Tax Increment Reinvestment Zone

Tax Increment Reinvestment Zones (TIRZ)

What a TIRZ Is

Chapter 311 of the Texas Tax Code governs the use of Tax Increment Reinvestment Zones (TIRZ). Tax increment financing is a financing method local governments can use to pay for improvements that will draw private investment to an area. Tax increment financing isn't a new tax; instead, it redirects some of the ad valorem tax from property in a geographic area designated as a Tax Increment Reinvestment Zone (TIRZ) to pay for improvements in the zone.

When a municipality creates a TIRZ, it records the total taxable value of all real property within the zone. It's like a snapshot in time of what the property values are at that specific moment. That snapshot is the zone's based value.

Each year, property taxes collected in the zone on base value continued to go into the City's general fund. But as property in the TIRZ develops and becomes more valuable, a portion of the taxes collected on property above the base value is deposited into a tax increment fund. Revenue deposited in the tax increment fund can be only used to finance projects within the zone, including infrastructure, façade programs, landscaping, streetscaping or practically any type of public enhancement consistent with the Chapter 311 and the zone project plan and financing plan.

Benefits of a TIRZ

The benefits of a TIRZ include:

  • Builds needed public infrastructure in areas lacking adequate development to attract businesses.
  • Encourages development, thereby increasing property values and long-term property tax collections
  • Reduces the cost of private development by providing reimbursement for eligible public improvements.

TIRZ Benefits and Q&A

Reinvestment Zone Number 1 

Created in 2024    Ordinance 1946

Board of Directors for the Zone consist of seven (7) members.  All Board members shall be appointed by the City Council. Pursuant to Section 311.009(e)(l) of the Texas Tax Code, each Board member must be at least eighteen (18) years of age and either be a resident of Aransas County or a county adjacent to Aransas County, or own real property in the Zone.