ENHANCED ENTERPRISE COMMUNITY |
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Additional Incentives |
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For advice on the suitability of these programs for your project, contact the offices noted below. Be prepared to provide the basic parameters on your proposed investment.
Texas Enterprise Zone Program
Under the Texas Enterprise Zone Act, a business must apply for and receive a nomination from the City Council to the Texas Department of Economic Development, who will competitively score the project. A limited number of projects are approved by the State on a quarterly basis. The EZ project must meet state requirements for a "qualified business": (1) active in the Enterprise Zone/EEC, and (2) having at least 25% of the new employees who are residents of an Enterprise Zone, or are economically disadvantaged. The following incentives are available to State -designated Enterprise Projects: (1) refund of State sales or use taxes, (2) franchise tax reductions, (3) priority for Smart Job funding, and (4) locally approved incentives such as tax abatements or utility rate reductions.
CONTACT: City of Houston Department of Planning & Development, Rene Martinez, 713.837.7970 or visit the web site at: www.houstontx.gov/planning and view the section "Economic Development."
Houston Tax Abatement Ordinance
Under the City of Houston Tax Abatement Ordinance (Chapter 44 of the Code of Ordinances), companies who plan to make improvements to real property and create new permanent jobs may be eligible to apply for an abatement of property taxes on those improvements. Applicants must meet certain minimum investment standards and must be willing to enter into contractual agreement with the taxing jurisdiction. A public hearing and a vote of approval by City Council is required. This abatement is for a maximum of ten (10) years. A single application may be filed with both the City of Houston and Harris County.
In addition, new amendments to the Tax Abatement Ordinance make property tax abatements available to two additional investment categories in the EEC: (1) BROWNFIELD DEVELOPMENT ABATEMENTS available for investments made subject to a "voluntary cleanup agreement under Section 361.606 of the Texas Health and Safety Code" and located in a reinvestment zone, and (2) RESIDENTIAL DEVELOPMENT ABATEMENTS for certain residential development facilities containing a minimum of three residential buildings. The brownfields development abatement is for a maximum of four (4) years: the residential development abatement is for a maximum of seven (7) years.
CONTACT: City of Houston Department of Planning & Development, Rene Martinez, 713.837.7970, or visit the web site at: www.houstontx.gov/planning and view the section "Economic Development".
Revenue Bond Financing
The City of Houston has established three (3) special purpose corporations with the authority to issue private activity revenue bonds for large capital investments in the following specialized areas. (NOTE: These programs may be limited to certain qualified uses, subject to State and Federal Regulations, and/or subject to the marketability of the bonds.)
Houston Higher Education Finance Corporation - provides financing for qualified owned by accredited post secondary institutions and/or private secondary schools. Eligible projects are limited to land, buildings, and equipment.
Houston Health Facilities Development Corporation - provides financing for qualified health facilities. Eligible projects must improve the adequacy, cost and accessibility of health care in Houston. Under the current tax code, eligible borrowers are limited to non-profit corporations. HFDC financing costs are limited to land, buildings, and equipment.
Houston Industrial Development Corporation - provides financing for manufacturing and industrial projects. Projects may be anywhere within the corporate limits of Houston and must meet legal requirements defining tax-exempt facilities. Commercial projects are no longer eligible. The ceiling on bond financing is $10 million with some exceptions. HIDC financing offers up to 100% financing. below market interest rates and negotiable term. Eligible uses of funds are limited to land, buildings. and equipment.
CONTACT: Housing and Community Development Department, Assistant Director of Finance, 713.868.8300.
Historic Structures Tax Exemption
The City of Houston may grant a tax exemption to qualified property owners who improve designated historic properties. A property owner who has been denied a Certificate of Appropriateness is not eligible for a tax exemption. The exemption applies for five (5) years when granted by the City. If combined with other tax entities, the exemption period may apply for up to ten (10) years.
CONTACT: Department of Planning & Development, Randy Pace 713.837.7796; or at the following web site: www.houstontx.gov/planning.
Brownfields Tax Credit
Developers of brownfield sites will be able to expense the cost of certain environmental remediation expenditures in the year the remediation is done. The expenditure must be incurred in connection with the abatement or control of hazardous substances at a qualified contaminated site. In addition, owners of property may apply for a brownfield property tax abatement (see Houston Tax Abatement Ordinance) or for environmental cost deductions (see Federal Tax Incentives).
CONTACT: For more information, contact the Environmental Protection Agency at 1.800.424.9346 or visit the EPA Brownfield web site at www.epa.gov/brownfields.