Economic Development
Programs - Industrial Districts
General Information:
The City may annex certain areas, pieces of land that abut against the City’s corporate boundaries. These areas are called extraterritorial jurisdiction (ETJ). This ETJ area appeals to some companies, companies that prefer to remain close to Houston rather than be annexed. Houston allows some of these companies located within industrial areas to participate in an industrial agreement, an agreement that protects the "industrial district" from annexation.
These industrial district agreements guarantee Houston will not annex the area for 15 years. During this time period, companies within the district pay Houston a portion of the City’s improvement value tax and the entire land value tax, taxes paid as if the city annexed the area. On the other hand, the city asks for no permits during the entire 15 year agreement.
Throughout the agreement, companies conduct business in strict compliance with all applicable State and Federal, air, water, and pollution control standards.
The tax percentages for industrial districts fall below:
Asset Category |
HCAD Value |
Contract Value |
Land |
100% |
100% |
Base Year Improvements |
100% |
73.4% |
Construction in Progress |
100% |
Excluded |
New Construction during: |
||
-- 1st through 3rd Years |
100% |
40% |
-- 4th and 5th Years |
100% |
45% |
-- 6th and 7th Years |
100% |
50% |
-- 8 Years and Over |
100% |
73.4% |
Inventory |
100% |
73.4% |
Authorization
Article 11, Section 5 of the Texas Constitution provides for cities in excess of 5,000 population to levy, assess and collect taxes as may be authorized by law or by their charter. Sections 43.136 and 42.044 of the Texas Local Government Code provide for the designation and guidelines for creation of an industrial district by a municipality within its extraterritorial jurisdiction (ETJ).
For more Information please contact us.