Tax Increment Financing (TIF) was finally permitted in Washington after the passage of HB 1189 in 2021. Now, two years later, the Senate is considering some requested fixes and adjustments to the law.

As a reminder, Tax Increment Financing (TIF) captures a property’s appreciated value by using its increased property taxes to finance infrastructure improvements that benefit a designated area. Local jurisdictions that utilize TIF benefit from improved public infrastructure, increased economic development, and local job growth.

SB 5539, sponsored by Sens. Annette Cleveland (D–Vancouver) & Lynda Wilson (R–Vancouver) and requested by the State Treasurer, would make technical corrections to the current TIF program in an effort to make it more effective for local governments. As written, the bipartisan bill would:

• Ensure private investments made on government-owned lands are included in the calculated increment value.
• Establish that the relocation and construction of a government-owned facility would be included as an eligible project.
• Clarify the definitions of ‘increment value’ and ‘tax allocation base value’ to be in-line with current law regarding add-on levies.

AWC supported the creation of TIF in Washington in 2021 and supports these fixes that will make the TIF program more practical and useful for local governments.

Dates to remember

SB 5539 is scheduled for public hearing in the Senate Business, Financial Services, Gaming & Trade Committee on Tuesday, January 31 at 8 am.