Alabama Tax Increment Financing

Alabama Department of Revenue

Program Type:

Tax Increment Financing

Eligible Geography:



In Alabama, the use of tax increment financing by eligible local governments is authorized by Sections 11-99-1. A TIF is a tool that allows municipalities to promote economic development using revenues from future funding streams. The City makes public improvements in a defined geographic area (a special district) with the intent of stimulating economic development. As the development occurs, the value of the property increases within the district, and so do revenues generated from property taxes paid by the owners. Through a TIF, the City is allowed to use the revenues generated by the incremental increase in property tax values to pay for the improvements it made to support the development and to help pay for other public infrastructure improvements such as new schools.

Eligible Recipients:

Local Government; For-Profit Business

Eligible Recipients Detail:

Alabama statute permits any county or municipality to create tax increment districts, issue tax increment obligations, and deposit moneys into tax increment funds.

Eligible Purpose:

Building Infrastructure; Last Mile Infrastructure; Anchor Institution Infrastructure; General Infrastructure

Eligible Purpose Detail:

Eligible projects for TIF funds include Beautification components & related hardware, bike lanes in street right of way, bridge construction & repair, building acquisition, convention centers, curb & sidewalk work, debt service, decorative pavers, demolition, drainage facilities, environmental remediation, force mains, hiking & biking trails, land acquisition & relocation, landscaping, lift stations, lighting, park improvements, parking structures, pathways that facilitate intermodal transportation, pedestrian bridge systems that link commercial centers to transit systems, pedestrian platforms for rail or light rail transit systems & similar facilities, planning costs, public buildings, public golf courses & buildings, public roads, public tunnel systems for private buildings, publicly owned & maintained utilities, sanitary sewers, sewer expansion & repair, sewer pump stations & related equipment, sidewalks, sky bridges that link public buildings, storm drainage, street construction & expansion, traffic signals & related equipment, transmission lines, wastewater treatment facilities, water supply, environmental impact studies, land assembly costs, professional services, financing costs.

For manufacturing and industrial, the law allows for cities to borrow money to finance underutilized large tracts of real property suitable for the location of automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry manufacturing facilities.

Other Eligibility Criteria:

Only blighted areas may be designated as TIF districts. Public hearings are also required before an area can be designated a TIF district.