Transportation Reinvestment Zones: Texas Legislative History and Implementation

Texas legislation enacted in 2007 created transportation reinvestment zones (TRZs), an innovative tool that allows local governments to raise funds to help pay for transportation improvements using all or part of the incremental growth in property and sales taxes from a designated area around the project. Legislation passed in subsequent legislative sessions has made significant changes to the law, facilitating greater use of the tool by local governments and expanding the scope of possible incremental tax dedication to include local sales tax. This document presents the results of research conducted to evaluate the use of TRZs by local governments throughout the state. This evaluation had three main objectives: (1) Summarize the legal framework, including the modifications made to the framework since it was first adopted; (2) Describe the advantages and limitations of this financing tool through lessons learned during the implementation of municipal and county TRZs throughout the state and documented through interviews with stakeholders; and (3) Develop a model to analyze TRZ opportunities.