Land Use & Zoning

A North Dakota municipality creates a 'tax increment financing' (TIF) district to finance infrastructure. TIF districts work by:

AIncreasing property taxes in the district permanently
BCapturing the increase in property tax revenue resulting from development to pay for infrastructure improvements✓ Correct
CProviding tax exemptions for all properties in the district
DAllowing the city to confiscate property for development

Explanation

TIF districts freeze the base assessed value and then use the incremental tax revenues generated by development to repay bonds or fund infrastructure improvements. The increased tax revenue 'increment' is redirected to the TIF district.

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