The city will, on a case-by-case basis, consider providing tax abatement as a stimulus for economic development. It is the policy of the city that said consideration will be provided in accordance with the procedures and criteria outlined in this document. According to the Property Redevelopment and Tax Abatement Act, V.T.C.A. Tax Code, Ch. 312, the city may grant a tax abatement for either a new facility, or an expansion or modernization of an existing one. Only commercial, or industrial projects are eligible under the city's tax abatement program; oil and gas development are not. Tax abatements shall only be available on the increment in value added to a particular property by a specific development proposal which meets the economic goals and objectives of the city.
The tax abatement shall not apply to any portion of the inventory or land value of the project. Tax abatement may be offered on improvements to real property owned by the applicant and/or on eligible new personal property brought to the site by the applicant. Projects which are developed involving leased real or personal property shall be governed under special terms and conditions which may be set forth in the agreement governing each specific tax abatement. Nothing herein shall imply or suggest that the city is under any obligation to provide tax abatement to any applicant. All applicants shall be considered on a case-by-case basis.
Tax abatements do not reduce existing local property taxes and do not cause a loss of revenue. Instead, they offer a temporary limit on future taxes for a facility not yet built or for expansion of an existing facility which meets the criteria of this policy.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)
Tax abatements will only be provided to properties which are within a tax reinvestment zone created by the city which may be designated by the city commission. Any request for tax abatement shall be reviewed by the city manager who may, in his discretion make recommendations regarding the creation of a tax reinvestment zone and providing an abatement of taxes pursuant to Chapter 312 for economic development purposes to the city commission. The city manager's recommendation shall be based upon a subjective evaluation of job creation, additional taxable value created, other incentives provided by the city, length of time to recover value of all incentives provided through property taxes, and community impact. The city commission shall, at all times, retain full and unfettered discretion to approve or reject any application for tax abatement.
The applicant may be requested to address the following criteria in narrative format.
(1) 
A minimum capital investment in building and inventory of $5,000,000.00 or more.
(2) 
A summary of real and personal property value added to the tax roll; direct sales tax generation from either purchases or sales by the applicant; community and applicant investment in infrastructure; projected annual facility generating budget, whether the applicant proposes new construction, rehab or reuse of existing buildings, or some combination. This information must be provided in sufficient detail to accommodate an analysis of the fiscal impact on the community.
(3) 
A breakdown of types and number of jobs along with total annual payroll in sufficient detail that wages per employee can be analyzed relative to existing average wage trends in the community.
(4) 
Identify potentially relocated employees, along with projected employment from the local or regional labor market, including any plans for enhancing local hired job skills and resultant wage-earning capacity.
(5) 
Describe project environmental impacts upon beginning operations to include air, noise, and water.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)
Once a determination has been made that a tax abatement may be considered, the value of the abatement will not exceed the tax increase created by the increased value of the improvements on the property from the base year. Furthermore, the term of the abatement will not exceed a term of five years and subject to the limitations provided in the following table and also those limitations set forth in the Texas Tax Code.
Years of Abatement
Percent of Abatement
1
100%
2
80%
3
60%
4
40%
5
20%
Any tax abatement granted on a project shall become effective on January 1 of the year following the issuance of a certificate of occupancy (CO) unless otherwise specified in the tax abatement agreement.
Any person, organization or corporation desiring that Harlingen consider providing tax abatement to encourage location or expansion of operations within the city limits of Harlingen shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that Harlingen is under any obligation to provide tax abatement in any amount or value to any applicant.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)
(a) 
Any present or potential owner in the city may request a tax abatement by filing a written request with the city manager.
(b) 
The application shall consist of a complete application form accompanied by a nonrefundable application fee in the amount of $1,000.00, and, unless otherwise provided herein:
(1) 
A general description of the new improvements to be undertaken;
(2) 
A descriptive list of the improvements for which abatement is requested;
(3) 
A list of the kind, number and location of all proposed improvements of the property;
(4) 
A map and legal description of the property;
(5) 
A time schedule for undertaking and completing the proposed improvements;
(6) 
Financial information, including but not limited to items (i) demonstrating the role of property tax costs in the economics of the proposed improvements, (ii) stating concisely the amounts and sources of financing for the proposed improvements including all sources and terms of debt and equity financing, and (iii) demonstrating the overall financial impact of the proposed improvements on the local and regional economic using reliable economic forecast modeling tools in such form as requested by the city manager;
(7) 
A statement by the applicant setting forth that the applicant is willing to be annexed into the city, if not presently located within the city limits; and
(8) 
A statement describing how the proposed improvements are consistent with this general policy.
(c) 
Applicant shall submit a cover letter describing the project, its expected benefits to the community, other impacts on the community, any incentives requested or approved by the Harlingen Economic Development Corporation, and any additional information pertinent to the project.
(d) 
Applicant shall prepare a plat showing the precise location of the property, and all roadways within 500 feet of the site.
(e) 
If the property is described by metes and bounds, a complete legal description shall be provided.
Applicant shall complete all forms and information detailed in items (a) through (e) above and submit them to the city manager, City of Harlingen, Texas.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)
(a) 
All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed.
(b) 
The application will be distributed to the appropriate city departments for internal review and comments. Additional information may be requested as needed.
(c) 
Copies of the complete application package and staff comments will be provided to the city commission.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)
(a) 
The city commission will consider the application at a regular or called meeting(s). Additional information may be requested as needed.
(b) 
The city commission of Harlingen may consider a resolution calling for a public hearing to consider establishment of a reinvestment zone and the provision of a tax abatement in compliance with the Texas Tax Code.
(c) 
The city commission of Harlingen may hold the public hearing and determine whether the project is "feasible and practical and would be of benefit to the land to be included in the zone and to the municipality."
(d) 
The city commission may consider adoption of an ordinance designating the area described in the legal description of the proposed project as commercial/industrial reinvestment zone.
(e) 
The city commission may consider adoption of a resolution approving the terms and conditions of a contract between the city and the applicant governing the provisions of the tax abatement.
(Ordinance 2022-21, § 2(Exh. A), adopted 5/4/2022)