Special Assessments and Other Incentives

North American Free Trade Agreement (NAFTA) Impact Zones

Chapter 379, Local Government Code

NAFTA Impact Zones are intended to promote business opportunities for local businesses within the zone; increase economic development within the zone; or promote employment opportunities for residents within the zone.

A NAFTA Impact Zone must be located in an area where the present condition substantially arrests or impairs the city’s growth, retards the provision of housing, or constitutes an economic or social liability to public health, safety, morals or welfare; an area that is predominantly open, and because of obsolete platting, deteriorating structures or other factors, substantially impairs or arrests the growth of the city; an area that is in a federally-assisted new community located in a home rule city or in the area im-mediately adjacent to a federally-assisted new community in a home rule city; entirely in an area that meets the requirements for federal assistance under Section 119 of the Housing and Community Development Act of 1974; or reasonably likely, as a result of designation as a NAFTA Impact Zone, to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would be a benefit to the property and that would contribute to the economic development of the city.

For property within a NAFTA Impact Zone, a city may use the following:

• Building Fee Waiver—waive or adopt fees related to the construction of buildings in the zone, including inspection and impact fees;
• Municipal Sales Tax Refund and Abatement Agreements—offer sales tax refund or municipal sales tax abatement agreements, not to exceed 10 years;
• Property Tax Abatement—abate municipal property taxes on property located within the zone subject to the 10-year duration limit; or
• Environmental Goals—set baseline performance standards to encourage the use of alternative building materials to address concerns related to the environment or to building costs, maintenance or energy consumption.

NAFTA Impact Zones are created and administered locally.