Which of the following best defines a Tax Increment Financing Bond?

A Tax Increment Financing (TIF) Bond is specifically designed to fund redevelopment projects that are anticipated to increase property values in a designated area. The key feature of TIF bonds is that the debt service is paid from the additional property tax revenues generated by the increase in property values due to the redevelopment. This means that as the property values rise as a direct result of the improvements funded by the TIF bonds, the additional property tax revenue collected can be used to pay off the debt.

This financing mechanism is a powerful tool for municipalities looking to promote development and investment in underdeveloped or blighted areas without imposing additional tax burdens on current residents. By linking the bond repayment to future tax revenue that arises as a direct effect of improving the area, TIF bonds encourage investment while ensuring that the costs are covered by the financial benefits of that investment.

Other options do not accurately represent the nature of TIF bonds. Bonds issued for general economic stabilization may cover a broader spectrum of financial needs and are not directly tied to specific projects or future tax revenues. Bonds secured by municipal fees indicate a funding structure that's based on user fees rather than property taxes. Lastly, while TIF funding often supports infrastructure, it is not exclusively for infrastructure development as TIF can also