Tax Increment Financing for Transit Projects (2020)

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10 TCRP LRD 55 tion that is subject to constitutional debt limitation provisions.56 Geheb noted that, such legislative declarations have not prevented state courts from making independent assessments as to their constitutionality. The high courts in fourteen states have considered whether TIF is constitu tional debt: seven states have held that TIF bonds are not a constitutional debt (Colorado, Florida, Indiana, Michigan, Missouri, South Carolina, and Utah) seven states have held TIF bonds are con- stitutional debt (Arizona, Iowa, Kentucky, Oklahoma, South Dakota, West Virginia, and Wisconsin) and two of these seven states have subsequently allowed alternative TIF programs to evade constitu- tional debt limitations (Iowa and Oklahoma). In so holding, state courts have applied three doctrines: (a) the public authority doctrine; (b) the special fund doctrine; and (c) the moral obligation or non- appropriation debt doctrine.57 Comprehensive study of TIF applications in general and for particular uses like transit has its challenges, despite the fact that TIF has been widely used, has sparked considerable public dis- cussion, and has even prompted litigation over the years. For one, TIF is grounded in individual state statutes, each of which may specify a particular TIF designation process, eligible TIF expenditures, and other state specific operational parameters. To date, 49 states and the District of Columbia authorize TIFs, and Arizona repealed its TIF statute in 1999. Reviewing statu- tory enactions two states enacted TIF statutes between 1951 and 1960, four states between 1961 and 1970, 11 states between 1971 and 1975, and 20 states between 1976 and 1980. The re- maining 13 states created statutes after 1980.58 Briffault notes that “ Twenty-eight states approved TIF by 1984, thirty-three by 1987, and forty-four by 1992. By the early 1990s, 56% of cities with populations over 100,000 had used TIF.”59 Additionally, it would take significant effort to capture the entire breadth of TIF applications. No centralized database of TIF districts is publicly available within the United States.60 The number of actual TIF districts is estimated to fall within the tens of thousands. For example, in 1980 California had 299 TIF areas and this increased to 658 by 1990; Iowa had 2,400 TIF districts as of 1999.61 Maine saw its number of TIFs grow from 56 Julie A Goshorn, Note: In a TIF: Why Missouri Needs Tax Incre- ment Financing Reform. 77 Wash U.L. Q. 919, Fall 1999. 57 Phillip J.F. Geheb. Tax Increment Financing Bonds as “Debt” Under State Constitutional Debt Limitations. 41 Urb. Law 725, Fall 2009. 58 Goshorn, supra note 56. 59 Richard F. Dye and David F. Merriman, The Effect of Tax Incre- ment Financing on Land Use, in Dick Netzer, ed, The Property Tax, Land Use and Land Use Regulation 37, 49-51 (Lincoln Institute of Land Policy 2003) and David Merriman, Does TIF Make It More Difficult to Manage Municipal Budgets? A Simulation Model and Directions for Future Research? *4 (Lincoln Institute of Land Policy unpublished manuscript, May 1, 2009). 60 Richard Briffault. Symposium: Reassessing the State and Local Government Toolkit: The Most Popular Tool: Tax Increment Financing and the Political Economy of Local Government. 77 U. Chi. L Rev. 65 Winter 2010. 61 Spencer W. Holm. What’s the TIFF about TIF? An Incremental Approach to Improving the Perception, Awareness and Effectiveness of Urban Renewal in Idaho. 50 Idaho L. Rev. 273, 2014. that did not exist before its implementation.54 The Institute for Transportation Development Policy itself found a small effect of transit service quality, as measured on by the various ser- vice metrics on its Scorecard, on the level of transit-oriented development.55 III. THE LEGAL FRAMEWORK UNDERPINNING TIFS For any entity considering the potential use of tax increment financing to support transit investment, whether capital or op- erational, in-depth understanding of the state-level legal frame- work for TIFs will be crucial. For a given state, this framework is revealed in the underlying statutes enabling the use of TIF and in the body of case law that has accrued to clarify conflict- ing interpretations of those statutes. Together, the statutes and case law will determine what entities may initiate TIF, how to structure it, the procedures to follow, what activities TIF may support, and more. The sections that follow report on a comprehensive state- by-state review both of TIF enabling legislation and of TIF case law. The review has aimed to illuminate how key elements of the TIF legal framework influence the likelihood that TF can be used to support public transit investment. Directly below, it includes discusses general observations about the use of TIFs broadly. The report then turns to state enabling legislation; it highlights common themes in how state laws circumscribe the use of TIFs and notes individual states requirements in a state- by-state summary table. Subsequently, the report reflects on the key issue areas around which TIFs have been litigated. Since TIF was first introduced in California over 50 years ago, it has become a ubiquitous component of the toolkit em- ployed by local jurisdictions to finance economic development, infrastructure improvements, and business relocation. Local juris dictions turn to TIF to marshal private sector involvement in development opportunities that, but for the TIF, may not occur otherwise. While tax abatements are a similar tool to accomplish such economic development objectives, local jurisdictions often pre- fer TIFs for certain TIF characteristics. For instance, TIF reduces the need to transfer property to a government entity, which can present financing challenges. TIF may also be more politically palatable than an abatement as it is not seen as a direct subsidy. Further, TIF can be monetized in a way that tax abatements can- not, and can provide an infusion of capital to get projects off the ground. Further, TIF popularity may also reflect the fact that, follow- ing most TIF enabling statutes, bonds issued backed by TIF rev- enues are not treated as a debt or obligation of the local jurisdic- 54 Victoria A. Perk, M. Catala & Steven Reader, Land Use Impacts of Bus Rapid Transit: Phase II—Effects of BRT Station Proximity on Property Values along the Boston Silver Line Washington Street Corridor (2012). 55 Hook, Lotshaw, and Weinstock, supra note 24 at 94.

TCRP LRD 55 11 Few conclusions can be drawn about how much TIF fund- ing has been spent on transportation infrastructure in general or on transit in particular. Several existing studies have sought to quantify the extent of TIF usage, for instance as a percent- age of total development funding. However, with no central- ized database of TIF districts, and uneven state requirements for the collection of TIF data, isolating TIF investments in spe- cific areas is difficult. Still, the literature suggests that TIF has been a significant driver of development, and that TIF revenues grew considerably in percentage terms over short periods of time. Wisconsin TIFs, for example, grew 400% between 1990 and 2008, from under $3 billion to more than $13 billion.70 By 2008, Wisconsin had almost 1,000 active TIF projects assessed at just over $15 billion in assessed tax value.71 Iowa’s 2,400 TIF districts in 1999 were estimated to cover 7.1% of its urban tax base.72 California was estimated to have “upward of 10% of its property tax base included in a TIF district in 2001.”73 Idaho by 2009 had 3.9% of property taxes going to TIFs.74 In a 1995 finan- cial review of TIF districts in Minnesota, the 400 TIF districts reviewed was found to have created $203.3 million in tax incre- ment statewide, which was 8% of the local governments’ total tax capacity.75 Out of these 400 TIF districts, 110 created prior to 1979 represented 8% of all TIF districts, but captured 30% of the total tax increment.76 A study on Chicago TIFs in 2015 found nearly half of the $1.3 billion in TIF funds spent since 2011 went to the Central Business District (the Loop and surrounding areas), which only account for 5% of Chicago’s geographic area and 11% of its population.77 A 2001 report on Maine noted that amount of municipal TIF dollars going toward infrastructure, while slowly increasing since 1995, had been returned more 70 John Kovari, Research Brief: Too Much or Not Enough? A Statisti- cal Analysis of Tax Incremental Financing in Wisconsin, 97 Pub. Pol’y F., no. 3, July 2009, at 1. 71 Id. at 9 and. John Kovari et al., The Two Sides of TIF: An Analysis of Tax Incremental Financing in the Greater La Crosse Region 1 (2013). University of Wisconsin Extension. Available at https://slidex.tips/download/the-two-sides-of-tif-an-analysis-of-tax- incremental-financing-in-the-greater-la. 72 Richrd Briffault, The Most Popular Tool: Tax Increment Financing and the Political Economy of Local Government, 77 U. CHI. L. REV. 65, 71 (2010). 73 Holm, supra note 61. 74 Holm, supra note 61. 75 Frank S. London. The Use of Tax Increment Financing to Attract Private Investment and Generate Redevelopment in Virginia, 20 Va. Tax Rev. 777, Late Spring 2001. 76 Office of the Legislative Auditor, State of Minnesota, Tax Incre- ment Financing 1 (1996); Jonathan M. Davidson, Tax Increment Financ- ing as a Tool for Community Redevelopment, 56 U. Det. J. Urb. L. 405, 407 (1979); and Sam Casella, What Is TIF?, in Tax Increment Financing 1, 2-3 (James Hecimovich ed., 1985). 77 Ben Joravsky & Mick Dumke, Who Wins and Loses in Rahm’s TIF Game? Chi. Reader (Mar. 26, 2015), http://www. chicagoreader.com/ chicago/mayor-rahm-emanuel-tif-funds-downtown- neighborhoods/ Content?oid=17009841 [https://perma.cc/ 7CA5-R4T2]. 37 districts in 1993 to about 120 in 1999.62 In 2003, Wisconsin had 789 TIF districts.63 The Texas Comptroller identified over 100 cities having at least one tax increment investment zone as of 2005 and by 2018, the Texas Comptroller showed a total of 298 existing districts with 34 districts created between 2016 and 2018.64 In 2007, Illinois was estimated to have over 1,000 TIF districts, California approximately 771, Connecticut less than five districts, North Carolina three TIF projects, Missouri had 291 TIF districts, Chicago, Illinois, had 155 TIF districts, plus there were 402 active TIF districts throughout Cook County where Chicago is located.65 New York, however, was noted to have only had two reported uses as at 2005, one of which was used to fund road improvements for $770,000. New York’s lim- ited use of TIF has been attributed to its reliance instead on tax abatements.66 Also, because the New York State constitution places tax increments from school districts out of local juris- diction’s reach, states do not generate enough revenue to meet principal and interest payments.67 The limited use of TIF in New York has also meant no challenges to New York’s TIF statute thus far.68 The states of Alabama, Rhode Island, Utah, Vermont and Washington have also only seen single challenges to their TIF statutes in 2006, 2003, 2000, 2018, and 1995 respectively.69 62 See Marc Breslow, Economic Development Subsidies in Maine: Modest Job Gains at High Cost, COMMONWEALTH INST. (Dec. 15, 1999). 63 Briffault, supra note 60. 64 Texas Comptroller of Public Accounts. Biennial Registries of Reinvestment Zones for Tax Abatements and Tax Increment Financing (2005), available at http://www.window.state.tx.us/ taxinfo/proptax/ registry06/districts.pdf; and Texas Comptroller of Public Accounts. Biennial Registries of Reinvestment Zones for Tax Abatements and Tax Increment Financing. 2018. Accessed at: https://comptroller.texas.gov/ economy/local/ch311/biennial-reports.php. 65 See generally Holm, supra note 61; George Lefcoe, Redevelopment in California: Its Abrupt Termination and a Texas-Inspired Proposal for a Fresh Start. 44 Urb. Law. 767 Fall, 2012; Jennifer Petersen, The State of Tax Increment Financing in the United States, 45 St. Tax Notes Mag. 601, 602-03 (Aug. 27, 2007); and John Kovari, Too Much or Not Enough? A Statistical Analysis of Tax Incremental Financing in Wisconsin, 97 Pub. Pol’y F., no. 3, July 2009, at 1. 66 Amy Cerciello, Comment: The Use of Pilot Financing to Develop Manhattan’s Far West Side 32 Fordham Urb. L.J. 795, 800 (2005). 67 Gary P. Winter, Tax Increment Financing: A Potential Redevelop- ment Financing Mechanism for New York Municipalities, 18 Fordham Urb. L. J. 655, 682 (1991); and Citizens Budget Commission. Tax Increment A Primer 2017), available at https://cbcny.org/research/ tax-increment-financing-primer; and (noting that TIF had never been used in New York City and rarely in New York State); and New York City Independent Budget Office. Fiscal Brief: Learning From Experience: A Primer on Tax Increment Financing. September 2002 https://ibo.nyc.ny.us/iboreports/TIF-Sept2002.pdf. 68 Cerciello, supra note 66 highlighted this, and a search using Nexus conducted in October 2019 did not produce any TIF challenges since 2005. 69 Chism v. Jefferson County, 954 So. 2d 1058; 2006 Ala. LEXIS 275; Sun-Lite P’Ship v Town of W. Warwick, 838 A.2d 45, 2003 R.I. LEXIS 236; Price “Dev. Co. V. Orem City, 2000 UT 26, 995 P.2d 1237, 2000 Utah LEXIS 21, 387 Utah Adv. Rep. 78; Long v. City of Burlington, 2018 VT 103, 199 A.3d 542, 2018 Vt. LEXIS 146, 2018 WL 4518668 and Leonard v. Spokane. 27 Wn.2d 194, 897 P.2d 358, 1995 Wash. LEXIS 178.

12 TCRP LRD 55 can Planning Association also developed a model TIF statute within its online Growing Smart Legislative Guidebook.80 State enabling statutes for TIF typically authorize only local government entities—chiefly cities and counties—to under- take TIFs. Seven states—Connecticut, Colorado, Delaware, Kentucky, Maine, Maryland, and Nebraska—also authorize the state itself to create TIFs. In a few states, TIF statutes refer to transit systems or projects, including transit-oriented develop- ment. For example, Illinois’ statute specifies in subsections 65 ILCS 5/11-74.4-3 (n) and (p-1) and (p-2) that, with respect to redevelopment project areas described, “redevelopment plan” means the comprehensive program of the affected municipality for the development of qualifying transit facilities.81 All states require a specific entity to manage the TIF. De- pending on the state, the managing entities may be economic development agencies, housing authorities, or industrial de- velopment boards. Tennessee, for example, authorizes housing authorities to undertake TIFs to promote redevelopment of blighted areas.82 However, in many instances a new entity can be created with a governing board and authority to conduct TIF projects and to raise finance.83 National Association of Realtors has a Tax Increment Financing Report. November 2002. Available at: https://www.nar. realtor/smart_growth.nsf/docfiles/TIFreport.pdf/$FILE/TIFreport. pdf; Redevelopment Association of Indiana. Redevelopment Handbook. 4th Edition 2018. Available at: https://aimindiana.org/ wp- content/uploads/2018/12/RAI-Redevelopment-Handbook.pdf; California Association for Local Economic Development. Primer on California’s New Tax Increment Financing Tools. 2007. Available at: https://www.cacities.org/Resources-Documents/ Policy-Advocacy-Section/Hot-Issues/New-Tax-Increment-Tools/ CALED-TIF-Primer-3-17-FINAL.aspx. 80 American Planning Association. Growing Smart Legisla- tive Guidebook: Model Statutes for Planning and the Man- agement of Change. Available at Growing Smart Legislative Guide- book Online. 2002 Edition by Stuart Meck. Available at: https://www. planning.org/growingsmart/guidebook/. 81 65 ILCS 5/11-74.4-3 (n) and (p-1). Notwithstanding any provi- sion of this Act to the contrary, on and after August 25, 2009 (the effec- tive date of Public Act 96-680), a redevelopment project area may include areas within a one-half mile radius of an existing or proposed Regional Transportation Authority Suburban Transit Access Route (STAR Line) station without a finding that the area is classified as an industrial park conservation area, a blighted area, a conservation area, or a combination thereof, but only if the municipality receives unani- mous consent from the joint review board created to review the pro- posed redevelopment project area. (p-2) Notwithstanding any provi- sion of this Act to the contrary, on and after the effective date of this amendatory Act of the 99th General Assembly, a redevelopment project area may include areas within a transit facility improvement area that has been established pursuant to Section 11-74.4-3.3 without a finding that the area is classified as an industrial park conservation area, a blighted area, a conservation area, or any combination thereof. 82 Tenn. Code Ann. §13-20-202. Powers of housing authority as to blighted areas. 83 Cal. Government Code § 53398.51.1; Colo. Rev. Stat. § 31-25-104; Conn. Gen. Stat. § 32-268; Fla. Stat. § 163.356; Ga. Code Ann. § 36-44-6; Idaho Code § 50-2005; Iowa Code § 403.14; Ky. Rev. Stat. § 154.30-030; Minn. Stat. § 469.174; 7-15-4232, Mont. Code rapidly to corporations increasing by 1,039% from $1.8 million in 1995 to $18.7 million in 1998.78 A. State Enabling Legislation: Key TIF Features Across the States State enabling legislation lays out the basic parameters under which local governments or other eligible entities may use TIF. The TIF statutes of almost all 49 states include key elements within the enabling legislation. The most common provisions address the issues below, many of which are discussed in more detail in following sections: • TIF district composition, consolidation, annexation as well as duration and termination • TIF district determination criteria: blight/urban renewal necessity/economic development • Requirements for a plan and/or consistency with city com- prehensive plans • Public hearing on TIF creation/plan development • TIF management board composition and structure • Calculation and allocation of the tax increment revenue post development • Eligible tax revenues/taxation authority and relationship to other taxation districts • Financing options and time limits • Allowable public costs/use of TIF monies, including for public-private partnerships • Eminent domain use and authority This first section discusses several common provisions ad- dressed across most states. We also include a summary table of state-by-state provisions to better communicate the heterogene- ity visible in statutory frameworks. Many states, cities, counties, government departments, and non-governmental associations have also developed guidebooks for TIF. 79 In 2002, the Ameri- 78 Michael G Walker, Tax Increment Financing in Maine. January 2018 70 Me. L. Rev. 115 at note 103 citing Bureau of Labor Educ., Univ. Of Me., Maine’s Development Dilemma (Winter/Spring 2001) (Citing Mark Breslow & Erica Schwarz, Tax Increment Financing in Maine: Rapid Growth And Substantial Costs, (October 2000)). 79 See, Wisconsin Department of Revenue. 2019 Tax Incre- mental Financing Manual. Available at: https://www. revenue.wi. gov/DOR%20Publications/tif-manual.pdf; Metro Council. Tax increment Financing Local Planning Handbook. 2015. Available at: https://metrocouncil.org/Handbook/ Files/Resources/Fact-Sheet/HOUSING/Tax-Increment-Financing. aspx; City of San Antonio. Tax Increment Financing Program Policy and Implementation Manual. 2006. Available at: https:// www.bgr.org/wp-content/uploads/San_Antonio_TIFManual.pdf; Government Finance Officers Association. An Elected Official’s guide to Tax Increment Financing. 2005. Available at: https://www.gfoa.org/sites/default/files/EOGTIF.pdf; Retail Industry Leaders Association. TIF Primer. Not dated. Available at: https://www.rila.org/sustainability /RetailEnergy ManagementProgram/Documents/TIF%20Primer.pdf;

TCRP LRD 55 13 Table 1 summarizes for each state a selection of the critical elements that TIFs contain, and where TIFs can be used specifi- cally for transit provision this is noted. Two pieces of the state statutory framework warrant addi- tional discussion by entities considering TIF for transit. These include statutory provisions requiring a determination of blight, parameters for TIF spending on infrastructure, and reporting requirements. 1. Blight Determination vs Economic Development Many TIFs can only be created by a declaration of blight and/ or for encouragement of economic development. The require- ment for a blight determination, however, has been changing over time, with some jurisdictions choosing to go strictly down the economic development encouragement route rather than requiring the blight determination as the key first step. There has been considerable criticism of the determination of blight. Geheb for example notes that The approval process often depends on a determination that the TIF district area is “blighted” and that redevelopment cannot be accom- plished through “ordinary operations of private enterprise,” known as the “but-for test.” The “but-for” test is meant to ensure that but for tax increment financing, the project would be economically unfeasible. Local governments’ loose adherence to traditional concepts of blight have caused courts and commentators to argue that the definition needs to be more concrete”.88 Of the 49 states and D.C. that authorize TIF, 32 explicitly de- tail blight as a major factor in inhibiting and aggravating prob- lems. Sixteen states do not use the term blight, and of these Con- necticut, Delaware, Kentucky, Louisiana, Maine, Nevada, New Hampshire, New Jersey, New Mexico, Utah, and Vermont have structured their determination criteria for focus on economic growth inducements. Indiana utilizes the words “stagnant or de- teriorating.” Louisiana uses the words “promote sound growth and development to finance.” Massachusetts uses the words “im- prove the quality of life, the physical facilities and structures.” Michigan uses terms “property value deteri oration.” Nebraska uses the term “economically or socially undesirable” in its Com- munity Development Law for TIF, and within its Nebraska Re- development Act Statute does use the term “ blighted.” Texas does not use the term blight, but includes components that would indicate blight such as slum, deteriorated or deteriorat- ing. And Hawaii does not mention any specific criteria within its statute.89 A review of the state’s statutes shows that in defining blight, the terminology has evolved over time from minimal defini- tions to more expansive definitions, often using traditional stat- utory terms such as substantial, predominance, preponderance, majority, or prevalence. However few statutes give guidance for conducting specific quantitative analysis recommenda- 88 Phillip J.F. Geheb. Tax Increment Financing Bonds as “Debt” Under State Constitutional Debt Limitations. 41 Urb. Law 725, Fall 2009. 89 Bryon Eagon. TIF-For-Tax: Upholding TIF’s Original Purpose and Maximizing Its Use as a Catalyst for Community Economic Development. 2017 Wis. L. Rev. 179. TIFs are authorized to be either site specific or an area, and in some instances these must be contiguous. Georgia, for exam- ple, requires sites or areas to be contiguous, preventing selective parcel-by-parcel inclusion or exclusion from the TIF.84 Eligible tax revenues for TIF include property taxes, sales taxes, site specific fees/taxes, and other taxes including hotel occupancy taxes, convention center taxes, and income taxes. Fourteen states plus the District of Columbia allow non- property taxes to be used.85 Indiana and Louisiana are the only states that authorize the use of sales taxes separately from prop- erty taxes.86 New Jersey also includes increased income taxes in the increment.87 Many states require a formal hearing process to create the TIF itself. Some states require that a plan, sometimes with projects denoted, must be created for the TIF to be set up. Fur- ther, some states require postal notification of affected residents, while others merely require a public hearing. Other require- ments may include, for example, a redevelopment plan to be in place, consistency of plan with local comprehensive long-range plans, specific zoning ordinances, and greenfield allowances. All states set out rules for baseline value assessment within the statute. All states have amended their TIF legislation, in some in- stances many times. Some states have repealed and replaced their legislation altogether. California, for example, in 2014 re- pealed its TIF legislation and established new TIF legislation. Since this date there has not been any legal challenges to the new TIF statute, whereas over 75 cases had been litigated prior to the replacement statutes. Michigan repealed and replaced its TIF laws in January 2019. Ann.; N.J. Ann. Stat. § 52:27D-461; 5-15-1 N.M. Ann. Stat. 1978; Ohio Rev. Code Ann. 1728.01; 11 Okla. Stat. Ann. § 38-107; Or. Rev. Stat. § 457.437; Tax Increment Financing Act, 1989 Pennsylvania HB 2179; Tenn. Code Ann. § 13-20-202; Wyo. Stat. Ann. § 15-9-134. 84 O.C.G.A. § 36-44-3 (13). 85 Arkansas, California, Colorado, Connecticut, Illinois, Indiana, Kentucky, Maine, Michigan, Missouri, New Jersey, Texas, Washington, and West Virginia. 86 La. R.S. § 33:9038.34. Sales tax increment financing; see Indiana P.L. 380 – 1987, Sec. 1 and John Stafford. Sales Tax Increment Financing in Indiana: Putting HB 1144 Into Historical Perspective. Indiana Fiscal Policy Institute, March 27, 2017 Accessed at http://indianafiscal.org/ resources/IFPI%20session%20report%20No.%204%20.pdf. 87 N.J. Stat. § 52:27D-461 “Revenue increment base” means the amount of any eligible revenues, other than the property tax increment, collected in the calendar year immediately preceding the adoption of the plan; § 52:27D-463 b “a statement of the revenues, if any, to be pledged to support bonds of the district, the percentage of such reve- nues to be so pledged, and a certification by the chief financial officer of the municipality of the revenue increment base for each of the pledged revenues other than the property tax revenue base. If the amount of any such revenue base cannot be certified, then the chief financial officer shall estimate the amount and describe the basis for preparing the esti- mate and the manner in which the revenue increment base will be determined after adoption of the plan”; and § 52:27D-469 (b) Eligible revenues “incremental revenues from payroll or wage taxes with respect to activities carried on within the district.”

14 TCRP LRD 55 While some states require that a blight finding be quantified, most states allow qualitative characterizations.92 The courts have also added to broad definitions of blight in deciding cases.93 As an example in a 1961 case from Colorado, a Colorado court held that “blighted area” does not simply mean a “slum area,” but that it also included an area in which “dete- riorated or deteriorating’ structures … constitute[] a social or economic liability.”94 Farwell argued in a 2005 article that at least part of the problem of too-broad definitions of blight is trace- able to liberal interpretations of the term by courts.95 Farwell argues that the effect of such broad statutory definitions and liberal court interpretations is that almost complete discretion is left to local governing bodies to determine what constitutes blight.96 Several authors have argued that a more realistic approach to using TIF should abandon the blight and “but for test” that is necessary to create a TIF and rather use economic develop- ment goals. Much of the criticisms of TIF, within literature, note least one of the factors identified in paragraphs (a) through (o) is pres- ent and all taxing authorities subject to s. 163.387(2)(a) agree, either by interlocal agreement with the agency or by resolution, that the area is blighted. Such agreement or resolution must be limited to a determina- tion that the area is blighted. For purposes of qualifying for the tax cred- its authorized in chapter 220, “blighted area” means an area as defined in this subsection. 92 Alyson Tome. Tax Increment Financing: Public Use or Private Abuse. 90 Minn L. Rev. 213 November 2005. 93 See generally, Jonathan M. Purver. Annotation, What Constitutes “Blighted Area” Within Urban Renewal and Redevelopment Statutes, 45 A.L.R.3d 1096, 1106-10 (1972). 94 Rabinoff v. Dist. Ct. of Denver, 360 P.2d 114 (Colo. 1961) 95 David N. Farwell. A Modest Proposal: Eliminating Blight, Abolish- ing But-For and Putting New Purpose in Wisconsin’s Tax Increment Financing Law. 89 Marq. L. Rev. 407, Winter 2005. 96 Farwell notes “A New Jersey court construed “blighted area” very liberally in order to serve what the court saw as the “beneficent legisla- tive design” of not only slum clearance, but also “urban, suburban, and rural redevelopment … by private enterprise or by public agencies in accordance with approved redevelopment plans.” Here, the court appeared to embrace an expansive definition of blight in [418] order to serve a larger, presumably unstated, legislative intent of general eco- nomic development. Finally, in a more recent case from Ohio, the court noted that “defining a “blighted area’ involves an evaluation of whether the land is being used in the best and most efficient manner in relation- ship to the surrounding area.” Although this language appears nowhere in Ohio’s statutory definition of “blighted area,” the court interpreted the term broadly and held that a surface parking lot could be declared blighted if it “was not the best and most efficient use of the land, which would otherwise be useful and valuable and contribute to the public interest. One commentator has argued that the Ohio statute’s “broad definition [of blight] gives local governments considerable discretion in determining whether the subject area is blighted.” Indeed, the Ohio Court of Appeals in the above cited case held “abuse of discretion” to be the proper legal standard for reviewing the blight determinations of local legislative bodies. Another commentator, remarking on Missouri’s TIF statute, has argued that the state’s “definition of “blight’ is too broad to provide any significant restriction on the discretion of private devel- opers and municipalities in choosing redevelopment sites.” The level of discretion allowed local legislative bodies thus fuels controversy over defining blight. tions. Instead, most statutes require various subjective criteria to be met.90 For example, blight is defined relatively expansively within Florida’s TIF statute, with blighted areas characterized by a substantial number of slum or deteriorating structures, pre- dominance of inadequate street layout, or unsafe conditions, and a requirement of two out of a list of sixteen must be met.91 90 See e.g., Ark. Code Ann. 29.47.460 (d)(2)(A) and (B); Blighted area based on excessive vacant land with structures abandoned or vacant, substandard, area that can be substantially improved based on property value in area; Colo. Rev. Stat. CRS §31-25-102 (1) Slum, blighted areas, economic and social liability, impairs or arrests sound growth, retards housing provision, aggravates traffic problems, impairs elimination of traffic hazards and improvement of traffic facilities, dete- riorated or deteriorating structures, unsanitary/unsafe, deterioration of site, unusual topography, defective unusual conditions of title, unsafe buildings, environmental contamination, health safety welfare factors requiring high levels of municipal services and underutilization/ vacancy of sites buildings; Wyo. Stat. Ann. 15-9-103 (a) (iii) “Blighted area” means an area which by reason of the presence of a substantial number of slums, deteriorated or deteriorating structures, predomi- nance of defective or inadequate street layout, faulty lot layout in rela- tion to size, adequacy, accessibility or usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessments, delinquency exceeding the fair value of the land, defective or unusual conditions of title, or the exis- tence of conditions which endanger life or property by fire and other causes, or any combination of those factors, substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations or constitutes an economic or social liability and is a menace to the public health, safety, morals or welfare in its pres- ent condition and use. However, if the blighted area consists of open land, the conditions contained in W.S. 15-9-110(b) apply and any disas- ter area referred to in W.S. 15-9-112 constitutes a “blighted area.” 91 Fla Stat. Ann. 163.340 (8) “Blighted area” means an area in which there are a substantial number of deteriorated or deteriorating structures; in which conditions, as indicated by government-main- tained statistics or other studies, endanger life or property or are leading to economic distress; and in which two or more of the following factors are present: (a) Predominance of defective or inadequate street layout, parking facilities, roadways, bridges, or public transportation facilities. (b) Aggregate assessed values of real property in the area for ad valorem tax purposes have failed to show any appreciable increase over the 5 years prior to the finding of such conditions. (c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness. (d) Unsanitary or unsafe conditions. (e) Deterioration of site or other improvements. (f) Inadequate and outdated building density patterns. (g) Falling lease rates per square foot of office, commercial, or industrial space compared to the remainder of the county or municipality. (h) Tax or special assessment delinquency exceeding the fair value of the land. (i) residential and commercial vacancy rates higher in the area than in the remainder of the county or municipality. (j) Incidence of crime in the area higher than in the remainder of the county or municipality. (k) Fire and emergency medical service calls to the area proportion- ately higher than in the remainder of the county or municipality. (l) A greater number of violations of the Florida Building Code in the area than the number of violations recorded in the remainder of the county or municipality. (m) Diversity of ownership or defective or unusual conditions of title which prevent the free alienability of land within the deteriorated or hazardous area. (n) Governmentally owned property with adverse environmental conditions caused by a public or private entity. (o) A substantial number or percentage of properties damaged by sinkhole activity which have not been adequately repaired or stabi- lized. However, the term “blighted area” also means any area in which at

TCRP LRD 55 15 George Lefcoe noted in 2011 that Indiana’s economic develop- ment agencies were not required to calculate the amount of in- crement that they deflected annually from other taxing entities.104 Some states require the redevelopment or economic development agencies to file an annual report.105 Florida requires their redevel- opment agencies to file an annual audit with their governing bod- ies and the local government that created them and publish notice of the report within media.106 However the format, methodology, 104 Ibid. 105 E.g., Massachusetts state law provides: Each municipality implementing an approved development program shall provide an annual status report to the EACC describing all significant activities, projects and events during the preceding year in furtherance of the program, including but not limited to, a list of properties acquired by the municipality by eminent domain during the preceding year, an update on the costs and financing of the program, including the status of tax increment financing for the program, and a schedule for the pro- gram containing a description of anticipated events during each of the next five years, and for each five-year period thereafter. Such reports shall be submitted on or before each anniversary of the development program’s approval by the EACC. In addition, the EACC may, from time to time, request other information from municipalities implementing approved development pro- grams, and such municipalities shall respond to such inquiries as directed by the EACC. 402 MASS. CODE REGS. 3.12 (2019); Minnesota state law provides: (a) The state auditor shall develop a uniform system of account- ing and financial reporting for tax increment financing districts. The system of accounting and financial reporting shall, as nearly as possible: (1) provide for full disclosure of the sources and uses of tax increments of the district; (2) permit comparison and reconciliation with the affected local government’s accounts and financial reports; (3) permit auditing of the funds expended on behalf of a district, including a single district that is part of a multidistrict project or that is funded in part or whole through the use of a development account funded with tax increments from other districts or with other public money; (4) be consis- tent with generally accepted accounting principles. MINN. STAT. § 469.175(6)(a) (2019). 106 FLA. STAT. ANN. § 163.371 By January 1, 2020, each community redevelopment agency shall publish on its website digital maps that depict the geographic boundaries and total acreage of the community redevel- opment agency. If any change is made to the boundaries or total acreage, the agency shall post updated map files on its website within 60 days after the date such change takes effect. (2) Beginning March 31, 2020, and not later than March 31 of each year thereafter, a community redevelopment agency shall file an annual report with the county or municipality that created the agency and publish the report on the agency’s website. The report must include the following information: (a) The most recent com- plete audit report of the redevelopment trust fund as required in s. 163.387(8). If the audit report for the previous year is not available by March 31, a community redevelopment agency shall publish the audit report on its website within 45 days after completion. (b) The perfor- mance data for each plan authorized, administered, or overseen by the community redevelopment agency as of December 31 of the reporting year, including the: 1. Total number of projects started and completed and the estimated cost for each project. 2. Total expenditures from the re development trust fund. 3. Original assessed real property values within the community redevelopment agency’s area of authority as of the day the agency was created. 4. Total assessed real property values of prop- that because determining blight97 is easy for a local jurisdiction to do, it makes better sense to use an argument that economic devel opment is needed and to reduce “blight” determination that has often occurred to what are non-blighted areas, for ex- ample, greenfield spaces have been determined as “blighted” to authorize big box retail development, and in other instanc- es shopping malls and other retail developments98 are termed blighted to lure a key retailer or logistics provider to a retail park or mall.99 Authors have argued that modern TIF statutes do not reflect TIF’s original focus—urban renewal of blight—and point to TIF’s use by growing suburbs to lure jobs and residents away from inner-city neighborhoods to areas with more finan cial stability.100 This move away from explicit blight requirements has led some to identify a trend in states to “dispense with the formal but somewhat meaningless blight determination in favor of express rec- ognition that the process is really just about economic development.101 2. Infrastructure Spending Requirements Another criticism is that TIFs restrict spending to traditional infrastructure, roads, sewers, sidewalks, facilities, at the expense of other public services, such as social services, direct education, parks, public transportation, and public housing.102 3. TIF Reporting and Accounting States vary in terms of the reporting and financial require- ments placed on TIF, and some have noted that such provisions are “for the most part, tepid and unenforced.”103 For example, 97 The American Planning Association defines blight as having evolved from “grotesque living conditions or deteriorated industrial areas” to “under-performing or obsolete land uses or buildings that exist where the rational private investment cannot overcome market forces.” American Planning Association Policy Guide on Public Redevelopment 3 (2004), http://www.planning.org/ policy/guides/ pdf/publicredevelopment.pdf. 98 Joseph Blocher & Jonathan Q. Morgan, Univ. of N.C. at Chapel Hill Sch. of Gov’t, Questions About Tax Increment Financing in North Carolina, 5 Community and Econ. Dev. Bull. 1, 3 (2008), http:// sogpubs.unc.edu/electronicversions/pdfs/cedb5.pdf. 99 See, e.g., Josh Reinert, Comment, Tax Increment Financing in Missouri: Is it Time for Blight and But-For To Go?, 45 St. Louis U. L.J. 1019, 1020 (2001). 100 See George Lefcoe. Competing for the Next Hundred Million Americans: The Uses and Abuses of Tax Increment Financing, 43 Urb. Law. 427, 438 (2011). In a specific example, two outdoor equipment providers, Bass Pro Shops and Cabela’s, were offered incentives to place large retail stores in two towns just outside of Baton Rouge, Louisiana. See, Kenneth M. Murchison, Louisiana: From the Big Easy to the Suburbs, TIF and its Dangers, in Tax Increment Financing 55 (David Callies & W. Andrew Gowder, Jr. eds., 2012) “The suburban towns of Denham Springs and Gonzales lured the retail stores by paying for the costs of building construction and giving the corporations the option to purchase these facilities for “nominal” fees.” Id. at 107. 101 H. Lawrence Hoyt, What’s the “TIF” All About?, in Tax Incre- ment Financing. 102 Bryon Eagon. TIF-For-Tax: Upholding TIF’s Original Purpose and Maximizing Its Use as a Catalyst for Community Economic Develop- ment. 2017 Wis. L. Rev. 179. 103 George Lefcoe. Competing for the Next Hundred Million Ameri- cans: The Uses and Abuses of Tax Increment Financing. 43 Urb Law. 427 Fall 2010/Winter 2011.

16 TCRP LRD 55 and Process. Within this document, the TIF goals policy guid- ance noted that Section 3.4 (I) it was reserving sufficient increment for public infrastructure in both TIF project plans and TIF underwriting. The City has made extensive use of increment to address infrastructure needs that exist regardless of specific projects. Those needs are outlined in the TID Project Plan and the Capital Improvements Plan.117 The city also updated its Loan Underwriting Policy for TIFs, and continues to require a “but for” standard to be demon- strated by each project, to ensure that the project without as- sistance could not occur, and requires each project must dem- onstrate a probability of success.118 117 City of Madison. TIF Goals, Objectives and Policies (February 25, 2014 ) available at: https://www.cityofmadison.com/ dpced/economicdevelopment/documents/TIF%20Goals%20Objec- tives%20and%20Process%20-%20ADOPTED.pdf (last visited Septem- ber 23, 2019). 118 City of Madison. TIF Loan Underwriting Policy. Febru- ary 25, 2014 available at https://www.cityofmadison.com/dpced/ economicdevelopment/documents/TIF%20Underwriting%20 Policy%20-%20ADOPTED.pdf (last visited September 23, 2019). analysis requirements, and contents of these TIF reports are left to agency discretion.107 California was heavily criticized for its re- porting practices. A Los Angeles Times study in 2010 found that California cities were not adhering to state auditing requirements imposed upon municipalities and that the state comptroller’s of- fice had no systematic review procedures.108 Approximately one quarter of municipal redevelopment agencies they found failed to file their annual reports on time.109 The investigative reporters noted that “there is little to ensure the information [from redevel- opment agencies] is correct.”110 Changes enacted in TIF statutes over time, however, reveal a move towards more in-depth reporting requirements. Illinois TIF Agencies for example, must commission the preparation of annual district financial reports prepared by outside consul- tants (based on unaudited information the city supplies), and make available project redevelopment agreement information arranged by TIF district narratives and goals.111 Kansas requires its secretary of the Department of Commerce to approve de- tailed feasibility and market analysis for large-scale TIF projects for entertainment and tourism that would use bonds secured by state sales taxes.112 The financial feasibility study needs to show that it will remain profitable past repayment.113 Wisconsin also requires that each city sponsored TIF prepares an annual report describing the status of each existing tax incremental district, in- cluding expenditures and revenues.”114 Lefcoe, in reviewing the cities of Milwaukee and Madison,115 noted that “trans parency has made it possible for the Milwaukee city council to engage in serious public debate over how TIF funds should be used.”116 Madison, Wisconsin in 2014 issued new TIF Goals, Objectives, erty within the boundaries of the community redevelopment agency as of January 1 of the reporting year. 5. Total amount expended for affordable housing for low-income and middle-income residents. (c) A summary indicating to what extent, if any, the community redevelopment agency has achieved the goals set out in its community redevelopment plan. 107 Lefcoe supra note 103. 108 Jessica Garrison & Jeff Gottlieb, Bad City Finances Often Go Unflagged, L.A. TIMES, Nov. 12, 2010, at 16. 109 Id. 110 Id., and noted in Lefcoe supra note 103. 111 See 65 ILL. COMP. STAT. 5/11-74.4-5(d)(9), 5/11-74.4-7 (2010). For information on Chicago’s TIF districts, including redevelopment agreements, maps, annual and financial reports, balances and funding sources and proposed TIF districts see https://www.chicago.gov/city/ en/depts/dcd/provdrs/tif.html (last visited September 23, 2019). 112 Lefcoe, supra note 103. 113 Kansas Secretary of Commerce. Guidance to STAR Bond Appli- cants. December 2012. See https://www.kansascommerce.gov/wp-con- tent/uploads/2018/12/STAR-overview.pdf (last visited September 23, 2019). 114 WIS. STAT. § 66.1105(6m)(c) (2010). 115 Lefcoe, supra note 103. 116 Lefcoe, supra note 103. Lefcoe was citing from Tom Daykin, Milwaukee Might Tap TIF Money for Other Street Projects, JOURNAL SENTINEL (Milwaukee, Wis.), Jan. 22, 2010, available at http://www. jsonline.com/blogs/business/82297032.html (“Milwaukee officials are moving forward with a plan that would tap tax incremental financing districts to pay for street repairs outside those districts.”).

TCRP LRD 55 17 continued Table 1. Key Statutory Provisions Governing TIF Applications: State by State Summary State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Alabama Other Municipal Financing AL Code §§ 11- 99-1 - 11 B    30 §11-99-2 (9) (a - j) - Capital, financing, real property assembly, site prep, admin and organizational costs, professional services, and relocation Alaska Tax Increment Districts AK Code §29.47.390 B    §29.47.460 (a) acquisition, construction, rehabilitation, or development of public improvements Arkansas ARK. Const. Amend. 78, §1(a), (b) Tax Increment Financing District Law Ark. Code Ann. §14-168-301 -304 B     25 § 14-168 (10) (A) (B) - capital, financing, real property assembly, prof. services, admin, relocation, organization, environment California Cal Gov Code Tit. 5, Div.2, Pt.1, Ch. 2.99 Enhanced Infrastructure Finance Districts and Second Neighborhood Infill Finance and Transit Improvements Act; (NIFTI-2); and Cal Gov Code Tit. 5, Div. 2, Pt. 1, Ch. 2.8 Infrastructure Financing Districts E     53398.75.7 (b) Second Neighborhood Infill Finance and Transit Improvements Act; Adoption of infrastructure financing plan; The infrastructure financing plan requires that a (B) first 40% is used for affordable and low cost housing, and then under(E) at least 10% of the total funds received by the district pursuant to this section be used for investments in the capital costs of parks, urban forestry, or permanent greening improvements along boulevards, streets, or other public areas within a district, or active transportation capital projects that qualify under the Active Transportation Program (Chapter 8 (commencing with Section 2380) of Division 3 of the Streets and Highways Code), including pedestrian or bicycle facilities or supportive infrastructure, including connectivity to transit stations.

18 TCRP LRD 55 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er California (continued) 53398.75.7 (c ) remaining funds can be used for: (2) Transit capital projects, including transit stations and programs supporting transit ridership, including waterborne transit. (3) Transit-oriented development projects, including affordable housing and infrastructure at or near transit stations or connecting those developments to transit stations. For Infrastructure Financing Districts §53395..3 (a0 finance, land acquisition and sit prep, construction, and rehabilitation, administrative, financing and operational expenses. (b) The district shall finance only public capital facilities of communitywide significance, which provide significant benefits to an area larger than the area of the district, including, but not limited to, all of the following: (1) Highways, interchanges, ramps and bridges, arterial streets, parking facilities, and transit facilities. Colorado §§ 31-25-101 - 31.25-116 Urban Renewal law B      25 §31-25-112 (1) (a - f) Construction, rehabilitation, planning, for streets, roads, parkways, alleys, sidewalks, and other public ways Connecticut Credit, Jobs, Capital Investment and Tax Increment Financing Programs Conn Gen Stat § § 32- 285 - 299 E       25 § 32-285 (i) Capital financing, administrative expenses, redevelopment plan §32-285 (c) an analysis of necessary infrastructure development to support the project. Delaware Municipal Tax Increment Financing Act 22 Del. C § § 1701-1716 E    30 § 1705 (1-11) Land and property acquisition, plans, relocation, necessary improvements incl. streets/ roads to/from/within TIF district, parking. Florida Community Redevelopment Act of 1969 Fla. Stat. §§ 163.300 - 463 B    40 § 163.740 (2) real property acquisition, … installation, construction, reconstruction of streets §163.400 latitude to other agencies to be involved in the redevelopment relegated activities

TCRP LRD 55 19 continued Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Georgia Redevelopment Powers Law O.C.G.A Title 36 Chapter 44 B    30 §36-44-3 (5) capital costs, financing, planning, professional services, relocation costs, organizational, real property assembly, construction, reconstruction, repair, demolition, alteration, or expansion of structures, equipment, and facilities for mass transit Deteriorating or inadequate parking, roadways, bridges, pedestrian access, or public transportation or transit facilities incapable of handling the volume of traffic into or through the area, at present or after redevelopment; Hawaii Tax Increment Financing Act HRS Div. 1, Tit. 6, Submit. 1, Ch. 46   30 §46-102 capital, financing, professional service, administration, relocation, organizational costs Idaho Title 50 Municipal Corporations, Chapter 20 Urban Renewal Law; Chapter 29 Local Development Act §50-2901 Idaho Urban Renewal Law of 1965 Local Economic Development Act B E   10 (plan) 20 for other costs § 50-2007 plans, capital costs, relocation, administrative and organizational costs

20 TCRP LRD 55 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Illinois Tax Increment Allocation Redevelopment Act 65 ILCS 5/11-747. 4-8 B       35 §(q-1) For redevelopment project areas created pursuant to § (p-1), redevelopment project costs are limited to those costs in paragraph (q) that are related to the existing or proposed Regional Transportation Authority Suburban Transit Access Route (STAR Line) station. (q-2) For a redevelopment project area located within a transit facility improvement area established pursuant to §11-74.4-3.3, redevelopment project costs mean costs described in §(q) that are related to the construction, reconstruction, rehabilitation, remodeling, or repair of any existing or proposed transit facility.” Indiana Economic Development Project Districts Burns Ind. Code Ann. 36- 7-26 B, E   20 §36-7-26-24 (c) (1) road improvements, property acquisition costs, site prep including demolition and improvements/alterations to enhance commercial viability. §1(3) [IC 36-7-26-1(3)] real property acquisition for city road, interchange, right- of-way improvements and demolition Iowa Urban Renewal Law Iowa Code Title IX, Submit. 4, Ch. 403 B   20 §403.6 plans, capital, administrative, relocation and operational costs. §403.6 streets, roads, … or other facilities for or in connection with urban renewal project Kentucky Tax Increment Financing KRS §§ 154.30- 010 -090 E and B       30 §154.30-070 - acquisition, installation, construction, reconstruction, planning and design and includes… sidewalks, promenades, pedways, roads, street lighting, parking, transportation facilities, public landings, portions of parking structures that serve as platforms. § 154.30-010 (3) curbs, sidewalks, pedways, roads, parking, transportation facilities Louisiana Tax Increment Development Act RS 8001 E    30 §8009 capital costs, planning, mapping, relocation costs, administrative costs. §8002 (1) transportation, mass transportation

TCRP LRD 55 21 continued Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Maine State Tax Increment Financing Districts & Municipal Development Districts 30-A M.R.S. § 5241 E       State 10, City 30 §5225 1 (A) (1) (a) (i) capital costs - including TOD costs for transit vehicles such as buses, ferries, vans, rail conveyances and related equipment; bus shelters and other transit- related structures; benches, signs and other transit-related infrastructure; nonresidential commercial portions of TOD projects. Financing costs, real property assembly costs, professional services, administrative, relocation, organization costs and for TOD, ongoing costs of adding to an existing transit system or creating a new transit service and limited strictly to transit operator salaries, transit vehicle fuel and transit vehicle parts replacements Maryland Tax Increment Financing Act §§ 12-201 - 12- 213 (previously MD An. Code 1957 art 41 §14- 203) B     10 §12-207 property acquisition, administrative, organizational, professional services and relocation costs.; 12-207 (b) Sustainable communities (1) § 12-203 of this subtitle (2) (a) (ii) environmental remediation, demolition, site prep (iv) highways or transit service defined in § 7-101 of Transportation Article Massachusetts District Improvement Financing ALM GL ch. 40Q § 1 E   30 Administrative, capital, discretionary and financing costs

22 TCRP LRD 55 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Michigan Recodified Tax Increment Finance Act MCLS ch. 125, Recodified Tax Increment Financing Act Pt 2 Downtown Development Authorities §§ 125.4201- 4230, Pt 3 TIF Authorities §§ 125. 4301-4329, Pt 4 Local Development Finance Authorities §§ 125.4401-4420 Pt 2, B Pt 3 and 4 E      Pt 2 – no yrs. set Pt 3 – 30 yrs. Pt 4 – 15 yrs. Pt 4 Local Development Finance Authorities §§ 125.4301 (u) Public facility means… “transit-oriented development, transit-oriented facility, and other similar facilities and necessary easements of these facilities designed and dedicated to use by the public generally or used by a public agency”; (bb) “Transit-oriented development” means infrastructure improvements that are located within 1/2 mile of a transit station or transit-oriented facility that promotes transit ridership or passenger rail use as determined by the board and approved by the municipality in which it is located. (cc) “Transit-oriented facility” means a facility that houses a transit station in a manner that promotes transit ridership or passenger rail use. 125.4307 The Board May (c) Plan and propose the construction, renovation, repair, remodeling, rehabilitation, restoration, preservation, or reconstruction of a public facility, an existing building, or a multiple family dwelling unit which may be necessary or appropriate to the execution of a plan which, in the opinion of the board, aids in the revitalization and growth of the development area. (d) Plan, propose, and implement an improvement to a public facility within the development area to comply with the barrier free design requirements of the state construction code promulgated under the Stille-DeRossett-Hale single state construction code act, 1972 PA 230, MCL 125.1501 to 125.1531. Minnesota Tax Increment Financing Act Minn. Stat §§ 469 .174-1799 B   25 §469.175- land acquisition, capital costs, planning, construction, administrative and operational expenses, relocation costs Mississippi Tax Increment Financing Act Mis. Code Ann. §§21-45.1 - 21 B    30 §21-45-19 real property acquisition, site prep, construction, rehabilitation, planning, service fees, debt issuance and service

TCRP LRD 55 23 continued Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Missouri Real Property Tax Increment Allocation Redevelopment Act §§ 99.800 - 865 B      23 §99.800 (15) professional services, planning, property assembly, construction, finance, and relocation costs. Montana Urban Renewal law §§7-15-4283, MCA B   25 §7-15-42858 acquisition and assembly of property, construction, repair, rehabilitation, installation, reconstruction, operational and administrative costs, relocation costs. rail lines, rail spurs, bridges authorized by Title 7, §§ 12 (41-45); Title 7, §§13 (42 -43); Title 7, §§14, (47) Nebraska Nebraska Redevelopment Act R.R.S. Neb. Ch. §§58-501 - 533 Community Development Law R.R.S §§ Neb 18-2101 - 2154 B    20 §18-2103 (28) property assembly and site prep, construction, professional services, administrative, financing, organizational and bond and relocation costs §18-2103 (28) install, construct/reconstruct streets, sidewalks/ moving sidewalks bus stop shelters, lighting, benches or other similar furniture, trash receptacles, shelters, skywalks and pedestrian/vehicular over/underpasses Nevada Tax Increment Areas Nev. Rev. Stat. Ann. Title 22, Ch. §§278C .010 278C.310    30 §278C.105 “Rail project” means any railroad, railroad tracks, rail spurs and any structures or facilities necessary for freight rail service provided by a regional transportation commission pursuant to NRS 277A.283, including, without limitation, equipment, terminals, stations, platforms and other facilities necessary, useful or desirable for such a project and all property, easements, rights-of- way and other rights or interests incidental to the project.” New Hampshire Municipal Economic Development and Revitalization Districts RSA §§162-K- 1 - 15 E   30 §163-K.6 I. capital improvements, plans, relocation costs, property acquisition, construction Install lighting systems, street signs and street furniture, landscaping of street and public property

24 TCRP LRD 55 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er New Jersey Revenue Allocation District Financing Act N.J. Stat. §§52:27D-459 - 488 B     35 52:27D-461 Land acquisition, site prep, relocation construction, reconstruction, professional services; organization, administrative, operating expenses of the district §52:27D-461; the demolition, clearance, removal, relocation, renovation, alteration, (re)construction, alteration or repair of … mass transit facility, service or other structure, infrastructure or improvement necessary to effectuate district plan New Mexico Tax Increment for Development Act N.M Stat. Ann §§ 5-15-1 - 28 E   25 §5-15-12 A. Property acquisition, planning, design, inspection, maintenance, operation or repair of public infrastructure, administrative services and service costs New York Municipal Redevelopment Law NY CLS Gen Mun §§970- o - -r B    §970-f (j) real property acquisition, site prep, relocation costs, planning operational, organizational and service costs North Carolina Local Development Act of 1925 N.C. Gen. Stat. §§158-1 -7.4 B &E    158-7.1 (b) Real property acquisition, site prep, planning and service, construction, rehab, and relocation costs North Dakota Urban Renewal Law N.D. Cent. Code, §§ 40- 58-20 B    25 §40-58-20 (8) real property acquisition site prep, construction, planning, professional service and relocation costs, Ohio Community Redevelopment Corporations ORC Ann. §§ 1728.01 - 13 B    20 §1728.01 (G) land acquisition, site prep, professional services, administrative and operational costs Oklahoma Urban Renewal 11 Okl. St §§ 38-101- 123 B   30 § 38-108. 9. land acquisition, site prep, construction, repair/rehab, planning, administrative relocation and operational costs. Oregon Tax Increment Financing of Urban Renewal Indebtedness ORS §§ 457.010 - 030 B   §457.170 Land acquisition, site prep, construction, building repair and rehabilitation, relocation costs, planning,

TCRP LRD 55 25 continued Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Pennsylvania Tax Increment Financing Act 53 P.S. §§ 6930.1 -13 64 Pa. C.S. §§ 1551 - 1558   20 § 6930.3. Real property assembly and acquisition, costs, site prep, construction, financing, relocation, professional services, administrative and organizational costs Rhode Island Municipal Tax Increment Financing Act R.I. Gen. Laws § § 45-33.2-1 - 2-29 B   25 §45-33.2-5 Property acquisition and site prep, plans, relocation costs, construction, organization and service costs. (13) To grant or loan any project revenues, bond proceeds to an … governmental or quasi-governmental entity in order to finance the cost of any portion of a project authorized under this chapter, including, cost of acquiring land , constructing rehabilitating, equipping … transit-oriented development, … within project area or within a tax increment district in accordance with a district master plan, or to loan bond or note proceeds in order to refinance any loans South Carolina Tax Increment Financing Law S.C. Code Ann. §§ 31-6-10 - 31- 6-120 Tax Increment Financing Act for Counties S.C. Code Ann. §§ 31-7-10 - 130 B   30 §31-6-30 (8) planning and professional service, property assembly, site prep, construction and long-term maintenance, financing and relocation costs South Dakota Tax Increment Districts S.D. Codified Laws §§ 11-9-1 - -48 B   20 §11-9-2 (2) planning, land acquisition. §11-2-15 capital, finance, construction and site prep, real property assembly, site prep professional service, admin, organizational, and relocation costs Tennessee Redevelopment Tenn. Code Ann. §§ 13-20- 201 - -217 B    §13-20-12 planning, real property acquisition, site prep, construction, or reconstruction of streets, … and other improvements necessary for carrying out the objectives of the urban renewal project

26 TCRP LRD 55 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Texas Tax Increment Financing Act Tex. Tax Code §311.001 – 311.021 E & B    20 §311.002 (1) Project costs include land acquisition and site prep, financing costs, professional services, administrative, organizational and relocation costs, costs of school and other educational buildings. §311.01005. Costs Associated with Transportation and Transit (1) BRT incl. fixed guideway, high occupancy vehicle lane, bus way, or bus lane; transit center or station maintenance facility; and other real property associated with BRT operation. (2) Rail transportation passenger rail facility, including: tracks; rail line; depot; maintenance facility; real property associated with passenger rail operation. §311.010(b) a governing body may dedicate, pledge, or provide for the use of revenue in the tax increment fund to pay the costs of acquiring land, development rights or conservation easement in land (the land), located outside the reinvestment zone, if: (1) the zone is or will be served by a rail transportation project or BRT; (2) land is acquired for purpose of preserving in natural or undeveloped condition; and (3) located in county of zone location. Utah Tax Credit Incentives for Economic Development Economic Development Tax Increment Financing Utah Code Ann. §§ 63N-2- 101 - -109 E    §§ 63N-2-108 (a) real property acquisition, and (b) for another economic development purpose related to the new commercial project Vermont Statewide Tax Increment Financing 24 V.S.A. § § 1891 - 1902 24 V.S.A. § § 1903-1904 E    10 §1903 (2) and (6), land acquisition, site prep, construction, rehabilitation, service, operational and administrative costs

TCRP LRD 55 27 Table 1. Continued State Name & Code Number TIF District Qualifying Criteria B-Blight, E-Eco. Development Authorized Agencies Eligible Tax Revenues Max Length Eligible Costs Transit costs specifiedC ity C ou nt y Tr an sp or t O th er Pr op er ty Sa le s O th er Virginia VA Code Ann, § § 58.1-3245 - 3245.5 B     §58.1-3245 “Development project cost” has the same meaning as the term “cost” in the Public Finance Act (§ 15.2-2600 et seq.) land acquisition, site preparation, construction, administrative, organizational, professional services and relocation costs Washington Local Infrastructure Financing Tool Program Rev. Code Wash. (ARCW) § § 39.102.010 - -905. E & B     30 §39.104.020 (17) Design, planning, land acquisition, site prep, administrative, operational and organizational costs West Virginia The West Virginia Tax Increment Financing Act §§7-11B-1 7-30 E    30 §7-11B-3 Land acquisition and site preparation, planning, relocation costs, construction of capital improvements, administrative and operational costs. Wisconsin Tax Increment Law Wis. Stat §§ 66- 1105 - 1113 B   23-37 yrs. depend on date of creation §66.1105 (f) 1. Costs in a project plan, construction, land acquisition and real property site assembly, site prep, professional services, financing, administration, organizational and relocation costs Wyoming Wyoming Urban Renewal Code Wyo. Stat. Title 15, Chap 9 §§ 15-9-101 -137 B   25 §15-9-103 (xix) “Urban renewal project” land acquisition and real property assembly, site prep, rehabilitation, conservation, installation, construction or reconstruction of streets, utilities, parks, playgrounds and other improvements necessary for carrying urban renewal objectives in accordance with the urban renewal plan

28 TCRP LRD 55 B. Analysis of TIF Case Law Since TIF was first introduced in California in 1952, a sub- stantial body of case law has emerged surrounding TIFs. Major issues litigated have included: • Constitutionality of the TIF statute or district created o Standing o Determination of blight/ slums/ urban renewal necessity o TIF district composition, consolidation, duration, and termination o Authority to annex areas for TIF districts o Consistency of urban renewal plans with city general plans and amendment(s) • Taxation authority and relationship to other taxation districts • Determination of property value o Increment revenue calculation o Allocation of the ‘tax increment’ post development • Allowable Costs o Use of TIF monies for public private partnerships o Use of TIF monies for maintenance and other non- capital expenditures • Eminent domain use and authority • Interplay with affordable housing development Reviewing major thematic legal areas that have been legislat- ed across the United States, it is clear that tax increment finance is widely used, complex in structure,119 and often contentious. Only a few cases have involved transit per se, and of these none could be found that touch on the subject matter of TIF for non- capital expenditures. 1. Constitutionality of the TIF Statute or District Created This review found multiple cases regarding this area, and case law stretches back to the first TIFs through more recently. In many instances, after seminal decisions have been handed down, state legislatures have amended, and in a few instances, completely reworked their TIF statutes. In City of Parker v. State,120 Bay County argued that the pro- posed tax-increment-financed bonds violate the referendum requirement of article VII, section 12 of the Florida Constitu- tion. The Florida Supreme Court concluded that the proposed bonds do not violate article VII, section 12. The court noted that in State v. Miami Beach Redevelopment Agency,121 “this Court held that it was permissible for a local government to use the 119 For example, in Univ. of Idaho Found., Inc. v. Civic Partners, Inc. (In re Univ. Place/Idaho Water Ctr. Project, 146 Idaho 527) the TIF structure utilized a complexity of local jurisdiction districts, the univer- sity, and private partners private to create this new development. In another case, bonds that were issued in anticipation of a TIF district were assessed for distribution within contentious divorce proceedings (Crider v. Crider 15 N.E.3d 1042*; 2014 Ind. App. LEXIS 416). 120 992 So. 2d 171 *; 2008 Fla. LEXIS 1613 **; 33 Fla. L. Weekly S 671. 121 392 So. 2d 875 (Fla. 1980). tax increment as one of the sources of debt service on outstand- ing bonds where the taxing power had been disclaimed and no lien could attach until the funds were deposited into the trust account. In other words, we held that tax increment financing does not run afoul of the referendum requirement of article VII, section 12 so long as ad valorem taxing power is not pledged. In so holding, this court stated the following: [T]here is nothing in the constitution to prevent a county or city from using ad valorem tax revenues where they are required to compute and set aside a prescribed amount, when available, for a discreet [sic] purpose. The purpose of the constitutional limitation is unaffected by the legal commitment; the taxing power of the governmental units is unimpaired. What is critical to the constitutionality  [**18] of the bonds is that, after the sale of bonds, a bondholder would have no right, if the redevelopment trust fund were insufficient to meet the bond obligations and the available resources of the county or city were insufficient to allow for the promised contributions, to compel by judicial action the levy of ad valorem taxation. Under the statute authorizing this bond financing the governing bodies are not obliged nor can they be compelled to levy any ad valorem taxes in any year. The only obligation is to appropriate a sum equal to any tax increment generated in a particular year from the ordinary, general levy of ad valorem taxes otherwise made in the city and county that year. Issu- ance of these bonds without approval of the voters  [*180]  of Dade County and the City of Miami Beach, consequently, does not trans- gress article VII, section 12. The court noted that: In the present case, the proposed bonds conform to the tax increment financing mechanism we approved in Miami Beach. Parker’s bond ordinance provides that no bondholder “shall [20] ever have the right to compel the exercise of the ad valorem taxing power of the State, Bay County, or any other governmental entity.”122 The bond ordinance also explains that the bonds are “payable solely from and secured by a lien upon and pledge of the Pledged Funds.” Thus, Parker’s proposed bonds do not pledge the taxing power of any government entity. The bondholders have no right, if the trust fund were insufficient to meet the bond obligations, to compel the levy of ad valorem taxation. Con- sequently, the proposed tax-increment-financed bonds are constitu- tional without a referendum. In Metropolitan Development & Housing Agency v. Leech,123 the Supreme Court of Tennessee reviewed a Housing author- ity’s request for declaratory judgement to determine the con- stitutionality of amendments made in 1978 by the state legisla- ture to the housing authorities’ law. The declaratory judgment action questioned the constitutionality of amendments to the Housing Authorities Law that authorized tax increment financ- ing of urban renewal projects. The supreme court affirmed the trial court’s judgment upholding the amendments. The supreme court rejected the claim that the amendments, Section 13-801 et seq., violated Tenn. Const. art. II, Section 29, by requiring that the county appropriate funds to a municipal body. The court ruled that the upgrading of blighted urban areas was not only a municipal purpose, but was the proper concern of the county and the state. The state was allowed to direct a county to expend 122 Ordinance 07-313, art. IV, § 4.01. 123 591 S.W.2d 427 *; 1979 Tenn. LEXIS 524.

TCRP LRD 55 29 The court also reviewed appellant’s argument that the uses anticipated for the PILOTs violate the Constitution. The court noted that “Even if one assumes that PILOTs are tax revenues, art. X, § 3 requires that taxes collected be expended for public purposes; beyond that limitation, art. X, § 3 does not control the distribution or allocation to which tax receipts may be put.” The supreme court upheld the constitutionality of the Act. The court held that Mo. Const. art. VI, § 26(b) did not apply to require voter approval of the use of the bonds because the PILOTs were not taxes; the PILOTs were paid into a special allo- cation fund to secure the bonds and were used to finance special purpose improvements. Standing In Sherman v. City of Atlanta, 129 the Supreme Court of Georgia held that because appellants lacked standing to become parties in the trial court, they also lacked standing to appeal the trial court’s judgment. At the bond validation hearing, the city challenged appellants’ standing to become parties and raised objections in the case. The appellants admitted no competent evidence to show they were Georgia citizens or city residents, which were the prerequisites to becoming a party under the Revenue Bond Law, O.C.G.A. § 36-82-77. The trial court held that appellants failed to prove that they had standing to become parties, and the trial court should have dismissed their objec- tions instead of rejecting those claims on the merits. Determination of blight/slums/urban renewal necessity Determination of blight and the necessity for an urban renewal project have also been heavily litigated. In City of Parker v. State,130 the Supreme Court of Florida held that contrary to Bay County’s argument, it found that the trial court applied the correct statutory standard for blight when reviewing the city’s legislative finding of blighted conditions. For instance, when discussing the city’s finding of blight, the trial court accurately summarized the applicable statutory standard: The evidence presented in this matter supports the correctly articu- lated City Council findings that (1) there were a substantial number of deteriorated, or deteriorating structures, in which conditions, as indicated by government-maintained statistics or other studies, were leading to economic distress or endangering life or property within the community redevelopment area, and (2) nine of the other four- teen factors in the statutory definition were supported by the evi- dence before the council members.131 level for the previous year. There is, therefore, no factual basis upon which to consider Dunn’s claim.” 129 293 Ga. 169; 744 S.E.2d 689; 2013 Ga. LEXIS 556 ; 2013 Fulton County D. Rep. 1818; 2013 WL 2927578. 130 992 So. 2d 171 *; 2008 Fla. LEXIS 1613 **; 33 Fla. L. Weekly S 671. 131 The court noted that the trial court correctly concluded that there is competent, substantial evidence to support the city’s legislative finding of blight. When the city adopted Resolution 06-254, the city had before it a Findings of Necessity Report that listed multiple areas of deterioration in the redevelopment area. The report also contained a windshield survey analysis, which pinpointed locations of deteriorated or deteriorating structures, displayed pictures of those structures, and funds for a state purpose or for a purpose common to the state and county without violating Tenn. Const. art. II, Section 29.124 In the only case in Washington to date, Leonard v. Spokane,125 the Supreme Court of Washington held that the Community Redevelopment Financing Act of 1982 violated the Washington Constitution (Wash. Const. art IX §2) by effectively exempting the differential from school taxes and diverted taxes to public improvements away from common schools. In Tax Increment Financing Com. v. J.E. Dunn Constr. Co.,126 an appellant property owner appealed a Missouri circuit court judgment that had upheld the constitutionality of the Missouri Real Property Tax Increment Allocation Redevelopment Act (Act),127 and authorized the appellant property (that was lo- cated in a redevelopment project area) to be condemned by the local tax increment financing commission. The Supreme Court of Missouri held that the Act, empowers a municipality to cre- ate a Tax Increment Financing Commission, whose actions are subject to final approval by the municipality. The court noted that to obtain funding to acquire property, municipalities are authorized to issue obligations secured by the special allocation fund for the redevelopment project area. In each area, taxpayers were to make payments in lieu of taxes (PILOTs). The appellant in its action against the commission, attacked the constitution- ality of the Act, and argued that the bonds contemplated by the redevelopment plan could not be issued without voter approval. The court noted that If Dunn’s argument proceeds from the premise that the City cannot impose the existing tax levy on the District property without voter approval, the argument must fail. First, it makes no difference to the resolution of this point whether PILOTs are taxes as Dunn contends, or not. The Constitution does not prohibit a city from levying an existing tax without voter approval; instead, it prohibits a city from increasing the current levy of an existing tax without voter approval. It is the tax levy against which the constitution’s prohibition is mea- sured, not the tax itself. Second, Dunn does not argue, nor could it on this record, that the City has increased its tax levy. Indeed, the record shows that the PILOTs at issue are the product of the application of the current levy to increased assessed valuations. The evidence does not show any change in the tax levy. 128 124 The amended statutes also did not authorize the lending of pub- lic credit without prior authorization by the electorate. Further, not everybody with delegated authority was directly accountable to the electorate. The objections to the amendments were based on a miscon- ception of the nature of tax increment financing. They provided for mandated appropriations, whose amount was regulated by taxes received from the subject property, and not for a transfer of the taxing power. 125 27 Wn.2d 194; 897 P.2d 358; 1995 Wash. LEXIS 178. 126 781 S.W.2d 70; 1989 Mo. LEXIS 119. 127 Mo. Rev. Stat. §§ 99.800 to 99.865 (1986). 128 The supreme court noted that “Perhaps Dunn’s argument is directed at that portion of art. X, § 22(a) requiring a political sub- division to reduce its tax levy if “the assessed valuation of property as finally equalized, excluding the value of new construction and improve- ments, increases by a larger percentage than the increase in the general price level from the previous year.” If this is Dunn’s argument, the record is devoid of any evidence that the total ad valorem tax revenues of any of the political subdivisions levying a tax over the District’s property increased by a larger percentage than the increase in the general price

30 TCRP LRD 55 Section 523.274, the condemning authority was still required to evaluate each individual parcel, but that requirement that the condemning authority find that “each parcel” was blighted was eliminated. In addition the court noted that in the second sentence of the final version of Section 523.274 there was no mention of the consequences of a parcel’s not being blighted rather the sentence requires an authority to focus, on whether or not a preponderance of the “defined redevelopment area” is blighted.134 The Court of Appeals of Missouri, Western District noted that at circuit court substantial evidence was given to establish that the condemning authority satisfied both parts of Section 523.274 including a Civil Mall Plan, and a current blight study. Appellants argued that the TIFC did not present evidence that a preponderance of the individual parcels, or 18 out of 35 par- cels, were blighted. The court noted that “... we have already con- cluded that the statute does not require such a finding, we deem the argument to be irrelevant. The circuit court did not err in finding that the condemning authority satisfied both elements of Section 523.274.” TIF district composition, duration, termination, con- solidation, and annexation In Ruby v. Logansport,135 the Court of Appeals in Indiana found that the trial court did not clearly err in concluding that the city presented sufficient evidence that the Annexation Territory is needed and can be used for its development in the reasonably near future. The appeals court noted a number of factors impacting the need for consolidation of the TIF districts: Logansport (the city) had three TIF districts: (1) the already-consol- idated East End/Highway 35 TIF district, (2) the Logan’s TIF district in the City’s downtown area, and (3) the Industrial Park TIF district. The Industrial Park and its TIF district are separated from the rest of the City by the Annexation Territory. 136 In authorizing the annexa- 134 The court then stated “This history causes us to conclude that a condemning authority is to determine that an area is predominantly blighted by measuring total square footage of blight in a redevelopment area and comparing it to the square footage of land that is not blighted. We, therefore, construe Section 523.274 as requiring a condemning authority to examine each individual parcel of a redevelopment area to determine whether or not it is an area, that “retards the provision of housing accommodations or constitutes an economic or social liability or a menace to the public health, safety, morals, or welfare in its present condition and use[.]” Section 99.805(1). We interpret the statute as authorizing the condemning authority to take the land so long as a pre- ponderance of the area, as a whole, is blighted. Although we are not certain why the General Assembly wanted the condemning authority to consider each parcel individually, the statute’s evolution causes us to believe that determining blight according to total square footage is the only reasonable construction of the statute.” 135 (In re Ordinance #2013-09) 2016 Ind. App. Unpub. LEXIS 4 2016 WL 105882. 136 Providing access to the Hoosier Heartland Corridor (which runs directly within the annexation area) connecting the City of Fort Wayne to the City of Lafayette and Interstate 69 to Interstate 6 and through two proposed new interchanges located within the Annexation Territory, direct connections to the Logansport Industrial Park ... and the poten- tial for capturing economic development opportunities. The city has plans to combine the Industrial Park TIF district with the combined Accordingly, the trial court applied the correct statutory standard in upholding the city’s finding of blight, a legislative finding supported by substantial, competent evidence. In Allright Properties, Inc. v. Tax Increment Fin. Comm’n,132 the Court of Appeals of Missouri, Western District confirmed and upheld the circuit court’s judgement that the condemning authority Tax Increment Financing Commission (TIFC) had examined each parcel individually to determine whether or not it was blighted.133 The Court of Appeals of Missouri, Western District in inter- preting the statute to hand noted that The plain and ordinary meaning of Section 523.274’s language sets up a two-prong test that a condemning authority must pass before it can proceed with condemnation. Under the statute’s first sentence, the condemning authority must “individually consider each parcel of property in the defined area with regard to whether the property meets the relevant statutory definition of blight.” Our understanding of this sentence is that the General Assembly is requiring the con- demning authority to examine carefully each parcel apart from the others to determine whether or not it satisfies the statutory definition of blight. The Court of Appeals of Missouri, Western District then turned to how to assess a statue that was open to differing but reasonable interpretations and thus was ambiguous. The court reviewed the introduced and final adopted version of Section 523.274 when the General Assembly had enacted the amended Section 523.274. The court noted that in the final version of described the deterioration. Moreover, the Findings of Necessity Report specifically stated that “these deteriorated structures, functions and conditions are such they ‘are leading to economic distress or endanger life or property.’” Finally, Bay County does not dispute that the city properly found, based on the Findings of Necessity Study, nine of the fourteen statutory factors in support of blight. 132 240 S.W.3d 777 *; 2007 Mo. App. LEXIS 1708. 133 Allright argued that the General Assembly intended for the requirement in Section 523.274’s first sentence to mandate that the con- demning authority make a specific finding as to whether or not each individual parcel is blighted. The court noted that under this interpreta- tion, a blight study would be flawed if it did not contain a list of the parcels and specific findings as to whether or not each parcel was blighted. The court held that “Although the statute requires a condemn- ing authority to evaluate each parcel, we see nothing in the statute that requires the authority to make a specific finding for each parcel. The General Assembly mandated that the condemning authority “consider” each parcel in making a finding that the entire area was predominantly blighted--not that an individual parcel was blighted. If the General Assembly wanted the condemning authority to make express findings for each parcel, surely it would have used the term “finding” or its equiv- alent in the first sentence. Although the condemning authority is not required to make an express finding for each parcel, it still must con- sider each parcel and evidence must establish that it do so.” Appellants also argued that second sentence means that the condemning authority can proceed with condemnation only if it finds that a preponderance of the individual parcels is blighted. TIFC, on the other hand, contends that the sentence means that the condemning authority can proceed only if it finds that a preponderance of the overall area is blighted. The court noted that “Either interpretation is reasonable because the statute does not explain how a condemning authority is to measure “prepon- derance.” Is it to count the number of individual parcels that are blighted or is it to use the overall square footage? Either approach seems to fit reasonably within the statute’s purposes.”

TCRP LRD 55 31 The court then found that pursuant to Ind. Code Sec- tions 36-7-14-3 and 36-7-14-3.5, the county had the authority to establish the EDA because the town had not completed its annexa tion of the disputed territory, even though the town had initiated annexa tion proceedings. The supreme court reversed the appellate court’s judgment and affirmed the trial court’s judgment. Regarding termination, in Northglenn Urban Renewal Auth. v. Reyes,138 the Colorado Court of Appeals held that a trial court’s conclusion that the twenty-five year period specified in subsection 31-25-107 (9)(a) of the Urban Renewal law did not increase the timespan for TIF provision in the city’s renewal plan for properties added after the plans effective date in 1992. The board of county commissioners and tax assessor argued that no new TIF provisions were adopted after the effective date, even though new property was added to the urban renewal area in 2004 and 2008. The court held that using the plain language of the statute the renewal plan requires that the TIF period for all properties terminates in 2017, a date twenty-five years from the effective date of the original TIF provision, or 1992. Need for projects to be specifically identified at the creation of the TIF In Smith v City of St. Louis,139 the Court of Appeals of Missouri, Eastern District, Division upheld and affirmed a trial court’s judgment; however, due to the general interest or impor- tance of questions involved, the appeals court transferred the case to the Supreme Court of Missouri. In this case a proposed the redevelopment of 1,500 acres in an area immediately north of downtown in the City of St. Louis (the Redevelopment Plan) by a developer sought tax increment financing from the city to assist in paying for the costs of re- development. A Redevelopment Plan was submitted to the city and by resolution it was approved. The Redevelopment Plan divided the Redevelopment Area into four smaller areas with proposed land uses and development concepts for an esti mated of “approximately $8.1 billion, over an anticipated 20-year develop ment period.” The Redevelopment Plan did not set forth any specific or enumerated redevelopment projects.140 138 2013 COA 24, 300 P.3d 984. 139 2012 Mo. App. LEXIS 823; 2012 WL 2317240. 140 The Commission recommended that the Board of Aldermen adopt tax increment financing with for two areas, by passage of an ordi- nance as required by Sections 99.800 to 99.865 of Missouri’s Real Prop- erty Tax Increment Allocation Redevelopment Act (TIF Act). The Board of Aldermen enacted Ordinance 68484 and Ordinance 68485 based upon the Commission’s recommendation. Ordinance 68484 pro- vided for the City’s adoption and approval of the redevelopment plan, designation of the Redevelopment Area (described in the plan), and creation of a special fund for allocation and administration of payment of redevelopment costs. Ordinance 68484 provided findings that the Redevelopment Area “on the whole” was blighted, it conformed to the City’s comprehensive plan, had a cost-benefit analysis, and redevelop- ment would not be financially feasible without TIF funding. The ordi- nance did not define or approve any specific project. Ordinance 68485 affirmed and approved the City’s designation of the Redevelopment Area and preparation of two areas development of new commercial, residential, institutional and industrial uses and authorized the city to tion the appeals court noted that the trial court’s conclusions that “The Annexation Territory is needed to consolidate TIF districts, which can be used by the City for the development of the City as a whole, including the Annexation Territory, in the reasonably near future. Logansport has also shown that as a result of the construction of the Hoosier Heartland Corridor, the territory is needed for trans- portation linkages, to control and promote adjacent development, and to prevent conflicting land uses on its borders. The completion of the Hoosier Heartland Corridor will significantly increase traffic in this area. As a result of this increase in traffic, it would be difficult to argue that the city would not benefit from annexing this area. The city will be able to control any growth along the corridor and reap the financial benefit of this development. The remonstrators have pointed to the fact that no development has taken place in the area for many years. The completion of this highway will make it almost a foregone conclusion that some development will come to this area. If not, it would be one of the only places in Indiana where growth did not come to a limited access highway.” The appeals court held that the Remonstrators argument’s disregards the trial court’s undisputed finding that economic development and increased traffic almost certainly will occur along the Corridor and the Remonstrators did not specifically argue that the city cannot use the Annexation Territory for its development in the reasonably near future. The Remonstrators have failed to demonstrate clear error in this regard. In Brenwick Assocs., LLC v. Boone County Redevelopment Comm’n,137 the Supreme Court of Indiana granted a county’s petition to transfer the city’s proposed annexed area into the economic development area. In this case the town began proceedings to annex a certain number of acres of unincorporated land. Shortly afterwards, the county initiated proceedings to create an economic devel- opment area (EDA) that included the town’s proposed annexed areas. The town then amended its annexation ordinance to ex- pand the proposed annexation area. Most of this overlapped the proposed EDA area. The county then approved the establish- ment of the EDA. The town and appellant company appealed the EDA’s establishment. The trial court found that the county had the authority to establish the EDA and followed the proper procedure for doing so. The appellate court ruled that the town’s initiation of annexation proceedings barred the county’s author- ity to create the EDA. The supreme court found that economic development statutes set forth in Ind. Code Section 36-7-14-1 et seq. (Supp. 2007) governed the dispute. In assessing annexation cases the court found that the first-in-time jurisdictional rule applies “when there exist two tribunals possessing concurrent and complete jurisdiction of a subject-matter.” East End/Highway 35 consolidated TIF district to make one consoli- dated district, but the city cannot consolidate TIF districts that are not connected, and the city cannot create a TIF district outside its corporate limits. Therefore, the Annexation Territory must be within the city lim- its in order for Logansport to connect and consolidate the Industrial Park TIF district with one of the city’s two other TIF districts. There [is] currently approximately $1.7 million in the Industrial Park TIF district fund. The Mayor stated that consolidation of the TIF districts would allow TIF funds to flow back and forth throughout the consolidated TIF areas, including the Industrial Park and the Annexation Territory. 137 889 N.E.2d 289; 2008 Ind. LEXIS 498.

32 TCRP LRD 55 court noted that, there is no redevelopment project agreement executed and approved by the city. The court reiterated that as a matter of law, the city must approve a redevelopment area, a redevelopment plan and one or more redevelopment projects in order to comply with the statutory prerequisites for tax in- crement financing. The court in giving the relevant sections of the TIF Act their plain and ordinary meaning, concluded that the statutory language indicates that a “redevelopment project” was required to be approved prior to, or in conjunction with, the city’s adoption of the Redevelopment Ordinances. Trial evi- dence had clearly established that no “redevelopment project” had been included in the Redevelopment Ordinances or in the Redevelopment Plan and no describable or concrete “redevel- opment project” had been included in the Redevelopment Plan because the Redevelopment Plan was general in nature and that specific projects would be decided at a later time. The court noted that for example, in describing the proposed uses for the land and RPAs, the Redevelopment Plan stated that [*33] ‘[i]t is contemplated that office buildings may be built,’ ‘a potential signature office building may be located between Market and Chestnut Streets,’ and Northside ‘envisioned’ a street ‘designated to attract commercial office space and retailers and restaurants.’ However, the Redevelopment Plan did not provide any spe- cifics detailing impending redevelopment projects; but general- ly described Northside’s ideas for land use that were couched in terms of “anticipated,” “may be,” “contemplated,” and “depend- ing on market demand.” The court held that We find these ‘proposals’ are not sufficient to be considered a project under City of Shelbina, 245 S.W.3d at 251. Because the Appellants’ evidence at trial did not include any specific redevelopment project adopted prior to or along with the Redevelopment Ordinances as re- quired under Section 99.845.1, we find that the trial court did not err in concluding Ordinance 68484 and Ordinance 68485 void ab initio. Consistency of Urban Renewal Plans with City Gen- eral Plans and Amendment In Great Rivers Habitat Alliance v. City of St. Peters,142 the Court of Appeals of Missouri, Western District, Division Two upheld a trial court’s judgement that the Redevelopment Plan conformed apto the Comprehensive Plan for the development of the city as a whole. In this case, appellants argued that the Re- development Plan did not conform to 1991 comprehensive plan and a 1994 supplement and that the 1999 Update was not passed in accordance with Section 89.360 and was void. In reviewing appellants arguments regarding conformity with the comprehensive plan, the court noted that the plain meaning of ‘conforms’ would be that the redevelopment plan present findings that are in ‘agreement or harmony’ with the comprehensive plan as a whole. The court noted that Plan author Marks testified that the Redevelopment Plan he prepared conformed to the 1991 Plan and the 1994 Supplement. Both the 1991 Plan and the 1994 Supplement emphasized the need for additional land for industrial development and for development of a broader 142 384 S.W.3d 279; 2012 Mo. App. LEXIS 1054; 2012 WL 3656292. The appeals court begin its analysis by determining whether the city complied with the requirements of the TIF Act. The court held “Northside’s redevelopment plan sets forth estimated dates of completion of objectives, but without reference to any specific projects as that term must be understood. The plan is not the project. Concepts are not projects. Projects are concrete, not hypothetical or abstract: sanitary sewers will be constructed in City Block 1000, commencing on such-and-such date, at an estimated cost of so many dollars. The redevelopment plan’s blanket statement of completion dates without reference to spe- cific projects renders the finding of compliance with [Section] 99.810.1(3) arbitrary.” The appeals court however, noted that … keeping with the [trial court’s] construction of the statute adum- brated above, it is not critical that the redevelopment plan define each and every redevelopment project and set out a completion date. The statute refers to “any” redevelopment project. It is sufficient if the plan or a redevelopment agreement specifies one or more projects with completion dates. Other projects can be approved within the ten year period following approval of the redevelopment plan, but there must be at least one defined project approved at or before the approval of the plan. The appeals court then applied standard principles of statu- tory construction. The appeals court noted that it was apparent that the statute was not adopted with massive re- development plans in mind.… [T]he statutory scheme envisions three essential elements: a redevelopment area, a redevelopment plan, and a redevelopment project or projects. The statutory requirements are littered throughout the various sections of the TIF act, but they are perceptible. Unless an area, a plan and a project or projects co- incide, a city may not approve a tax increment allocation financing. Yet that is precisely what [the City] has chosen to do in this case, with the concurrence of [Northside].141 The appeals court noted that appellants had deliberately chosen to omit defined projects from the redevelopment plan and from the contract for development, noting that the par- ties intentionally substituted “less specific language” and “may” for “will” throughout the redevelopment plan.… [Appellants] elected to postpone any real project agreements. The court noted appellants’ representations that extensive discussion on specific projects had taken place with the Board of Aldermen, to demonstrate specific projects that would be undertaken upon approval of the redevelopment ordinances at issue. However, the enter into an agreement with Northside. execute the Redevelopment Plan. Appellants filed a petition to request a preliminary injunction from “moving forward” on any proceedings or approvals of the Re development Plan. The July 2010 Judgment declared the Redevelop- ment Ordinances “void and of no force or effect as in conflict with [the TIF Act]” because the Redevelopment Plan lacked “the inclusion of defined redevelopment projects and a cost-benefit analysis of such projects as required by [Sections] 99.820.1(3), 99.820.1(5), and 99.845.1.” The trial court ordered that Appellants were permanently restrained and enjoined from implementing the Redevelopment Ordi- nances, implementing any special allocation fund pursuant to the ordi- nances, transferring revenues to or from any such fund, or otherwise taking action under the Redevelopment Ordinances. 141 City of Shelbina v. Shelbina County, see also Tax Increment Financing Comm. V. J.E. Dunn Const. Co., 781 S.W.2d 70 (Mo. banc 1989) (summarizing TIF statutory scheme, entailing an area, a plan and a project); Ste. Genevieve Sch. Dist. v. Board of Aldermen.

TCRP LRD 55 33 In Sherman v. City of Atlanta,147 the Supreme Court of Georgia reviewed appellant’s complaint that school taxes had been illegally diverted to the development authority to fund a city’s tax allocation districts (TADs). The complaint sought in- junctive relief barring the school system from disbursing school taxes previously levied in conjunction with the TADs. The ap- pellant taxpayer challenged the Fulton County Superior Court’s summary judgment to appellees (school system, development authority, and six John Doe defendants). Appellant’s suit alleged that school taxes had been illegally diverted. The Georgia Supreme Court held that under the law when it decided Woodham in February 2008, the local government approvals for the TADs would have been ruled unconstitutional to the same extent that the court held that the proposed fund- ing for the bonds was unconstitutional; at that time, local school taxes could not be used for general redevelopment purposes. However, because a 2008 Amendment to Ga. Const. art. IX, § II, para. VII(b) and O.C.G.A. § 36-44-9(g), governing TADs, changed the applicable law, and expressly made those changes retroactive to the county, city, and local board of education ap- provals required to use school taxes for redevelopment pur- poses, the appellees were properly granted summary judgment by the trial court. The court affirmed the trial court’s grant of summary judgment to appellees and its denial of partial sum- mary judgment to appellant. In Denver Urban Renewal Auth. v. Byrne,148 the court held that an urban renewal authority does not have power to require a local governing body to enter into a tax-allocation financing scheme. In Northglenn Urban Renewal Auth. v. Reyes,149 the Colorado Court of Appeals held trial court erred in determining asses- sor had discretion to calculate revenue from TIF by removing property for which TIF was suspended from the total assessed value but including the suspended property in the base value. The court noted that Assessor’s calculation frustrates the legislative intent of the statute be- cause it fails to give effect to the statutory requirement in subsection (9)(a)(II) that the portion of property tax in excess of the base amount be allocated to the authority. A calculation that creates an imbalance in an authority’s TIF by including property in the base value while removing the same property from the newly assessed value impedes the goals of addressing and financing renewal of blighted areas. The Arkansas Court of appeals held in City of Fayetteville v. Fayetteville Sch. Dist. No. 1,150 that the county tax collector erred in including 2.75 mills in the total ad valorem rate and apply- ing a portion of them to the redevelopment district because the mills were passed to repay proposed school bonds; under subdivision (18)(B)(i) of this section, the “total ad valorem rate” excluded increases that were pledged for repayment of a specific bond issue. 147 293 Ga. 169; 744 S.E.2d 689; 2013 Ga. LEXIS 556 ; 2013 Fulton County D. Rep. 1818; 2013 WL 2927578. 148 618 P.2d 1374 (Colo. 1980). 149 2013 COA 24, 300 P.3d 984. 150 2013 Ark. 71, 427 S.W.3d 1 (2013). economic base. The Redevelopment Area was identified as a particu- larly attractive area for industrial development. In addition, the 1999 Update was the Land Use Plan prepared by DSI, upon which the Re- development Plan was based. The court held We conclude that substantial evidence supports the Board’s legislative finding that the Redevelopment Plan conformed to the Comprehen- sive Plan for the development of the City as a whole. Appellants have not shown that the Board’s conformance finding was clearly arbitrary or unreasonable; thus, we cannot and will not substitute our judg- ment for that of the Board.143 In reviewing appellants’ argument that the 1999 Update was not passed by a resolution of the Commission in accordance with Section 89.360, and is thus void, the court noted that Sec- tion 89.360 requires that the Commission hold a public hearing on a plan amendment and adopt such amendment by resolu- tion. The statute does not state that the resolution must be in writing. The action taken “shall be recorded” on the adopted plan “by the identifying signature of the secretary of the com- mission and filed in the office of the commission . . . and a copy of the plan . . . shall be certified to the [Board] and the municipal clerk.”144 The City Director of Planning Powers testified that she presented the 1999 Update to the City’s Planning and Zoning Commission (“Commission”) at a public hearing. The 1999 Up- date was adopted by the Commission upon oral motion, was physically attached to the Comprehensive Plan, was retained in the Commission files, and was certified to the Board and the City Clerk. The court held that the Commission adopted the 1999 Update by the motion and vote held at the public hearing. 2. Taxation Authority and Relationship to Other Taxation Districts One criticism levied against tax increment financing is that it diverts tax revenue toward a more narrow beneficiary taxing entity or district at the expense of wider tax districts and con- stituents that also share a claim to the property tax. In the case of a county-based TIF, for example, the TIF may direct the en- tirety of the tax revenue increment to the county general fund while public school districts continue for the program’s duration to collect tax revenues off the static baseline assessment. The prospect that TIF could deprive overlapping tax jurisdictions of incremental revenue is contentious. It has decreased pub- lic trust in TIF as an economic development tool and has also spurred lawsuits between competing local authorities, drawing particular attention from school districts.145 Some states, includ- ing South Carolina, Texas, and Kansas, “have enacted policy measures that allow school districts to choose to participate in a TIF district.”146 143 Riggins, 351 S.W.3d at 756. 144 § 89.360. 145 Richard Briffault, The Most Popular Tool: Tax Incre- ment Financing and the Political Economy of Local Govern- ment, 88–91 (2010). 146 Weber and Goddeeris, supra note 6 at 50.

34 TCRP LRD 55 property sought to be condemned.160 Rather broad discretion was vested in the condemning authority to determine what property and how much is necessary to condemn for public purposes. The trial court may not refuse the application on such concerns absent a clear abuse of discretion.161 Revenue sharing and allocation of tax funds In TIF. E. Grand Co. Sch. Dist. 2 v. Winter Park,162 the Colorado Court of Appeals held that a school district, board of education, and board of county commissioners could challenge enactment of an urban renewal plan, where implementation of tax increment financing (TIF) could have caused plaintiffs to lose property tax revenues which would otherwise have been available to them. While the County had authority to sue to pro- tect its interest in property taxes, and school district was entitled to participate in advisory capacity with respect to implementa- tion of. In Leonard v. Spokane,163 the Supreme Court of Washing- ton held that the Community Redevelopment Financing Act of 1982 violated the Washington Constitution. The court held that the differential in assessed property value would be assessed in the absence of the redevelopment act, and therefore effectively exempted the differential from school taxes and diverted taxes to public improvements away from common schools in viola- tion of the Wash. Const. art IX §2. 3. Allowable Costs: Use of TIF Monies for Maintenance and Non-capital Expenditures In Redevelopment Comm’n v. Ind. State Bd. of Accounts,164 the Indiana Court of Appeals held that a trail court had not erred in determining that Ind. Code Ann. Section 36-7-14-28 did not permit the use of tax increment financing funds for continued maintenance of completed redevelopment projects. The court noted that the Indiana Supreme Court had observed .... When the redevelopment costs have been paid, the tax allocation is discontinued and all public bodies share in tax revenues as they did prior to the redevelopment and enjoy the benefits of increased prop- erty tax values and revenues. The legislature passed the tax allocation financing statutes at this time to provide redevelopment commissions with a necessary means to promote development when local govern- ments are facing massive cutbacks in federal assistance and increas- ingly tight fiscal constraints attributable to the property tax freeze.165 The court noted that Ind. Code Ann. Section 36-7-14-39(b) (2) provides that tax increment financing funds may be used by the redevelopment district only to do one or more of the follow- ing, then lists the allowable uses. Notably absent from the list of permissible uses is general and ongoing maintenance of re- developed properties. Instead, the language of the statute indi- 160 Griffin, 346 So. 2d at 991. 161 Id.; Cordones v. Brevard County, 781 So. 2d 519, 522 (Fla. 5th DCA 2001). 162 739 P.2d 862 (Colo. App. 1987). 163 27 Wn.2d 194; 897 P.2d 358; 1995 Wash. LEXIS 178. 164 28 N.E.3d 272 *; 2015. 165 S. Bend Pub. Transp. Corp., 428 N.E.2d at 219. In Van Deusen v. Town of Waterton,151 the Connecticut Supreme Court held that the referendum provision in the char- ter was not applicable to the issuance of tax increment bonds because such bonds are not a charge against the town’s tax payers and do not affect them Sadlowski v. Manchester.152 The court noted that tax increment bonds are authorized under a special chapter of state statute and are paid from the revenues and taxes from the development project for which the bonds are issued.153 Such bonds are not repaid from town funds, are therefore not a general obligation of the town, and will not affect taxes paid by the plaintiff taxpayers.154 The court construed the referendum provision of the charter as applying only to general obligation bonds, which could affect taxes paid by taxpayers, and not to tax increment bonds, which do not affect such taxes.155 The Florida Court of Appeals found that because the agency presented some evidence of the reasonable necessity for the tak- ing, the trial court was required to defer to the agency’s deter- mination that the property was necessary for the redevelop- ment and uphold that decision. Here historic preservation was a legitimate basis to disqualify an alternative site plan under Section 163.340(9), Fla. Stat. (1979). The court applied its two tiered model to determine whether a condemning authority met its burden of proving reasonable necessity for a taking City of Jacksonville v. Griffin.156 The condemning authority must (1) show a reasonable necessity for the condemnation, and (2) If such proof is presented, the condemning authority’s exercise of this discretion should not be disturbed in the absence of illegali- ty, bad faith or gross abuse of discretion.”157 The court noted that “In order to meet its initial burden, the condemning authority need present only “some evidence” of reasonable necessity.158 The court noted that Thus, the critical question posed by this appeal is whether the CRA presented “some evidence” of reasonable necessity. The condemn- ing authority is required to show only some evidence of a reasonable necessity for the taking, not an absolute necessity.159 In this case, the CRA showed that it considered alternative plans, but that they were unsuitable. The CRA also pointed out that, as a matter of long-range planning, it made no sense to have the tiny Mach parcel remain, sur- rounded by a high-rise complex, with the likelihood of it becoming an unusable remnant parcel when the current building outlived its usefulness. The court held that the condemning authority did not need to present evidence pinpointing the need for the particular 151 1999 Conn. Super. LEXIS 1941. 152 206 Conn. 579, 586, 538 A.2d 1052 (1988). 153 Id., 585. 154 Id. 155 Id., 587. 156 346 So. 2d 988, 990 (Fla. 1977). 157 Id. 158 Id.; Broward County v. Ellington, 622 So. 2d 1029, 1031 (Fla. 4th DCA 1993). 159 See Canal Auth. v. Litzel, 243 So. 2d 135, 137-38 (Fla. 1970); Canal Auth. v. Miller, 243 So. 2d 131, 134 (Fla. 1970); Ellington, 622 So. 2d at 1031.