TIF is short for Tax Increment Financing.  First created in the 1950's the fiancial tool is currently used in about forty of the fifty states.  The concept behind TIF's is to allow a political entity to capture a share of new taxes generated by a new development to fund cost which the public will incur or to financially assist the developer for a project in an area which the political entity is promoting development.  Most TIF's allow the political entity to capture not only their own taxes but also other taxes collected by other political entities.  TIF encourages development of blighted, substandard and economically underutilized areas that would not be developed without public assistance.  The powers of TIF are exercised by its Board of Commissioners who are citizens of the city, appointed by the mayor, and representatives of the affected taxing districts. 

How TIF Works:

Property taxes are frozen for up to 23 years (maximum life of a TIF project). Increases in city and county taxes due to new construction, rehabilitation and infrastructure improvements from the project are abated for up to 23 years. 

Instead, property owners make PILOTS (Payments In Lieu Of Taxes), for the amount of the taxes abated, to a special allocation fund as well as 50% of all local Economic Activity Taxes (EATs) (e.g.. sales, utility, and earnings taxes) generated within the project. These funds are used to reimburse the developer for approved project costs. 

Any overages in the PILOTS are reallocated to the appropriate taxing districts. The municipality's or county's condemnation powers can be used in a TIF area to acquire property for use by a private developer implementing a project contemplated in the TIF plan. 

Eligibility Requirements

1. Projects using TIF must have plans approved by both the TIF Commission and the Ozark City Council.
2. TIF can only be used for redevelopment projects that would not be reasonably expected to occur without the assistance of TIF (the "but for" test).
3. The redevelopment area must be determined by the city or county to be either a "blighted area,""conservation area," or "economic development area" as defined by the TIF Act.
4. The redevelopment plan must conform with the general development plans of Ozark, Missouri.
5. A cost-benefit analysis must be completed and show that the economic benefits flowing to the City and other taxing districts as a result of the TIF plan are greater than the costs.