Texas Increases City and County Ability to Use TIF

Texas recently adopted House Bill 2853 which increases City and County ability to use tax increment financing as an economic development tool. By amending several sections of the Tax Code regarding Tax Increment Reinvestment Zones (TIRZ), HB 2853, among other important measures, broadens the scope of TIF eligible costs and eases several conditions on TIRZ designation.

Major changes include:

  • Costs of programs and projects benefiting a TIRZ and the actual costs of remediation, preservation, or demolition of public or private buildings become TIF eligible.
  • A TIRZ may be established on undeveloped land.
  • Cities with a population of 100,000 or more can designate up to 25% of its appraised value in a TIRZ rather than 20% under the previous law.  For Cities with less population, the percentage increases from 10% to 50%.
  • New TIRZ designation rule allows the percentage of residential property in the proposed TIRZ to increase from 10% to 30%.

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