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You Bring Me to TIRZs

Learn about Tax Increment Financing (TIF) and TIRZs, the process, benefits, creation criteria, and more in Texas. Get insights into TIRZ boundaries, board composition, abatement agreements, financing, termination, and Comptroller's role.

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You Bring Me to TIRZs

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  1. You Bring Me to TIRZs

  2. What is a TIF and a TIRZ?

  3. TIRZ Registry Status • Tax Increment Reinvestment Zone Breakdown • # of TIRZs: 317 • # of municipalities with a TIRZ: 145 • # of TIRZs currently updated: 317 • # of TIRZs with no report on file: 0 • # of TIRZs not updated : 0

  4. Simply Put - How Does a TIRZ Work?

  5. Potential Benefits of a TIRZ • Build needed public infrastructure • Encourage development • Reduces cost of private development • Achieving portions of the comprehensive plans and goals • Promote infill and redevelopment of vacant/underutilized parcels. • Promote appropriate mix of land uses • Ensure transportation, utilities and public services to meet present/future needs • Providing public facilities in an efficient and cost effective manner • Highlight a community’s image by enhancing visually a community’s commercial areas and entrances • Quality family-oriented retail, restaurant, and entertainment • Provide ability to influence quality, timing, and type of development • Enhance taxing unit’s tax base • Partner with private developers to construct improvements

  6. TIRZ Process: Steps 1-4 1. Prepare a preliminary financing plan (Tax Code, Section 311.003(b)) 2. Publish the hearing notice (Tax Code, Sections 311.003(c), (d) and (e)) 3. Hold a public hearing (Tax Code, Section 311.011(e)) 4. Designate a reinvestment zone (Tax Code, Sections 311.011 and 311.004)

  7. TIRZ Process: Steps 5-8 5. Board prepares a project plan and finance plan (Tax Code Sections 311.008(b1) and 311.011 Sections (a)-(d)) 6. Contribution to the TIF fund by other taxing units (Tax Code, Section 313.013) 7. Implement tax increment financing (Tax Code, Section 311.010(a)) 8. Submit an annual report (Tax Code, Section 311.016(a)-(b))

  8. Criteria to Create a Reinvestment Zone • Deteriorated structures; • Tax delinquency exceeding the fair value of the land; • Inadequate sidewalks or streets; • Poor platting; • Unsanitary or unsafe conditions; • Deterioration of site; • Defective or unusual conditions; • Conditions that endanger life or property by fire or other disaster; or Tax Code, Section 311.005

  9. Continued - Criteria to Create a Reinvestment Zone • Any combination of these factors: • Federally assisted new community; • Located in a home-rule city; • Impaired growth; and • Sign relocation.

  10. Changing/Modifying Boundaries • Boundaries may be enlarged or reduced. • Enlarging an area by petition. • Extending the term of a whole or portion of a zone. • Tax Code, Section 311.007

  11. Composition of Board Directors • 5-15 members • 1 per “participating” taxing unit • Lead Taxing Unit Appointments • Other Participating Units Combined Total • 2 Year Terms • Staggered Terms • Chairman • Vice Chairman • Tax Code, Section 311.009(a) and (e)-(f)

  12. Abatement Agreements within the TIRZ • Any taxing unit except a school district may enter into an agreement; and • Board and Governing Body Approval • Tax Code, Section 311.0125

  13. TIRZ Financing • Municipality issues tax increment bonds • Municipality creates a Local Government Corporation • Tax Increments are pledged as security • Counties may not issue Tax Increment Bonds

  14. Public/Private Financing in a TIRZ

  15. Collection of the Tax Increment • Can sales taxes be deposited into the TIF fund? • (Tax Code, Section 311.013) • Who pays into the TIF fund? • (Tax Code, 311.013(b) and (c))

  16. Deposit of the Tax Increment • When is payment into the fund to be made? • What happens if a taxing unit misses a payment into the TIF fund? • (Tax Code, Section 311.013)

  17. Termination of the TIRZ • Process • Remaining excess funds Tax Code Section 311.014(d) and 311.017

  18. Comptroller Role • Central registry for TIRZs (Tax Code, Section 311.019(a)). • Submit a report to the Legislature and the Governor no later than December 31 of each even- numbered year (Tax Code, Section 311.020(a)). • Technical assistance (Tax Code, Section 311.063(a)).

  19. Reporting Requirements • New TIRZ (Tax Code, Section • 311.016(b) and 311.019(b)) • Form 50-807 • Ordinance • Project Plan • Finance Plan • Modified TIRZ (Tax Code, Section 311.019(c)) • Ordinance • Project Plan • Finance Plan • Annual Report (Tax Code, Section 311.016(b)) • Form 50-806 • Finance Plan • Recommended - Submit the forms ASAP

  20. Comptroller Publications & Materials • Biennial Report • Semi-Annual TIRZ Financials Log – Nov. 2018 • Abatement & TIRZ Brochures • Abatement & TIRZ online webinars • FAQs

  21. Contact Information Data Analysis & Transparency Division Call: 1-800-531-5441, ext. 3-4679 Email: econ.dev@cpa.texas.gov Frank Alvarez – ext. 6-9231 frank.alvarez@cpa.texas.gov

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