State Supplemental Tax Increment Financing (TIF)

Eligible Areas
To be eligible for State Supplemental Tax Increment Financing (State TIF), the redevelopment project must meet each of the following:

• The redevelopment project area must be blighted.
• The redevelopment project area must be located in:
  • a state enterprise zone;
  • a federal empowerment zone;
  • an urban core area; or
  • a central business district
• The zone or blighted area must contain at least one building that is 50 years of age or older.
• The redevelopment project area, over the past 20 years, must have experienced a generally declining population or generally declining property taxes.

Eligible Applicants
Municipalities.

Program Benefits/Eligible Uses
When local tax increment financing leaves a gap for a redevelopment project, a municipality can apply for a portion of the new state tax revenues created by the project to be disbursed to cover the financing gap for eligible redevelopment costs on the project.

To be eligible for State TIF, the underlying local TIF must dedicate at least 50% of the amount of the new local sales tax (and earnings tax in St. Louis and Kansas City) revenue and 100% of the amount of the new real property tax revenue created by the project each year for which state TIF is sought.

An applicant may be approved to receive up to 50% of the net new state sales tax revenue (general revenue portion only; excluding dedicated taxes) generated in the project area OR up to 50% of the increase in state income tax revenue from net new jobs in the project area.  An applicant cannot receive both.

State TIF may be awarded for a period of up to 15 years (a longer period may be requested, but not to exceed 23 years).

The TIF project funds may be derived from a bond issue (retired with the local and state incremental revenues), or a reimbursement to the developer for eligible costs.

Eligible redevelopment project costs include the following:

• studies, surveys, plans and specifications.
• land acquisition, land preparation.
• rehabilitation, reconstruction or repair or remodeling of existing buildings and fixtures.
• construction of public works or public improvements.
• professional services such as architectural, engineering, legal, financial and planning.
• financing costs such as expenses of issuance of bonds.

*Any expenditures made prior to approval for State TIF cannot be reimbursed with state funds.