Legislation reforming an economic incentive program cleared the Oklahoma Legislature today and now awaits Gov. Brad Henry's signature.House Bill 3352, authored by Reps. Randy Terrill and Joe Dorman, cleans up provisions of the Local Development Act, primarily focusing on revisions to the law regarding Tax Increment Financing (TIF) Districts.
Tax Increment Financing allows property taxation to be frozen at the level set before the creation of a development project within the TIF district.
Once a project is completed and growth occurs in the surrounding area, increasing property valuations on neighboring land and boosting sales tax collection in the area, the taxes generated through that growth are separated and directed to pay off bonding for the development.
Normally, TIFs are meant to encourage development funding in economically distressed areas that would not be available otherwise.
"TIF districts are an excellent economic development tool that can spur economic growth in an area that might not otherwise experience it through manufacturing or retail development," said Terrill, R-Moore.
"But we want to ensure TIF districts are serving their intended purpose."
"We've been working on this issue for months, starting with an interim study last year where we heard testimony from economic development officers around the state," said Dorman, D-Rush Springs.
"The men and women charged with spurring economic growth agreed revisions were needed to make TIFs fairer and more successful, so that's what we're doing."
House Bill 3352 also requires the Oklahoma Tax Commission and state Department of Commerce to collect data on all TIF Districts within Oklahoma and generate reports on the successes and failures of each district.
Currently, there is no data collection point regarding TIFs, including information on how many TIFs are currently in effect or proposed around the state.
"Additionally, the legislation will provide further definitions to assist the communities and entities that fall within the boundaries of a TIF district," said Dorman. "Citizens representing cities, counties, school districts, ambulance services, career techs and different state agencies all worked together to craft this compromise language that will assist the operation and creation of future TIF Districts."
"This was a great effort starting with the Revenue & Taxation Committee's work this past summer and finally culminating in this legislation," said Terrill, who serves as Chairman of the committee.
"The effort put forth by all the entities will help see responsible growth and a better system of tracking where public dollars are invested."
House Bill 3352 passed the House of Representatives Friday by a vote of 95-3 and later passed the state Senate 44-3. It now goes to the governor to be signed into law.
