Rhode Island Transforms Tax-Increment Financing Statute
The Rhode Island General Assembly recently approved modifications to the State’s Tax-Increment Financing (TIF) statute. The adoption of these revisions was a result of a two-year effort coordinated by New England Economic Development Services in Partnership with Karen Grande Esq. of the law firm Locke Lord, Grow Smart RI, and Pawtucket Mayor Don Grebien.
TIF authority has long been enabled under Rhode Island statutes. Nevertheless, the TIF program has not been widely used by municipalities and towns, in part due to specific procedures and requirements of the program. Following sweeping reforms in Connecticut’s TIF statutes, there has been a significant increase in local economic and community development investments in Rhode Island’s western neighbor. NEEDS paid notice and moved to organize similar changes to Rhode Island’s statute. As a result, Rhode Island’s cities and towns have a significantly improved resource to support critical investments in their communities.
One of the more significant changes to the TIF statute is the elimination of the need to have the TIF District established within a Redevelopment District. This change eliminates the need for a community to embark on the more bureaucratic and expensive process of adopting a redevelopment plan and establishing a redevelopment agency. The revised statute gives communities the alternative path of establishing a more simplified TIF District Plan to be managed through the community’s legislative body and chief elected official. The new statute also allows a community to enter into an agreement with a developer that extends beyond the term of the sitting legislative body. Until the passage of this revision, only the City of Providence had this authority. Another important change is the authority to establish a betterment fee to properties within the TIF District that benefit indirectly through the TIF funded private and/or public improvement. Additional clarifications were made in the TIF statute that defines the flexibility of the use of TIF funded proceeds, which up till now were not clear.
In an era of declining Federal and State resources, it is increasingly important that local communities find creative ways to facilitate strategic investments in public and private assets. Because of modifications to Rhode island’s Tax-Increment Financing statute, communities now have an added tool to use. If you would like to further explore the TIF program and how it can be used by your community or project, give us a call for a free, no obligation conversation.