Magnolia City Council unanimously approved the adoption and implementation of the tax abatement policy used by Montgomery County at its June 10 meeting to help promote economic development and redevelopment within the city limits.

A tax abatement is an exemption of property taxes on improvements to a parcel of land and is used by a city or county as an incentive to promote quality growth by attracting new and larger companies, Montgomery County Judge Alan Sadler said. Tax abatements are also offered to existing businesses looking to expand and companies looking to relocate.

"[Montgomery County's] tax abatement agreements are anywhere from five years to 10 years and anywhere from 50 percent to 100 percent abated based on jobs and revenues added," Sadler said.

The city of Magnolia will adopt the same tax abatement policy used by Montgomery County for the purposes of attracting commercial and residential developments to the city, City Administrator Paul Mendes said.

Magnolia Mayor Todd Kana said adopting the county's tax abatement policy—which other cities in the county are also doing—allows the city to be competitive in attracting businesses, which will help bring in jobs and additional revenue.

"In the event a business wants to come to the city, having this policy will help bring them to Magnolia," Kana said.

Montgomery County is in the process of reviewing its current tax abatement policy—and after review—may update the criteria that determine how abatements are awarded and who receives them.

"The city is aware and following any changes or updates that might be made to the county's tax abatement policy," Mendes said. "The city will update its abatement policy as the county updates theirs and [Magnolia] will adopt whatever changes Montgomery County puts in place."

The tax abatement policy in Montgomery County was renewed in 2013, however, no changes to the policy were made, said J.R. Moore, the county's tax assessor-collector. The county has not adjusted or updated the criteria to the policy since 2008, and the numbers no longer reflect the times, he said. Moore is in the process of researching to determine how the policy should be updated and what recommendations to make to the county commissioners court.