Property Tax Economic Development Programs

Tax Increment Financing

Chapter 311, Tax Code

Tax increment financing (TIF) is a tool that local governments can use to publicly finance needed structural improvements and enhanced infrastructure within a reinvestment zone.

A reinvestment zone can be initiated by petition of the affected property owners or a municipality can initiate a reinvestment zone without the need for a petition. Although counties were authorized to form reinvestment zones by statute in 2005, it is unclear whether such zones would be legal without a constitutional amendment. Counties interested in initiating tax increment financing should seek the advice of legal counsel.

A tax increment financing zone:

• May include no more than 10 percent of property used for residential purposes (does not apply if the district is created by a petition of the landowners).
• May not contain property that cumulatively would exceed 15 percent of the total appraised property value within the city and its industrial districts.
• May not create or change the boundaries of an existing zone if the zone would contain more than 15 percent of the total appraised value of real property taxable by a county or school district.

More Resources:

• Texas Tax Code Chapter 311 Tax Increment Financing Act
• Biennial Reports of Reinvestment Zone for Tax Abatement Registry, Tax Abatement Agreement Registry, Tax Increment Financing Zone Registry and Refund for Economic Development