Tax Increment Reinvestment Zones (TIRZ)

Tax increment financing is a tool that local governments can use to publicly finance needed structural improvements and enhanced infrastructure within a defined area. These improvements are usually undertaken to promote both the viability of existing businesses and to attract new commercial enterprises to such an area, which is referred to as a Tax Increment Reinvestment Zone (TIRZ). A TIRZ is the real property that is taxed to fund a tax increment fund (TIF) project. The zone is created when the TIF project begins. The cost of improvements to a zone is repaid by the contribution of future tax revenues by each taxing unit that levies taxes against the property. Specifically, each taxing unit can choose to dedicate all, a portion, or none of the tax revenue that is attributable to the increase in property values due to the improvements within the reinvestment zone. The statutes governing tax increment financing are in the Texas Tax Code, Chapter 311.

For each school year, a school district is entitled to state aid under the Texas Education Code (TEC), Section 48.253, in an amount equal to the amount the district is required to pay into the TIF for a reinvestment zone under Section 311.013(n), Tax Code. The payment (based on a 100% TIF participation level) using a school district’s current captured appraised value as defined by Tax Code, Section 311.012(b), is the difference between tax collections for the TIRZ in the current school year based on the 2005 maintenance and operations (M&O) tax rate and the tax collections for the TIRZ in the current school year based on the current M&O tax rate.

Law

• Texas Education Code: §48.253, Additional State Aid For Tax Increment Financing Payments   
• Texas Tax Code: §311.003, Tax Increment Financing Act

Reports, Links, and Other Information

• Email Requesting TIRZ Survey
• TIRZ Survey Form  
• Tax Increment Reinvestment Zones (TIRZ) One Page Description
• TIRZ FAQ
• The TIRZ program is administered by the Texas Comptroller of Public Accounts and more information can be found here.