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HB 2878

Relating to the use of revenue in the tax increment fund for certain tax increment financing reinvestment zones for the acquisition, construction, or reconstruction of an educational facility.

89th Legislature (2025) Introduced by Ryan Guillen

Texas bill expands tax increment financing districts' authority to fund school facility construction, redirecting property tax increment revenue toward educational infrastructure projects.

Referred to Ways & Means
#education--primary&secondary--facilities(i0241) #education--primary&secondary--finance(i0250) #reinvestmentzones(s0342) #taxation--property-miscellaneous(i0797) #taxation--schooldistrict(i0785)
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Bill Summary · HB 2878

Legislative bill overview

HB 2878 allows tax increment financing (TIF) districts in Texas to use accumulated revenue funds for acquiring, constructing, or reconstructing educational facilities. This expands the permitted uses of TIF revenue beyond typical infrastructure and economic development projects to include school buildings and related educational infrastructure.

Why is this important

Tax increment financing districts capture increases in property tax value to fund local improvements. Enabling educational facility funding could help address school infrastructure needs in developing areas, potentially reducing burden on school district budgets. However, it diverts TIF revenue that might otherwise support other community infrastructure or be returned to taxing units.

Potential points of contention

  • Funding competition: TIF revenue designated for education reduces resources available for other infrastructure priorities (roads, utilities, public facilities) that districts may have planned
  • School district authority: Questions about whether local education authorities should have input on facility decisions made by TIF entities, which operate under different governance structures
  • Revenue impact on taxing units: Schools and other local entities that receive TIF tax revenue may experience reduced allocations if funds are committed to facility construction instead

Compiled from official sources — confirm details with the bill’s official record.

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