How Mississippi’s New TIF Legislation Gives Economic Development Directors a Stronger Hand

If you work in economic development in Mississippi, you already know the challenge: every city in the region is competing for the same developers, the same capital, and the same job-creating projects. Your ability to close deals depends on the incentive tools at your disposal — and whether those tools can move fast enough to keep a developer at the table.

Tax Increment Financing has been part of Mississippi’s toolkit for years. But new legislation signed into law in 2026 changes the way TIF can be structured, giving economic development professionals a fundamentally better instrument to work with. The result is a TIF Bond that shifts financial risk away from your municipality, moves faster than traditional public bond issuances, and gives developers the upfront capital they need to break ground.

Here’s what you need to know.

A Quick Refresher: How TIF Works in Mississippi

TIF doesn’t create new taxes. It doesn’t raise anyone’s tax rate. It simply captures the increase in property tax revenue — the “increment” — that a new development generates, and redirects that increase toward paying for costs associated with that project.

Before a project is built, the land generates a baseline level of property tax revenue, known as the original assessed value. After the project is completed, the property is worth more, and taxes go up accordingly. The difference between the new, higher amount and the original baseline is the increment. Under TIF, that increment flows into a dedicated fund used to repay eligible project costs — infrastructure, site preparation, demolition, public improvements, and more.

The original assessed value continues flowing to the city, county, school district, and other taxing jurisdictions exactly as before. Nothing is taken away from existing revenue streams. Only the new increment is captured, and only for a limited period of up to 30 years. When the TIF period ends, all revenue — including the increment — flows back to every taxing body in full.

Mississippi also allows municipalities to pledge a percentage of sales tax collected within the TIF district and attributable to a project, adding another layer of flexibility.

What Changes Under the New Legislation

Senate Bill 2846, effective July 1, 2026, introduces a new mechanism called a Taxpayer Agreement. This is the key to understanding developer-backed TIF Bonds and why they represent a major upgrade for municipalities.

Under a Taxpayer Agreement, the developer voluntarily enters into a binding contractual obligation tied to the ad valorem taxes on the project area. This agreement is not a tax, not a fee, and not an assessment imposed by the municipality. It does not constitute a pledge of the city’s credit. It does not count against any constitutional or statutory debt limits.

In practical terms, here’s what that means for your city: if the increment generated by a project falls short of what’s needed to service the TIF Bond, the developer — not the municipality — is contractually obligated to cover the difference. The risk sits with the private party who controls the project’s success, not with the public entity that approved it.

Taxpayer Agreements can also be secured by a lien on the real property itself. That lien arises automatically upon execution and recording, holds parity with ad valorem tax liens, and takes priority over any subsequent mortgage or encumbrance. It’s enforceable the same way delinquent property taxes are enforced under Mississippi law.

How Developer-Backed TIF Bonds Actually Work

The mechanics are straightforward, especially compared to a traditional public bond issuance.

The municipality issues a TIF Bond directly to the developer. The developer then assigns — sells — that bond to a lender, such as Hageman Capital, who purchases the bond and provides the developer with immediate upfront capital. The bond is repaid over time solely from the tax increment generated by the completed project.

Because the bond is a private placement between the developer and a lender, it avoids the cost and complexity of a public offering. Because the bond is secured by the Taxpayer Agreement and the developer’s guarantee, the municipality’s general credit is never at stake. And because the lender provides capital upfront, the developer can begin construction without waiting years for increment revenue to accumulate.

For economic development directors, this changes the conversation with prospective developers entirely. You’re no longer asking your city council to take on financial exposure. You’re offering a tool that funds a project’s success while protecting every dollar of existing public revenue.

What Qualifies for TIF in Mississippi

Mississippi’s TIF Act defines five categories of eligible project areas: blighted or deteriorated areas, historic preservation sites, areas with defective layout or infrastructure, projects certified under the Regional Economic Development Act, and — most broadly — areas where development is determined to be in the public interest.

That last category is significant. It gives your governing body wide latitude to establish a TIF Bond for any project that serves an important public purpose, even if the area doesn’t meet a traditional blight standard. If the project creates jobs, expands the tax base, improves infrastructure, or eliminates underutilized land, it can qualify.

Eligible costs under the statute are equally broad: land acquisition, demolition, site preparation, streets and utilities, public improvements, planning and engineering, and — under the new legislation — the construction, installation, and equipping of both public and private improvements.

Why This Matters for Your Next Deal

Economic development is a relationship business. Developers evaluate cities not just on location and market fundamentals, but on how quickly and confidently a municipality can structure an incentive package. A developer who hears “we can offer you a TIF Bond that gives you upfront capital, backed by your own project’s increment, with no municipal credit risk” is far more likely to stay at the table than one who hears “we’ll look into it and get back to you.”

Mississippi’s new TIF legislation gives you that confidence. It’s a tool built for the way modern development deals actually work — fast, developer-driven, and structured to protect the public interest at every step.

If you’re evaluating a development opportunity and want to understand how a developer-backed TIF Bond could fit into your incentive package, Hageman Capital is a resource available to you at no cost. We specialize in TIF Bond structuring across multiple states and can help you evaluate a deal, model the increment, and walk your elected officials through the process from first conversation to ribbon cutting.