Pennsylvania Tax Increment Financing (TIF) Guarantee Program

Pennsylvania Department of Community and Economic Development

Program Type:

Tax Increment Financing

Eligible Geography:

Pennsylvania

Program URL:

https://dced.pa.gov/programs/tax-increment-financing-tif-guarantee-program/

Summary:

The program provides credit enhancement for TIF projects to improve market access and lower capital costs through the use of guarantees to issuers of bonds or other indebtedness. Its objective is to promote and stimulate the general economic welfare of various regions and communities in the Commonwealth and assist in the development, redevelopment and revitalization of Brownfield and Greenfield sites in accordance with the TIF Act.

The maximum amount that the CFA will pay under its guarantee is $5,000,000, inclusive of principal and interest. Guarantee amounts will be determined by the scope of the project, the estimated projections of future tax revenues to be generated by the project, the estimated financing cost savings realized through the provision of a guarantee, and the ability of the CFA to assume the rights to security provided to the holders of the TIF project debt in the event of a default.

Eligible Recipients:

Local Government

Eligible Recipients Detail:

Any issuer of TIF Debt Obligations for a project located within a municipality, other than a city of the first or second-class, may apply to the Tax Increment Financing Guarantee Program. Eligible issuers under the TIF Act include all municipal authorities, industrial and commercial development authorities, and redevelopment authorities including boroughs, townships, towns, counties and home rule municipalities.

Eligible Purpose:

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

Eligible Purpose Detail:

Eligible development activities include:

Infrastructure and environmental projects for industrial enterprises and retail establishments; Infrastructure, environmental and building projects for manufacturers, hospitals, convention centers and associated hotels; Utilization of abandoned or underutilized industrial, commercial, military, previously mined institutional sites or buildings; or undeveloped sites planned and zoned for development in accordance with any existing comprehensive municipal plan.

Other Eligibility Criteria:

To be eligible to receive a participate in a Pennsylvania TIF and the guarantee program, a project must meet at a minimum the following criteria:

-The project must be located within a TIF district and must meet all of the requirements imposed by the Tax Act. The project must be located in a blighted area.
-The project may include the cost of publicly-owned infrastructure located outside of the TIF district which directly benefits the project.
- The project must be located on previously utilized property or on undeveloped property that is planned and zoned for development.
-The project must be for the: redevelopment, reuse or revitalization of previously developed land, including previously mined areas; or development of undeveloped land which may be the subject of future development pursuant to any existing comprehensive municipal plan and is zoned for that development at the time of application.
-All applicants must demonstrate that the tax increment to be realized as a result of the TIF project will be sufficient to offset the amount of debt service to be incurred.
-Business or private developers must agree to create a certain number of permanent full-time jobs within the TIF district.