What is a TIRZ and how does it work?

Governed by Chapter 311 of the Texas Tax Code, a TIRZ is a form of tax increment financing to incentivize both development and redevelopment and promote growth in areas that would otherwise not attract sufficient market development in a timely manner. A TIRZ is not an additional tax. Instead, it establishes a “base tax value” for a designated geographic area when the Tax Increment Reinvestment Zone is created. Once that base tax value is established, a TIRZ reallocates some or all of the additional ad valorem property taxes in the zone.

The City currently has only one active TIRZ: Reinvestment Zone No. 3, Andrews, TX. The City of Andrews, Andrews County, and the Andrews County Hospital District are all participating entities in the TIRZ.  When the TIRZ was created in December 2023, a calculation was made totaling all the participating entities' ad valorem tax for the properties within the zone. This amount is commonly referred to as the TIRZ's “base tax value.”  As properties in the zone develop and increase in value, property taxes collected over and above that “base tax value” number go directly into the TIRZ fund. Those TIRZ property taxes can only be used within the TIRZ, and can be used for infrastructure, streetscaping, or practically any type of public enhancements to the zone.