Local tax increment fin.

AN ACT Relating to local tax increment financing; amending RCW 1
39.114.010, 39.114.020, 39.114.030, 39.114.040, and 39.114.050; and 2
providing an effective date. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 39.114.010 and 2024 c 236 s 1 are each amended to 5
read as follows: 6
The definitions in this section apply throughout this chapter 7
unless the context clearly requires otherwise. 8
(1) "Assessed value of real property" means the valuation of 9
taxable real property as placed on the last completed assessment roll 10
prepared pursuant to Title 84 RCW. 11
(2) "Consumer price index" means the consumer price index for all 12
urban consumers in the west region as published by the United States 13
bureau of labor statistics.14
(3) "Increment area" means the geographic area within which 15
regular property tax revenues are to be apportioned to pay public 16
improvement costs, as authorized under this chapter.17
(((3))) (4) "Increment value" means 100 percent of any increase 18
in the true and fair value of real property in an increment area that 19
is placed on the tax rolls after the increment area takes effect. The 20
increment value shall not be less than zero. 21
H-2858.1
HOUSE BILL 2451
State of Washington 69th Legislature 2026 Regular Session
By Representatives Duerr, Berg, and Parshley
Read first time 01/13/26. Referred to Committee on Local Government.
p. 1 HB 2451
(((4))) (5) "Local government" means any city, town, county, port 1
district, or any combination thereof. 2
(((5))) (6) "Ordinance" means any appropriate method of taking 3
legislative action by a local government, including a resolution 4
adopted by a port district organized under Title 53 RCW.5
(((6))) (7) "Public improvement costs" means the costs of:6
(a) Design, planning, acquisition, required permitting, required 7
environmental studies and mitigation, seismic studies or surveys, 8
archaeological studies or surveys, land surveying, site acquisition, 9
including appurtenant rights and site preparation, construction, 10
reconstruction, rehabilitation, improvement, expansion, and 11
installation of public improvements, and other directly related 12
costs; 13
(b) Relocating, maintaining, and operating property pending 14
construction of public improvements; 15
(c) Relocating utilities as a result of public improvements;16
(d) Financing public improvements, including capitalized interest 17
for up to six months following completion of construction, legal and 18
other professional services, taxes, insurance, principal and interest 19
costs on general indebtedness issued to finance public improvements, 20
and any necessary debt service reserves; 21
(e) Expenses incurred in revaluing real property for the purpose 22
of determining the tax allocation base value by a county assessor 23
under chapter 84.41 RCW and expenses incurred by a county treasurer 24
under chapter 84.56 RCW in apportioning the taxes and complying with 25
this chapter and other applicable law. For purposes of this 26
subsection (((6))) (7)(e), "expenses incurred" means actual staff and 27
software costs directly related to the implementation and ongoing 28
administration of increment areas under this chapter;29
(f) Administrative expenses and feasibility studies reasonably 30
necessary and related to these costs, including related costs that 31
may have been incurred before adoption of the ordinance authorizing 32
the public improvements and the use of tax increment financing to 33
fund the costs of the public improvements; and 34
(g) Funding for interlocal agreements, revenue sharing 35
agreements, and mitigation to impacted taxing districts as allowed in 36
RCW 39.114.020. 37
(((7))) (8) "Public improvements" means: 38
(a) Infrastructure improvements owned by a state or local 39
government within or outside of and serving the increment area and 40
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real property owned or acquired by a local government within the 1
increment area including: 2
(i) Street and road construction; 3
(ii) Water and sewer system construction, expansion, and 4
improvements; 5
(iii) Sidewalks and other nonmotorized transportation 6
improvements and streetlights; 7
(iv) Parking, terminal, and dock facilities; 8
(v) Park and ride facilities or other transit facilities;9
(vi) Park and community facilities and recreational areas;10
(vii) Stormwater and drainage management systems;11
(viii) Electric, broadband, or rail service; 12
(ix) Mitigation of brownfields; ((or))13
(x) Fire, life, and public safety facilities and equipment 14
necessary to provide the desired level of service to the increment 15
area; and16
(b) Expenditures for any of the following purposes:17
(i) Purchasing, rehabilitating, retrofitting for energy 18
efficiency, and constructing housing for the purpose of creating or 19
preserving long-term affordable housing; 20
(ii) Purchasing, rehabilitating, retrofitting for energy 21
efficiency, and constructing child care facilities serving children 22
and youth that are low-income, homeless, or in foster care;23
(iii) Providing maintenance and security for the public 24
improvements; 25
(iv) Historic preservation activities authorized under RCW 26
35.21.395; or 27
(v) Relocation and construction of a government-owned facility, 28
with written permission from the agency owning the facility and the 29
office of financial management. 30
(((8))) (9) "Real property" means: 31
(a) Real property as defined in RCW 84.04.090; and32
(b) Privately owned or used improvements located on publicly 33
owned land that are subject to property taxation or leasehold excise 34
tax. 35
(((9))) (10) "Regular property taxes" means regular property 36
taxes as defined in RCW 84.04.140, except: (a) Regular property taxes 37
levied by port districts or public utility districts to the extent 38
necessary for the payments of principal and interest on general 39
obligation debt; and (b) regular property taxes levied by the state 40
p. 3 HB 2451
for the support of the common schools under RCW 84.52.065. Regular 1
property taxes do not include excess property tax levies that are 2
exempt from the aggregate limits for junior and senior taxing 3
districts as provided in RCW 84.52.043. "Regular property taxes" does 4
not include excess property taxes levied by local school districts or 5
emergency medical care and service taxes levied under RCW 84.52.069.6
(((10))) (11) "Tax allocation base value" means the assessed 7
value of real property located within an increment area for taxes 8
imposed in the year in which the increment area takes effect.9
(((11))) (12) "Tax allocation revenues" means those revenues 10
derived from the imposition of regular property taxes on the 11
increment value. 12
(((12))) (13) "Taxing district" means a governmental entity that 13
levies or has levied for it regular property taxes upon real property 14
located within a proposed or approved increment area.15
Sec. 2. RCW 39.114.020 and 2025 c 417 s 1310 are each amended to 16
read as follows: 17
(1) A local government may designate an increment area under this 18
chapter and use the tax allocation revenues to pay public improvement 19
costs, subject to the following conditions: 20
(a) The local government must adopt an ordinance designating an 21
increment area within its boundaries and describing the public 22
improvements proposed to be paid for, or financed with, tax 23
allocation revenues; 24
(b) The local government may not designate increment area 25
boundaries such that the entirety of its territory falls within an 26
increment area; 27
(c)(i) Except as provided in (c)(ii) of this subsection, the 28
increment area may not have an assessed valuation of more than 29
$200,000,000 as adjusted annually by the consumer price index or more 30
than 20 percent of the sponsoring jurisdiction's total assessed 31
valuation, whichever is less, when the ordinance is passed. If a 32
sponsoring jurisdiction creates two increment areas, the total 33
combined assessed valuation in both of the two increment areas may 34
not equal more than $200,000,000 as adjusted annually by the consumer 35
price index or more than 20 percent of the sponsoring jurisdiction's 36
total assessed valuation, whichever is less, when the ordinances are 37
passed creating the increment areas. 38
p. 4 HB 2451
(ii) During the 2026 fiscal year, a sponsoring jurisdiction may 1
enact a tax increment area or areas with a combined assessed 2
valuation greater than $200,000,000 but no more than $500,000,000 if:3
(A) The sponsoring jurisdiction is a city with a population over 4
150,000 but less than 170,000 and is located in a county with a 5
population of over 1,500,000; 6
(B) The tax increment area is connected to Interstate 405 and the 7
transportation-related public improvements that will be funded 8
enhance the integration and connection of neighborhoods within and 9
adjacent to the increment area; 10
(C) The sponsoring jurisdiction enacted an ordinance designating 11
the increment area no later than June 30, 2026; and12
(D) A governing body of any taxing district within the increment 13
area approves by a majority vote, and according to the governing 14
body's ordinance and publication procedures, the taxing district's 15
partial or full participation in the tax increment project. If the 16
governing body does not approve its participation, the taxing 17
district's property taxes are not subject to apportionment under this 18
chapter and the taxing district is excluded from the provisions of 19
this section; 20
(d) Except as otherwise provided in (c)(ii) of this subsection, a 21
local government can create no more than two active increment areas 22
at any given time and they may not physically overlap by including 23
the same land in more than one increment area created by any local 24
government at any time; 25
(e) The ordinance must set a sunset date for the increment area, 26
which ((may)) must be the earlier of no more than 25 years after the 27
first year in which tax allocation revenues are collected from the 28
increment area or the date that the tax allocation revenues equal the 29
maximum amount of public improvements obligations, including any debt 30
service obligations identified in the ordinance; 31
(f) The ordinance must identify the public improvements to be 32
financed and indicate whether the local government intends to issue 33
bonds or other obligations, payable in whole or in part, from tax 34
allocation revenues to finance the public improvement costs, and must 35
estimate the maximum amount of obligations contemplated;36
(g) The ordinance must provide that the increment area takes 37
effect on June 1st following the adoption of the ordinance in (a) of 38
this subsection; 39
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(h) The sponsoring jurisdiction may not add additional public 1
improvements to the project after adoption of the ordinance creating 2
the increment area or change the boundaries of the increment area. 3
The sponsoring jurisdiction may expand, alter, or add to the original 4
public improvements when doing so is necessary to assure the 5
originally approved improvements can be constructed or operated;6
(i) The ordinance must impose a deadline by which commencement of 7
construction of the public improvements shall begin, which deadline 8
must be ((at least)) no more than five years into the future and for 9
which extensions not to exceed two years shall be made available for 10
good cause; ((and))11
(j) The local government must make a finding that:12
(i) The public improvements proposed to be paid or financed with 13
tax allocation revenues are ((expected)) necessary to encourage 14
private development within the increment area and to increase the 15
assessed value of real property within the increment area;16
(ii) Private development that is anticipated to occur within the 17
increment area as a result of the proposed public improvements will 18
be permitted consistent with the permitting jurisdiction's applicable 19
zoning and development standards; 20
(iii) The private development would not reasonably be expected to 21
occur solely through private investment within the reasonably 22
foreseeable future without the proposed public improvements; and23
(iv) The increased assessed value within the increment area that 24
could reasonably be expected to occur without the proposed public 25
improvements would be less than the increase in the assessed value 26
estimated to result from the proposed development with the proposed 27
public improvements; and28
(k) The ordinance may not include areas within an increment area 29
that already have necessary public improvements for development or 30
where a private building or structure is under construction, has an 31
active application for construction, has a valid permit for 32
construction, or is undergoing a project-level environmental review 33
process under chapter 43.21C RCW, before the formation of an 34
increment area. 35
(2) In considering whether to designate an increment area, the 36
legislative body of the local government must prepare a project 37
analysis that shall include, but need not be limited to, the 38
following: 39
p. 6 HB 2451
(a) A statement of objectives of the local government for the 1
designated increment area; 2
(b) A statement as to the property within the increment area, if 3
any, that the local government may intend to acquire;4
(c) The duration of the increment area; 5
(d) Identification of all parcels to be included in the area;6
(e) A description of the expected private development within the 7
increment area, including a comparison of scenarios with the proposed 8
public improvements and without the proposed public improvements;9
(f) A ((description)) list of the public improvements, including 10
individual improvements in priority order with each improvement's 11
nexus to encouraging private development, estimated completion date, 12
estimated public improvement costs, proposed funding sources, and the 13
estimated amount of bonds or other obligations expected to be issued 14
to finance the public improvement costs and repaid with tax 15
allocation revenues; 16
(g) The assessed value of real property listed on the tax roll as 17
certified by the county assessor under RCW 84.52.080 from within the 18
increment area and an estimate of the increment value and tax 19
allocation revenues expected to be generated; 20
(h) An estimate of the job creation reasonably expected to result 21
from the public improvements and the private development expected to 22
occur in the increment area; 23
(i) An assessment of any impacts on the following:24
(i) Affordable and low-income housing; 25
(ii) The local business community; 26
(iii) The local school districts; and 27
(iv) The ((local fire service, public hospital service, and 28
emergency medical services)) taxing districts; and29
(j) The assessment of impacts under (i) of this subsection (2) 30
must be done in consultation with any impacted taxing district 31
consistent with RCW 39.114.040 and include ((any)):32
(i) An estimate of the revenue impacts to each taxing district in 33
the area, including tax allocation revenues, levy rate adjustments, 34
and other revenues including, but not limited to, impact fees, fire 35
benefit charges, sales tax, and utility tax, over the term of the 36
increment area; and37
(ii) Any necessary mitigation to the ((local fire service, public 38
hospital service, and emergency medical services; and39
p. 7 HB 2451
(k) An assessment of any impacts of any other junior taxing 1
districts not referenced in (i) of this subsection (2))) taxing 2
districts. 3
(3) The local government may charge a private developer, who 4
agrees to participate in creating the increment area, a fee 5
sufficient to cover the cost of the project analysis and establishing 6
the increment area, including staff time, professionals and 7
consultants, and other administrative costs related to establishing 8
the increment area. 9
(4) Nothing in this section prohibits a local government from 10
entering into an agreement under chapter 39.34 RCW with another local 11
government for the administration or other activities related to tax 12
increment financing authorized under this section.13
(5)(a) If the project analysis indicates that an increment area 14
will impact at least 20 percent of the assessed value in a public 15
hospital district, fire protection district, or regional fire 16
protection service authority, or if the public hospital district's or 17
the fire service agency's annual report, or other governing board-18
adopted capital facilities plan, demonstrates an increase in the 19
level of service directly related to the increased development in the 20
increment area, the local government must enter into negotiations for 21
a mitigation plan with the impacted public hospital district, fire 22
protection district, or regional fire protection service authority to 23
address level of service issues in the increment area.24
(b) If the parties cannot agree pursuant to (a) of this 25
subsection (5), the parties must proceed to arbitration to determine 26
the appropriate mitigation plan. The board of arbitrators must 27
consist of three persons: One appointed by the local government 28
seeking to designate the increment area and one appointed by the 29
junior taxing district, both of whom must be appointed within 60 days 30
of the date when arbitration is requested, and a third arbitrator who 31
must be appointed by agreement of the other two arbitrators within 90 32
days of the date when arbitration is requested. If the two are unable 33
to agree on the appointment of the third arbitrator within this 90-34
day period, then the third arbitrator must be appointed by a judge in 35
the superior court of the county within which the largest portion of 36
the increment area is located. The determination by the board of 37
arbitrators is binding on both the local government seeking to impose 38
the increment area and the junior taxing district.39
p. 8 HB 2451
(6)(a) For increment areas that take effect after June 1, 2026, 1
the local government designating the increment area and any impacted 2
taxing district must begin negotiations to develop an agreement if a 3
taxing district, within 30 days of receiving the project analysis as 4
required in subsection (8) of this section, indicates any of the 5
following conditions:6
(i) The increment area will create an increase in residential 7
development of at least 50 units or impact at least 10 percent of the 8
assessed value in the impacted taxing district;9
(ii) The impacted taxing district can demonstrate or has 10
forecasted an increase in the service demands directly related to the 11
increased development in the increment area;12
(iii) The project analysis forecasts a loss of property tax 13
revenue over the term of the increment area; or14
(iv) A taxing district is subject to more than one tax increment 15
area and the proposed increment area will result in more than 20 16
percent of the taxing district's assessed value being subject to tax 17
increment areas.18
(b) If voters in the impacted taxing district approve a property 19
tax levy lid lift, the impacted taxing district and the local 20
government designating an increment area must review the agreement 21
and address impacts related to the levy lid lift. Either party may 22
initiate a review of any agreement no more frequently than every five 23
years. Subsequent revisions of an agreement are not subject to 24
arbitration.25
(c) If the parties cannot agree pursuant to (a) of this 26
subsection (6), the parties must proceed to mediation within 30 days 27
of the end of the notice and consultation period in RCW 39.114.040 to 28
further attempt to reach an agreement.29
(d) If, after 30 days, the parties cannot agree in mediation, the 30
parties must proceed to arbitration within 90 days of the end of the 31
notice and consultation period in RCW 39.114.040 to determine the 32
appropriate mitigation plan. The board of arbitrators must consist of 33
three persons: One appointed by the local government seeking to 34
designate the increment area and one appointed by the impacted taxing 35
district, both of whom must be appointed within 30 days of the date 36
when arbitration is requested, and a third arbitrator who must be 37
appointed by agreement of the other two arbitrators within 30 days of 38
the date when arbitration is requested. If the two are unable to 39
agree on the appointment of the third arbitrator within this 60-day 40
p. 9 HB 2451
period, then the third arbitrator must be appointed by a judge in the 1
superior court of the county within which the largest portion of the 2
increment area is located. The determination by the board of 3
arbitrators is binding on both the local government seeking to impose 4
the increment area and the impacted taxing district. In making a 5
determination, the board of arbitrators must consider:6
(i) Whether new service demands will be created directly by the 7
new development in the increment area that are not funded by the 8
corresponding revenue generated by the new development;9
(ii) Whether the impacted taxing district will experience a loss 10
of property tax revenue beyond the base level and has taken steps to 11
address impacts to property tax revenues as allowed under RCW 12
84.55.010;13
(iii) How the increment area may impact taxpayers outside of the 14
increment area;15
(iv) Other revenues generated for the impacted taxing district in 16
the increment area; and17
(v) The overall 25-year impact of the increment area on the 18
impacted taxing district, including the broader economic impacts of 19
the development.20
(e) Mitigation may include reductions or suspensions in the 21
percentage or term of tax allocation revenues transferred to the 22
local government designating the increment area, the use of tax 23
allocation revenues to fund public improvements to serve the 24
projected development in the increment area, and other provisions 25
designed to mitigate the impacts on taxing districts. Mitigation may 26
not include allowing a taxing district to opt out or be removed from 27
participation in the tax allocation and increment area. Any decision 28
must be consistent with the uniformity requirement of Article VII, 29
section 1 of the state Constitution.30
(7) The local government ((may)) must reimburse the assessor and 31
treasurer for their costs as provided in RCW 39.114.010(((6))) (7)32
(e). 33
(((7))) (8) Prior to the adoption of an ordinance authorizing 34
creation of an increment area, the local government must:35
(a) Hold at least two public ((briefings)) hearings for the 36
community solely on the tax increment project that include the 37
description of the increment area, the public improvements proposed 38
to be financed with the tax allocation revenues, and a detailed 39
estimate of tax revenues for the participating local governments and 40
p. 10 HB 2451
taxing districts, including the amounts allocated to the increment 1
public improvements. The ((briefings)) hearings must be announced at 2
least two weeks prior to the date being held, including publishing in 3
a legal newspaper of general circulation and posting information on 4
the local government website and all local government social media 5
sites, and must occur no earlier than 90 days after submitting the 6
project analysis to the office of the treasurer and all local 7
governments and taxing districts impacted by the increment area;8
(b) Submit the project analysis to all local governments and 9
taxing districts impacted by the increment ((area no less than 90 10
days prior to the adoption of the ordinance )) at the same time as 11
submitting the analysis to the office of the treasurer; and12
(c) Submit the project analysis to the office of the treasurer 13
for review and consider any comments that the treasurer may provide 14
upon completion of their review of the project analysis as provided 15
under this subsection. The treasurer must complete the review within 16
90 days of receipt of the project analysis , must accept and consider 17
comments from taxing districts, and may consult with other agencies 18
and outside experts as necessary. Upon completing their review, the 19
treasurer must promptly provide to the local government , and any 20
taxing district that submitted comments, any comments regarding 21
suggested revisions or enhancements to the project analysis that the 22
treasurer deems appropriate based on the requirements in subsection 23
(2) of this section. 24
Sec. 3. RCW 39.114.030 and 2021 c 207 s 3 are each amended to 25
read as follows: 26
(1) Public improvements that are financed under this chapter may 27
be undertaken and coordinated with other programs or efforts 28
undertaken by the local government and other taxing districts and may 29
be funded in part from revenue sources other than tax allocation 30
revenues. 31
(2) Public improvements that are constructed by a private 32
developer must meet all applicable state and local laws.33
(3) A private developer may construct public improvements and 34
receive payment from tax allocation revenues received by the local 35
government as part of a reimbursement agreement between the parties. 36
Any reimbursement paid to the developer must only be secured by tax 37
allocation revenues received by the local government.38
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Sec. 4. RCW 39.114.040 and 2024 c 236 s 3 are each amended to 1
read as follows: 2
The local government designating the increment area must:3
(1) Provide written notice to the governing body of each taxing 4
district within which the increment area is located a minimum of 5
((90)) 180 days before submitting the project analysis to the office 6
of the treasurer as required in RCW 39.114.020(((7))) (8)(c) and 7
offer to consult with the affected taxing district within 30 days for 8
the purpose of discussing the proposed increment area and the 9
development of the project analysis, including revenue and mitigation 10
impacts; 11
(2) Publish notice in a legal newspaper of general circulation 12
within the jurisdiction of the local government at least two weeks 13
before the date on which the ordinance authorizing creation of an 14
increment area is adopted that describes the public improvements, 15
describes the boundaries of the increment area, and identifies the 16
location and times where the ordinance and other public information 17
concerning the public improvement may be inspected; ((and))18
(3) Deliver a certified copy of the adopted ordinance to the 19
county treasurer, the county assessor, and the governing body of each 20
taxing district within which the increment area is located at the 21
respective addresses specified pursuant to RCW 42.56.040 within 10 22
days of the date on which the ordinance was adopted; and23
(4)(a) Prepare and make available to the residents of all 24
impacted taxing jurisdictions an annual report on the status of the 25
increment area, including:26
(i) Progress on construction of public improvements funded by the 27
increment value;28
(ii) The economic benefits created in the increment area;29
(iii) The status of mitigation to impacted taxing districts;30
(iv) How the increment area has impacted tax revenues and rates 31
in the impacted taxing districts; and32
(b) Request and include in its annual report any statements 33
provided by impacted taxing districts. 34
Sec. 5. RCW 39.114.050 and 2023 c 354 s 4 are each amended to 35
read as follows: 36
Apportionment of taxes shall be as follows: 37
(1) Commencing in the calendar year immediately following the 38
calendar year in which the increment area takes effect in accordance 39
p. 12 HB 2451
with RCW 39.114.020, the county treasurer shall distribute receipts 1
from regular property taxes imposed on real property located in the 2
increment area as follows: 3
(a) Each taxing district shall receive that portion of its 4
regular property taxes produced by the rate of tax levied by or for 5
the taxing district on the tax allocation base value for that 6
increment area; 7
(i) This apportionment does not interfere with the calculation 8
and implementation of a taxing district's highest allowable levy per 9
RCW 84.55.010 subject to action by its governing body;10
(ii) Should a taxing district subsequently pass a voter approved 11
levy lid lift, the tax allocation base value must be recalculated to 12
proportionally increase by the percentage amount of the tax rate 13
increase from the current rate in the first year due to the levy lid 14
lift;15
(b) The local government that designated the increment area shall 16
be entitled to receive an additional amount equal to the amount 17
derived from the regular property taxes levied by or for each taxing 18
district upon the increment value within the increment area. The 19
local government that designated the increment area shall receive no 20
more than is needed to pay or repay costs directly associated with 21
the public improvements identified in the approved ordinance and may 22
agree to receive less than the full amount of this portion, as long 23
as bond debt service, reserve, and other bond covenant requirements 24
are satisfied, in which case the balance of these tax receipts shall 25
be allocated to the taxing districts that imposed regular property 26
taxes, or have regular property taxes imposed for them, in the 27
increment area for collection that year in proportion to their 28
regular tax levy rates for collection that year. The local government 29
may request that the treasurer transfer this additional portion of 30
the property taxes to its designated agent. The portion of the tax 31
receipts distributed to the local government or its agent under this 32
subsection (1)(b) may only be expended to finance public improvement 33
costs associated with the public improvements financed in whole or in 34
part by tax increment financing; and 35
(c) This section shall not apply to any receipts from the regular 36
property taxes levied by: 37
(i) The state for the support of the common schools under RCW 38
84.52.065; 39
(ii) Local school district excess levies; and 40
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(iii) Port districts or public utility districts specifically for 1
the purpose of making required payments of principal and interest or 2
general indebtedness. 3
(2) The apportionment of tax allocation revenues must cease when 4
the taxing district certifies to the county assessor in writing that 5
tax allocation revenues are no longer necessary or obligated to pay 6
public improvement costs, but in no event shall the apportionment of 7
tax allocation revenues continue beyond the sunset date established 8
pursuant to RCW 39.114.020(1)(e). Any excess tax allocation revenues 9
and earnings on the tax allocation revenues remaining at the time the 10
apportionment of tax receipts terminates must be returned to the 11
county treasurer and distributed to the taxing districts that imposed 12
regular property taxes, or had regular property taxes imposed for it, 13
in the increment area for collection that year, in proportion to the 14
rates of their regular property tax levies for collection that year.15
(3) The apportionment and distribution of portions of the regular 16
property taxes levied by or for each taxing district upon the 17
increment value within the increment area pursuant to and subject to 18
the requirements of this chapter is declared to be a public purpose 19
of and benefit each such taxing district. 20
(4) The apportionment and distribution of portions of the regular 21
property taxes levied by or for each taxing district upon the 22
increment value within the increment area pursuant to this section 23
shall not affect or be deemed to affect the rate of taxes levied by 24
or within any such taxing district or the consistency of any such 25
levies with the uniformity requirement of Article VII, section 1 of 26
the state Constitution. 27
(5)(a) For a local government having a designated increment area 28
under this chapter as of May 9, 2023, the county assessor must adjust 29
the tax allocation base value for that increment area to include the 30
assessed value of any privately owned improvements located on 31
publicly owned land for taxes imposed in the year in which the 32
increment area was first designated. However, no adjustment is 33
required if the increment area does not include any privately owned 34
improvements located on publicly owned land subject to property 35
taxation as of the date the increment area became effective.36
(b) The adjusted tax allocation base value under this subsection 37
(5) does not impact any apportionment and distribution under this 38
section occurring in calendar years before calendar year 2024.39
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NEW SECTION. Sec. 6. This act takes effect June 2, 2026.1
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