Tax Increment Financing in Mississippi

Mississippi law allows Mississippi cities and counties to issue Tax Increment Financing (“TIF”) bonds to encourage economic development within designated areas by financing public infrastructure improvements for public or private development projects without the necessity of issuing general obligation bonds.  Public infrastructure improvements may include roads, utilities, and drainage improvements.  TIF bonds may be financed for up to 30 years and may be eligible for a tax-exempt interest rate subject to federal tax requirements.  TIF bonds are secured by the additional ad valorem taxes and/or sales taxes generated by the project described in the TIF plan for such project.   The developer may also guarantee to pay the TIF bonds if the incremental taxes are insufficient for that purpose.  Additionally, the issuing entity and the developer may agree for the developer to pay the costs of the project prior to the issuance of the TIF bonds, with the municipality to reimburse the developer for actual costs incurred once the TIF bonds are issued.  The developer must also agree to dedicate the redevelopment project to the municipality to assure public use and access.   No special tax is levied to repay the TIF bonds.  A municipality may not pledge its general credit or taxing powers to secure the bonds.