According to a report from Director of Planning and Development Craig Farmer, tax increment financing is a tool that local governments can use to publicly finance needed improvements to infrastructure and buildings within a designated area known as a reinvestment zone. Those public infrastructure improvements will promote new, private construction and investment within the district.
The cost of the public improvements to the reinvestment zone is repaid by the future tax revenues from the improvements, not from existing property values. Each taxing unit can choose to dedicate all, a portion of, or none of the tax revenue gained as a result of improvements within the 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.
Once a city has begun the process of establishing a tax increment financing reinvestment zone, other taxing units are allowed to consider participating in the tax increment financing agreement. These zones are commonly referred to as either a tax increment financing (TIF) zone or a tax increment reinvestment zone (TIRZ).
There is a multi-step process by which a taxing unit can establish a tax increment financing zone. The statutes governing tax increment financing are located in chapter 311 of the Texas Tax Code.
The council would need to bring the item back in the future for action, if any is needed.
The meeting will begin at 6:30 p.m. at City Hall.