CC Resolution No. 3012RESOLUTION NO. 3012
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, REPEALING RESOLUTION NO. 2389 ADOPTED BY THE CITY
COUNCIL OF THE CITY OF BAYTOWN ON DECEMBER 10, 2015;
ESTABLISHING INDUSTRIAL DISTRICT POLICIES APPLICABLE TO
COMPANIES THAT DID NOT HAVE AN INDUSTRIAL DISTRICT
AGREEMENT WITH THE CITY OF BAYTOWN IN EFFECT ON
JUNE 26, 2025; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
WHEREAS, orderly economic growth raises the standard of living and otherwise improves
the quality of life for the community as a whole; and
WHEREAS, the Baytown area has a number of industrial establishments; and
WHEREAS, it is to the mutual advantage of industries and municipalities to cooperate
whenever possible for the general advancement of the affected population; and
WHEREAS, it is generally recognized that industries within the City's Industrial Districts
should compensate the City of Baytown recognizing their limited use of municipal services, but
realizing that industries derive benefits, both direct and indirect, from municipal services; and
WHEREAS, the City Council, having previously created Industrial Districts, desires to
continue with contractual arrangements with New Companies situated in the Industrial Districts in
the City's extraterritorial jurisdiction, as provided for in the Texas Local Government Code,
Section 42.044; and
WHEREAS, the industrial district policies included herein are designed to treat New and
Existing Companies engaging in like industries equally, to impose uniformly and consistently
contractual provisions on all New and Existing Companies engaging in like industries so as to
generate equitable revenues and to set uniform standards and regulations, and to provide New
Companies a limited immunity from annexation;
WHEREAS, the City Council may consider the industrial district policies included herein
and any and all other factors when considering to enter into an agreement with a New Company;
NOW THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:
Section 1: That the facts and matters set forth in the recitals of this Resolution are
hereby found to be true and correct and are herein adopted by the City Council of the City of
Baytown.
Section 2: That the City Council of the City of Baytown hereby repeals Resolution No.
2389 adopted by the City Council of the City of Baytown on December 10, 2015, and declares
said resolution to be without force and effect.
Section 3: The following definitions apply to this policy, except where the context
clearly indicates a different meaning:
ADDED VALUE means the fair market value as determined by the Harris Central Appraisal
District or Chambers County Appraisal District, whichever is applicable, of all of the New
Company's land and all other tangible property, real, personal or mixed, within the affected
area on January 1 of each year in which an Industrial District Payment is due hereunder
minus the Base Year Value.
BASE YEAR VALUE means the fair market value as determined by the Harris Central Appraisal
District or Chambers County Appraisal District, whichever is applicable, of all of the New
and Existing Company's land and all other tangible property, real, personal or mixed,
within the Industrial District:
(1) if there is no planned improvement during the contract term, the fair market value
as determined by the Harris Central Appraisal District or Chambers County
Appraisal District, whichever is applicable, of all of the New and Existing
Company's land and all other tangible property, real, personal or mixed, within the
Industrial District:
(a) on January 1, 2009, or
(b) on January 1, 2016, or
(c) on January 1, 2025, or
(d) as most recently certified by the chief appraiser of the appraisal district as
of the date of the Industrial District Agreement,
whichever is greater; or
(2) if there is a Planned Improvement during the contract term at the time of the
execution of the Industrial District Agreement, the greater of (1)(a) through (d)
above plus an agreed upon value based upon the value of any Planned
Improvements throughout the term of the Agreement.
EXPANSION means the addition of buildings, structures, or fixed -in -place machinery and
equipment for purposes of increasing production capacity.
IMPROVEMENT means:
(1) a building, structure, fixture, or fence erected on or affixed to land;
(2) a transportable structure that is designed to be occupied for residential or business
purposes, whether or not it is affixed to land, if the owner of the structure owns the
land on which it is located, unless the structure is unoccupied and held for sale or
normally is located at a particular place only temporarily; or
(3) for purposes of an entity created under Section 52, Article III, or Section 59, Article
XVI, Texas Constitution, the:
(a) subdivision of land by plat;
(b) installation of water, sewer, or drainage lines; or
(c) paving of undeveloped land.
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INDUSTRIAL DISTRICT means that area in the City's extraterritorial jurisdiction designated by
the City as an industrial district.
INDUSTRIAL DISTRICT AGREEMENT means the agreement incorporated herein in Section 7
or as applicable.
NEW COMPANY means a new or existing company that owns Real Property within an Industrial
District of the City, which Real Property was not subject to an Industrial
District Agreement with the City of Baytown prior to June 26, 2025.
LEASED FACILITY means: If a leased facility is granted a PILOT, then the Agreement shall be
executed with both the lessor (property owner) and the lessee.
LIMITED PURPOSE ANNEXATION means: (LPA) allows a city to annex land for regulatory
purposes (such as zoning and building codes) without fully incorporating the area into the city
limits for general governmental services and taxation.
LOCAL OPTION SALES TAX refers to a sales and use tax authorized under the Texas Tax Code,
which may be adopted by a city and/or other local taxing jurisdictions through voter approval. This
tax is levied in addition to the State sales tax and may be dedicated to specific purposes, including
but not limited to economic development (pursuant to Chapters 504 and 505 of the Texas Local
Government Code), street maintenance, public safety, or property tax relief. For the purposes of
this policy, any applicable Local Option Sales Tax shall be considered in evaluating the overall
fiscal impact and public benefit of an Industrial District Agreement (IDA).
LOGISTICS means warehousing, distribution, logistics, storage and similar operations, including,
but not limited to, those associated with North American Industry Classification System
("NAICS") Codes 493110, 493120, 493130, and 493190, whose value of Situs Inventory
exceeds the value of the New and Existing Company's Real Property subject to the
Industrial District Agreement.
NON -LOGISTICS means not Logistics, including manufacturing
MANUFACTURING means the process of producing finished goods from raw materials,
components, or parts through various means such as mechanical, chemical, or biological
processes. This process encompasses all stages of production, including:
Manufacturing (heavy) means the mechanical or chemical transformation, assembly, fabrication,
packing or other industrial processing of products predominantly from extracted or raw materials,
including, but not limited to uses that have potentially significant external effects due to the
involvement of hazardous materials or commonly recognized offensive conditions such as the use
of flammable, toxic, explosive, or radioactive materials. The term includes the incidental storage,
sales, and distribution of such materials.
Manufacturing (light) means the mechanical or chemical transformation, predominately from
previously prepared materials, of finished products or parts, including processing, fabrication,
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assembly, treatment, and packaging of such products; and incidental storage, sales, and distribution
of such products.
PAYMENT IN LIEU OF TAXATION (PILOT) means: a negotiated payment made by a property
owner to the City in lieu of ad valorem property taxes. The amount, terms, and duration of
the PILOT shall be established in accordance with this Agreement and applicable laws,
ensuring a mutually beneficial arrangement that supports both public interests and private
investment.
PROCUREMENT AND HANDLING OF RAW MATERIALS: Sourcing, receiving, and storing
raw materials and components required for production.
PRODUCTION OPERATIONS:
Machining, cutting, shaping, or forming materials into parts.
Assembling parts into finished products.
Applying treatments such as coating, painting, or heat -treating.
Conducting quality control and testing to ensure products meet specified standards.
Utilization of Equipment and Labor: Employing machinery, tools, technology, and human labor
in the production process to enhance efficiency and quality.
Management of Production Facilities: Operating and maintaining facilities where manufacturing
activities take place, including factories, plants, and workshops.
Distribution and Logistics: Packaging, storing, and transporting finished goods to distributors,
retailers, or end consumers.
PERSONAL PROPERTY means property that is not Real Property.( "Personal Property" shall
mean all tangible and intangible assets owned by a party, excluding real property. This
includes, but is not limited to:
1. Machinery, equipment, tools, and vehicles.
2. Office furniture, fixtures, and supplies.
3. Inventory, goods, and products.
4. Computers, electronic devices, and accessories.
5. Raw materials and work -in -progress items.
PLANNED IMPROVEMENT means any taxable Real Property Improvement together with New
Company's and Existing Personal Property within the affected area having an assessed
value of more than $5,000,000 but less than $2501000,000. If the planned improvement is
greater than $250,000,000 the City may consider a Chapter 212 Agreement.
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REAL PROPERTY means:
(1) land;
(2) an improvement;
(3) a mine or quarry;
(4) a mineral in place;
(5) standing timber; or
(6) an estate or interest, other than a mortgage or deed of trust creating a lien on
property or an interest securing payment or performance of an obligation, in a
property enumerated in Paragraphs (1) through (5) of this definition.
RESEARCH AND DEVELOPMENT FACILITY means buildings and structures, including fixed
in -place machinery and equipment, used or to be used entirely for research or experimentation to
improve or develop current technology in biomedicine, electronics, clean energy, or pre -
commercial emerging industries.
STRATGEIC PARTNERSHIP AGREEMENT (SPA) means a contract between a city and a
Municipal Utility District (MUD) that allows the city to extend its authority into the district without
full annexation, where a SPA allows a city to collect sales and use tax from businesses in the MUD
without fully annexing the district for all purposes. Allows for potential split in sales tax revenue
between the MUD, City, and private business.
SITUS INVENTORY means the value of the Personal Property and inventory stored or held on or
within the affected property not owned by the Property Owner as assessed by the applicable
appraisal district in a given contract year.
Section 4: It is hereby provided that compensation shall be determined uniformly for
each New Company - Non -Logistics, as follows:
New or Existing Company shall pay the City of Baytown an Industrial District payment on
or before December 31 st of each year during the term of this Agreement, such payment to
be calculated on the basis of the below stated formulas:
Base Value Industrial District
Payment = Base Year Value x Industrial District Rate
Added Value Industrial District Added Value x Industrial District Rate Rate x Added Value
Pavment* Discount
*If the formula used in calculating the Added Value Industrial District Payment produces
a negative number, then the Added Value Industrial District Payment shall be $0.00.
Council may provide New Company a discount on the Added Value Industrial District
Payment Rate if the Added Value is as follows:
Added Value
Discount Rate
$10m-$50m 15%
$50-$ I00m 20%
Over $100m To be determined by Council
Section 5: It is hereby provided that compensation shall be determined uniformly for
each New Company - Logistics, as follows:
New Company shall pay the City of Baytown an Industrial District payment on or before
December 31 st of each year during the term of this Agreement, such payment to be
calculated on the basis of the below stated formulas:
Base Year Value x Industrial District Payment Rate
Base Value Industrial District +
Payment Situs Inventory x Industrial District Payment Rate
Added Value Industrial District Added Value x Industrial District Rate x Added Value
Payment* Industrial District Discount
*If the formula used in calculating the Added Value Industrial District Payment produces
a negative number, then the Added Value Industrial District Payment shall be $0.00.
Each New or Existing Company engaged in Logistics, who leases or otherwise provides space to
another for storage of Personal Property, shall file an information report with the City stating the
name and address of each person to whom the New or Existing Company leased or otherwise
provided storage space on January 1 of each contract year.
Section 6: Each New or Existing Company must agree to give preference and priority
to local manufacturers, supplies, contractors, and labor for the materials and labor for the
construction of Planned Improvements, except where not reasonably possible to do so without
added expense, substantial inconvenience, or sacrifice in operating efficiency. In any such
exception cases involving purchases over $10,000 a justification for such purchase shall be
included in the annual report. Each such New or Existing Company shall further acknowledge that
it is a legal and moral obligation of persons receiving entering into an Industrial District Agreement
to favor local manufacturers, suppliers, contractors and labor, all other factors being equal. For the
purposes of this provision, the term "local" as used to describe manufacturers, suppliers,
contractors and labor shall include firms, businesses, and persons who reside in or maintain an
office in Harris County or Chambers County. In the event of a breach of this buy -local provision,
the Industrial District Payment shall be proportionately increased equal to the amount the
disqualified contract bears to the total construction cost (materials and labor) for the Planned
Improvement. In the event that New or Existing Company contracts the supply and construction
of the Planned Improvement to an affiliate or other non -local contractor, New Company shall
ensure compliance with this section by including in such contract a flow -through provision
requiring such compliance.
Section 7: If a New or Existing Company executes an Industrial District Agreement
with the City, the New Company's property within the area subject to the Industrial District
Agreement should not be annexed by the City unless otherwise necessary to annex property owned
by third parties within an Industrial District. In the event Texas Local Government Code Chapter
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42 is repealed or amended limiting the authority of municipalities to create industrial districts, the
New or Existing Company agrees to voluntary petition for annexation by the City and entering
into an applicable economic development agreement equivalent to the terms of the IDA or City
service agreement.
Section 8: New or Existing Company shall acknowledge and accept as part of the IDA
the portions of the Property that are located in and subject to City certified service areas.
Section 9: This resolution shall take effect immediately from and after its passage by
the City Council of the City of Baytown.
INTRODUCED, WOAD, ANT? P SED by the affirmative vote of the City Council of the
City of Baytown, this the h day of ,,v, 2025.
zz�' --
CHARLE J SON, Mayor
ATTEST:
APPROVED AS TO FORM:
SCOTT LEMOND, City Attorney
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