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Smith County, TexasPublic Hearing on Formation

of Transportation Reinvestment Zone

November 15, 2013

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Background and Purpose•Authorized by the 80th Legislature in 2007 through the enactment of Senate Bill 1266

•Significantly improved and expanded by the 82nd Legislature in 2011 (HB 563 / SB 1420) and 83rd Legislature in 2013 (SB 1110)

•Provides a mechanism for local governments to generate funding for a project that is derived from the economic growth resulting from the project.

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What is a TRZ?• Contiguous geographic area in the jurisdiction of a city or county

• Allows a city or county to dedicate a portion of future tax revenues to the project

• Can capture incremental ad valorem and/or sales tax revenue within a zone

• Not a tax increase

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Generation of TRZ Funds

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Statutory Purposes of a TRZ• Promote public safety

• Facilitate the development or redevelopment of property

• Facilitate the movement of traffic

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Why Form a TRZ• Accelerates the funding and delivery of projects

• Faster delivery of projects results in: Increased economic development activity Improved congestion, safety, mobility, air quality,

quality of life

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Formation – Public Hearing• County must hold a public hearing at least 30 days before

it designates the TRZ

• At least 7 days prior, notice of the hearing must be published in the newspaper

• Interested persons are permitted to speak for or against the designation of the TRZ and/or its boundaries

11/15/2013 After 12/15/201311/7/2013

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Formation – Findings and Resolution• Required Findings area within the zone is underutilized and underdeveloped creation of the TRZ will further statutory purposes (i.e. promote

safety; facilitate development or redevelopment of property; facilitate movement of traffic)

promote a transportation project

• County must adopt a resolution designating the TRZ

• The resolution must: describe the boundaries of the TRZ provide for effective date and designate the base year establish a tax increment account

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Termination of a TRZ•TRZ or abatement terminates on:1. December 31 of the year in which the county

complies with any contractual requirement regarding the pledge of money generated by (or through) the TRZ; OR

2. December 31 of the 10th year, if before that date the county has not used the zone for the purpose for which it was designated.

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Toll 49 – Project Support•TRZ is proposed to fund additional expansion of Toll 49

•Toll 49 owned* and operated by the NET RMA

•Smith County TRZ proceeds remain in Smith County•Smith County not selling bonds or incurring debt (constitutional prohibition against county tax increment financing)

* Formal transfer process almost complete

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Smith County TRZ Toll 49

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