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REV June 2022 <br /> The TIRZ Concept Generally <br /> A tax increment reinvestment zone ("TIRZ") is a financing tool created by the State Legislature to <br /> assist cities and counties in developing or redeveloping unproductive, underdeveloped or blighted <br /> areas. <br /> Cities may create a TIRZ where conditions exist that substantially impair an area's sound growth and <br /> where development or enhancements financed by the TIRZ significantly enhance the value of all the <br /> taxable real property in a TIRZ and of general benefit to the city or county. <br /> Prior to creation, the statute requires preparation of a preliminary project plan and reinvestment <br /> zone financing plan outlining specific projects to address the existing conditions and the method and <br /> means to finance those projects. <br /> Upon creation, the total appraised value of real property located in a TIRZ is established for the year <br /> in which it was created.This is known as the base value. As new development occurs in a TIRZ, the value <br /> of real property increases. <br /> This additional value above the base value is known as the tax increment. Such tax increment is <br /> typically set aside to finance improvements within a TIRZ including public infrastructure. Once all <br /> projects are complete or after a defined period of time, a TIRZ is dissolved. <br /> During the life of a TIRZ, a city and other participating taxing jurisdictions collect tax revenue on the <br /> base value of a TIRZ as well as sales and use tax revenue generated by new development (unless a city <br /> or county agrees that sales tax and use revenue are also part of the increment). When a TIRZ is <br /> dissolved, a city and other participating taxing jurisdictions collect tax revenue on the tax increment <br /> value created by new development as well. <br /> dinert New <br /> -oje <br /> � w St �e�e�o4 PTotaltAV nowt/ <br /> Incremental AV <br /> eagea Incremental real belongs to all <br /> r Property tax <br /> l belongs to TIRZ to taxing <br /> Pay <br /> project costs dlStl'ICYS In <br /> project area <br /> Base AV <br /> AV belongs to all taxing districts in project area <br /> le <br /> 5-Year TIRZ <br /> Created Terminated <br /> City of San Marcos <br /> Zone No. S Project Plan and Financing Plan 3 <br />