals
• There are reporting and accountability requirements to ensure transparency in the use of TIF funds
• Special requirements may apply in redevelopment or blighted areas, and close coordination with local planning commissions is often required

Frequently Asked Questions

What is Tax Increment Financing?

Tax Increment Financing is an economic tool that allows local governments to fund public improvements and encourage private development by using the future increase in property tax revenues generated by those developments.

Who can initiate a TIF district in Pennsylvania?

A local municipal authority, school district, or county can propose a TIF district, often in coordination with developers or community organizations, subject to public approval processes.

What types of projects qualify for TIF funding?

Eligible projects generally include infrastructure upgrades, site remediation, new facilities, and other improvements that aim to combat blight, stimulate redevelopment, and foster economic growth within a targeted area.

How are TIF funds generated?

TIF funds come from the increased property tax revenues, known as the "tax increment," resulting from rises in property values caused by the new development or improvements within the district.

How long does a TIF district last?

TIF districts typically last for 20 to 25 years, depending on the project's duration and terms established by local authorities at the time of approval.

Can TIF be used for private developments?

While TIF usually funds public infrastructure and improvements, private developers can benefit indirectly as the upgraded infrastructure often increases the value and utility of their properties. In some cases, funds may be used to offset specific private development costs if they meet eligibility requirements.

Do TIF districts result in higher property taxes for existing residents?

No, TIF does not increase the property's base tax rate for existing residents. Instead, it reallocates the additional tax revenue generated by new development to fund the improvements.

What is required for TIF district approval?

A TIF proposal typically requires public notice, hearings, and approval from the governing bodies of the municipality, county, and school district. Detailed plans and financial projections must be provided for review.

Can TIF districts be challenged or opposed?

Yes, affected property owners and residents may express support or opposition to a proposed TIF district during public hearings or through other available legal avenues.

Is professional legal assistance recommended for TIF matters?

Yes, because TIF laws and procedures are complex and involve multiple stakeholders, consulting with a lawyer experienced in Pennsylvania tax and municipal law is strongly recommended.

Additional Resources

If you need more information or are seeking legal advice on Tax Increment Financing in Pennsylvania, consider these resources:

• Pennsylvania Department of Community and Economic Development (DCED) - Offers guides and regulations on TIF projects
• Local municipal planning offices - Provide information on current and proposed TIF districts in your area
• Pennsylvania Redevelopment Authorities - Often manage TIF projects and can offer practical insights and contacts
• State Bar Association or local bar associations - Can help you find attorneys who specialize in municipal finance and TIF law
• Community development organizations familiar with TIF-funded projects

Next Steps

If you believe you may be affected by or wish to pursue a Tax Increment Financing project in Pennsylvania, take the following steps:

1. Educate yourself about the basics of TIF and your rights as a property owner, developer, or community member
2. Contact your local planning department or redevelopment authority to learn about any existing or proposed TIF districts
3. Consult an attorney with experience in Pennsylvania TIF law to review potential impacts, assist in negotiations, evaluate proposals, or address legal concerns
4. Participate in public meetings or hearings regarding TIF proposals to stay informed and make your voice heard
5. Use additional resources, such as those listed above, to ensure a thorough understanding of your options and responsibilities

Taking these proactive steps will help you navigate the Tax Increment Financing process more confidently and protect your interests.