By Patti Jones
A CETRZ (County Energy Transportation Reinvestment Zone) is a specific contiguous zone, in a county that is determined to be affected because of oil and gas exploration and production activities, around a planned transportation project that is established as a method to facilitate capture of the property tax increment arising from the planned project.
Whew, that’s a mouthful! Since all counties in the State of Texas were notified as to their minimum grant award in early December 2013, Commissioners Courts have been in high gear to meet the application deadline period of Feb. 7-Feb. 14.* As outlined in Senate Bill 1747 and TxDOT rules, grant funding to each county was determined according to the following formula: 20 percent to weight tolerance permits, 20 percent to oil and gas production taxes, 50 percent to well completions, and 10 percent to volume of oil and gas waste injected. The methodology and data used to develop the allocations under the formula were determined by the Texas Department of Motor Vehicles, the Texas Comptroller of Public Accounts, and the Railroad Commission of Texas.**
I am sure all of you have had your public hearing on the creation and benefits of the zone, as we have done in Lubbock County. The order or resolution of the Commissioners Court designating an area as a CETRZ must include a list of specific geographic areas/parcels; provide that the zone take effect upon adoption of the order or resolution and determine that the base year be the same as that when the order/resolution was passed or some year in the future; dedicate or pledge all of the increase in the appraised value of real property located in the CETRZ to those projects; and establish an ad valorem tax increment account for the zone. Upon implementation, counties need to make a determination of CETRZ financing and establish mechanisms for funding/partnerships. At this point in the process each county should establish a monitoring system of the CETRZ to optimize revenue and payment streams.**
Even though the process has been swift and full of “what ifs,” the
83rd Texas Legislature heeded our pleas and concerns about damage to county roads, and now it’s up to our counties to put this money to good use.
See some of you at the V.G. Young Institute School in College Station!