Tax Abatement Program

Overview

On May 25, 2023, the Baytown City Council adopted Resolution No. 2843, electing to participate in tax abatements under the Texas Property Redevelopment and Tax Abatement Act. This resolution formalized the City’s commitment to supporting reinvestment and job creation through a structured tax incentive program. The adopted Guidelines and Criteria provide the foundation for granting tax abatements to qualifying projects within Harris County or Chambers County reinvestment zones.

Program Objectives

  • Attract and retain primary jobs in targeted industries
  • Encourage environmentally responsible LEED®-certified development
  • Support modernization and expansion of existing businesses
  • Ensure fairness to existing taxpayers and local jurisdictions
  • Promote regional cooperation and responsible variance procedures

Abatement Structure

  • Year 1: 100%
  • Year 2: 80%
  • Year 3: 70%
  • Year 4: 60%
  • Year 5: 50%
  • Year 6: 0%

Eligible Facilities

  • Manufacturing
  • Service & Distribution
  • LEED® Certified Office Building
  • Regional Entertainment
  • Research and Development
  • Class "A" Office
  • Other Basic Industry

Authorized Investments

  • New facilities
  • Expansion
  • Modernization


Economic Criteria

To ensure meaningful economic impact and responsible use of public incentives, all tax abatement projects must meet a set of minimum thresholds. These criteria help the City of Baytown prioritize developments that contribute to long-term growth, job creation, and community benefit.
  • $5 million minimum investment
  • Creation or retention of at least 5 full-time jobs
  • No serious adverse effect on jurisdictions
  1. Abated
  2. Not abated

Abated Property

This section outlines the types of property improvements that may qualify for tax abatement under Baytown’s adopted guidelines:

  • Buildings and structure
  • Fixed machinery and equipment
  • Site improvements
  • Office space to administer plant
  1. Application Process

Application Process for Tax Abatement

Any current or prospective owner of taxable property within the City of Baytown may initiate a request for tax abatement or the creation of a reinvestment zone by submitting a formal written request to the City. This request begins the City’s evaluation of whether a proposed project aligns with the established guidelines and criteria for tax abatement participation.

To be considered, applicants must submit a complete application package, which includes the following components:

  • A general description of the new improvements proposed for the property
  • A detailed list describing the type, number, and location of all planned improvements, along with the anticipated economic life of each improvement
  • A statement identifying whether any of the improvements may qualify for exemptions under Texas Commission on Environmental Quality (TCEQ) guidelines (if known)
  • A legal description and map of the property where the project will take place
  • A timeline outlining when the improvements are expected to begin and be completed
  • A clear explanation of why the tax abatement is necessary to move the project forward in Baytown
  • A certification of current employment levels, broken down by category (full-time, part-time, and contract employees), of all staff employed in Baytown at the time of submission

For projects that will occur within a leased facility, the application must also include the lessor’s name and address, and a copy of the executed lease or option contract, if available.

In the case of modernization projects, applicants are required to submit the most recent assessed value of the facility. This information should be itemized for both real and personal property and must reflect the tax year immediately preceding the application date.

The City may also request additional financial or operational information as needed to assess the project’s viability and alignment with public goals. Once a complete application has been received, the City Manager or a designated staff member will notify the governing bodies of all eligible taxing jurisdictions involved.

The City will then conduct a formal review to determine whether the application meets the eligibility requirements set forth in the guidelines. This review process may be conducted by City staff or delegated to a specific department. If the project qualifies, the applicant will be notified in writing. This notice will be contingent upon a public hearing (if required) and formal City Council approval of a tax abatement agreement.

It is important to note that the City will not approve any tax abatement request if the application is submitted after construction or site preparation has begun. All applications must be received prior to the start of any physical development activity on the site—including grading, foundation work, or equipment installation.

Applicants seeking an exception to specific eligibility rules may submit a written request for variance to the City Manager. Such requests must include a detailed explanation justifying the need for deviation. Any approval of a variance is subject to a three-fourths vote by the Baytown City Council, and in all cases, the duration of a tax abatement shall not exceed five (5) years.

  1. Public Hearing and Approval process

Public Hearing and Approval

Before a reinvestment zone can be designated or a tax abatement agreement approved, the City of Baytown follows a formal public process to ensure transparency and accountability.

Reinvestment Zone Designation

City Council must hold a public hearing to evaluate whether the proposed improvements are feasible, practical, and beneficial to both the designated area and the City after the abatement period ends.

  • Public notice must be published at least 7 days in advance in a local newspaper.
  • Written notice must also be sent to the presiding officer of every taxing unit that has jurisdiction over the property.

During the hearing, the public is welcome to speak or submit evidence for or against the designation.

Abatement Agreement Approval

The City Council must provide 30 days' notice before considering approval of a tax abatement agreement. The notice must include:

  • Name of the property owner and applicant
  • Location of the reinvestment zone
  • General description of the proposed improvements
  • Estimated cost of the improvements

Council may also hold an optional hearing to receive public input on the agreement itself.

Council Findings & Vote

To approve an agreement, the Council must find:

  • The project meets all guideline requirements
  • There will be no negative impact on services or tax base
  • The project poses no threat to public safety or health

Any application requesting a variance from the guidelines must receive approval by a three-fourths vote of the City Council.