Best Tax Increment Financing Lawyers in Washington

About Tax Increment Financing Law in Washington, United States

Tax Increment Financing, often called TIF, is an economic development tool that allows public entities to finance infrastructure and community improvements by capturing the expected increase in property tax revenues generated by the enhanced value of a redevelopment project. In Washington State, TIF programs are designed to help local governments spur investments in public projects that can encourage private development, increase property values, and raise additional tax revenue over time. By dedicating the future incremental increases in property tax revenues from a designated area, local governments can finance improvements such as roads, utilities, affordable housing, parks, and other public amenities upfront.

Why You May Need a Lawyer

Tax Increment Financing involves complex financial, legal, and regulatory processes. Here are some typical situations where seeking legal advice is beneficial:

• Understanding whether a specific project qualifies for TIF under state and local laws
• Drafting or reviewing project proposals, development agreements, and inter-local agreements
• Navigating the public hearing and approval process required for TIF districts
• Ensuring compliance with state statutes, administrative guidelines, and transparency requirements
• Addressing questions about the calculation and allocation of tax increments
• Resolving disputes among stakeholders, such as developers, local governments, and property owners
• Advising on the impact of TIF on existing taxing districts and overall community finances
• Handling litigation or challenges to the establishment or operation of a TIF district
• Structuring bond financing or other borrowing based on anticipated TIF revenues

Legal guidance ensures that TIF projects are structured in accordance with Washington law, protects client interests, and reduces the risk of costly legal or financial missteps.

Local Laws Overview

Washington State introduced the use of Tax Increment Financing under state law beginning in 2021, with detailed provisions allowing cities, counties, and port districts to establish TIF areas. Some of the most important legal considerations include:

• State Authorization: TIF is authorized under Revised Code of Washington (RCW) Chapter 39.114. Cities, counties, and port districts can designate TIF areas for public infrastructure improvement financing.
• Designation Process: The creation of a TIF area requires a public hearing, public notice, and findings of necessity and benefit. Local elected officials must adopt an ordinance or resolution to establish a TIF area.
• Duration: Each TIF district may operate for no more than 25 years.
• Eligible Improvements: Funds must be used for public improvements such as streets, utilities, affordable housing, and environmental remediation.
• Limitations: There are restrictions on the total number of active TIF areas a jurisdiction can have, as well as on the cumulative assessed value within all TIF areas compared to the jurisdiction's total assessed value.
• Transparency and Reporting: Local governments must maintain transparency by providing annual reports to the state and making documents available to the public.
• School Funding Protection: TIF in Washington is designed to protect state and local funding for public schools by excluding the state school levy from the increment allocated to TIF projects.
• Bond Financing: TIF can be used to secure the issuance of bonds, with the increment paying back the borrowed funds over time.

Strict adherence to these statutes is essential, as failure to comply can result in legal challenges or loss of funding.

Frequently Asked Questions

What is Tax Increment Financing?

Tax Increment Financing is a public financing method where the increase in future property tax revenues resulting from a rise in property values within a specific area is used to pay for public improvements that help generate those value increases.

Is TIF legal in Washington State?

Yes. Washington State enacted TIF legislation in 2021, outlined in RCW Chapter 39.114, enabling cities, counties, and port districts to establish TIF areas within certain guidelines.

Who can create a TIF area in Washington?

Cities, counties, and port districts in Washington may create TIF areas, provided they follow state law and local ordinance procedures.

What kinds of projects are typically funded with TIF?

Common projects include street and utility improvements, affordable housing, environmental remediation, parks, and other infrastructure enhancements intended to benefit the public and promote private investment.

How is the tax increment calculated?

The tax increment is the difference between the property tax revenues generated by properties within the TIF district before improvements (the base year value) and after the improvements have increased property values.

Are there protections for school funding?

Yes. The state school levy and other voter-approved levies are typically excluded from the increment calculation to ensure school funding is not reduced by TIF activities.

How long can a TIF area exist in Washington?

State law limits the life of a TIF area to a maximum of 25 years.

Do TIF projects require public input?

Absolutely. Establishing a TIF area involves public notice, hearings, and opportunities for community members to provide feedback before a final determination is made.

Can TIF funds be used for private projects?

No. TIF funds must be used exclusively for public infrastructure and improvements, not for private business or real estate development directly.

What happens if TIF revenue projections fall short?

If actual tax increments are lower than projected, local governments may need to adjust project plans, seek alternative funding sources, or delay improvements to avoid financial risk.

Additional Resources

The following resources and organizations may be helpful for those seeking information about TIF in Washington:

• Washington State Department of Commerce - Provides guidance and resources for municipalities considering economic development tools.
• Municipal Research and Services Center (MRSC) - Offers detailed information, model ordinances, and frequently asked questions about local government finance.
• Washington State Auditor's Office - Supplies reporting requirements, audit guidelines, and transparency measures for TIF projects.
• Local city, county, or port authority legal and planning departments - They often provide specific guidance on projects within their jurisdiction.
• State and local bar associations - Useful for finding experienced attorneys who specialize in public finance and redevelopment law.

Next Steps

If you are considering a Tax Increment Financing project or have questions about TIF in Washington, it is wise to consult a qualified attorney with experience in public finance or municipal law. Here are recommended steps:

1. Identify the specific nature of your TIF concern or project idea.
2. Gather relevant documents, such as project plans, proposed sites, and any communications with local officials.
3. Contact your local government planning or legal department to learn about any local procedures.
4. Consult with a knowledgeable TIF attorney for a detailed review of your project, compliance considerations, and legal strategy.
5. Participate in public hearings and engage with the community to ensure broad support.
6. Keep a record of all meetings, agreements, and notices for reference throughout the process.

Seeking professional legal guidance early in the process can help you navigate the complexities of Washington's TIF laws, avoid pitfalls, and ensure your project proceeds smoothly and lawfully.