Harris County Ad Valorem Tax Abatement Guidelines-Summary

Harris County projects that may qualify for reinvestment zone and property tax abatement include the following types of facilities’:  manufacturing, research, regional distribution, regional service, regional entertainment, research and development or other basic industry. Abatement may be granted for new facilities, expansion of existing facilities, or the improvement to existing facilities having the effect of improving current economic conditions.  Eligible property may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements plus the office space and related fixed improvements necessary to the operation and administration of the facility.   Ineligible investments include:  land; inventories; supplies; tools; furnishings, and other forms of movable personal property; vehicles; vessels; aircraft; housing; hotels accommodations; retail facilities; deferred maintenance investments; property to be rented or leased except as provided in the tax abatement policy; property which has a productive life of less than 15 years; property owned or used by the State of Texas or its political subdivisions or by any organization owned, operated or directed by a political subdivision of the State of Texas or any property exempted by local, state or federal law.   Projects may be eligible for abatement of new value subject to an abatement cap:  to be calculated as $1,000,000 per job created/retained times the number of such jobs   Such cap shall not exceed the increased value requirement as set out in the abatement agreement, and will adjust annually.  The abatement amount each year is determined by the adjusted cap being multiplied by 50% in each year up to a total period of 10 years and five years for research and development projects.   Minimum investment is $1,000,000 in new increased value upon completion of the contractually defined “construction period,”  Criteria for jobs:  the project must be shown to directly create or prevent the loss of permanent full-time employment for at least 25 people and five people for research development projects  within the reinvestment zone upon completion of the contractually-defined ”employment period”.  The project must also be “competitively sited and must be shown not to solely or primarily have the effect of transferring employment from one part of Harris County to another.  Additionally, company history with compliance with state and federal environmental laws and worker safety laws are taken into consideration.   Katy Area EDC can assist the Company in preparing the application for submission to the Harris County Community Services Department.