Tax Increment Financing (TIF)

Texas Tax Code Chapter 311 gives Cities the authority to create these special districts, one of the most effective key economic development tools in the State. The City of Garland has two tax increment financing (TIF) districts to promote the development and redevelopment of the following key geographic areas:

How TIFs Work

The tax year in which City establishes the TIF sets the real property and/or sales tax assessed value base (base year).  For each year in the life of the TIF, a special fund captures the tax revenue (either or both real property and sales) generated from the difference between the base year assessed value and that year’s assess value.  Other taxing districts except for school districts can choose to direct all or a portion of their tax revenues into the TIF.

A TIF District board of directors (TIF Authority) chooses how to spend the money captured in the TIF fund.  TIF funds can only pay for a specific menu of eligible projects. When the TIF expires, all assessed value revenues are paid to the respective taxing districts like before the TIF was designated.  The illustration below depicts how a TIF district works.

How TIF District Works

TIF-eligible Projects

  • Project costs related to the cost of buildings, schools or other educational facilities owned by or on behalf of a school district, community college district or other state political subdivision.
  • Railroad or transit facilities.
  • Affordable housing.
  • Remediation of conditions that contaminate public or private land and buildings.
  • Preservation of the façade of a private or public building.
  • Demolition of public or private buildings.
  • TIF administration fees.
  • Financing costs, including interest and payments to TIF bond holders.
  • Land acquisition, capital costs and interest before and during construction related to the acquisition and construction of public works of public improvements (streets, streetscape enhancements, utility infrastructure, alleys, sidewalks, parking garages).
  • Land assembly costs for projects listed above.