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r~ a:. C'I~.T.~ Januazy 10, 2002 VIA HAND DELIVERY Kenneth L. Kammer and Gary W. Kammer K& G Properties, LLP and IS Management, Inc. 2485 Kessler Paris, TX 75460 In re: Inquiries of the Ciry of Paris Gentlemen: You have posed certain questions to the City of Paris and requested the City Council to respond to those inquiries. The substance of those inquiries relates to economic development incentives, presumably as they would apply to your particular proposed project. The City Council subsequently referred your inquiries to this office for response where appropriate. To that end, I will attempt to address your questions in the order in which they were posed to the extent the information necessary to address those questions is available to the City: 1. Ls the PEDC in an advisory capacity only to the City Council? Answer - The Paris Economic Development Corporation is a statutory corporation created pursuant to the provisions of the Development Corporation Act of 1979, Texas Civil Statutes Ar6cle 5190.6. The PEDC is customarily referred to as a"4A" corporation in that it was created pursuant to Section 4A of the Act, as opposed to Section 4B of the Act. , As a 4A corporation, PEDC is empowered to grant a number of economic development incentives on its own initiative and in that sense the PEDC is not in an advisory capacity to the City Council. One of the economic incentives authorized under state law is tax abatement. Tax abatement authorizes taxing entiUes to enter into agreements with qualified entides to abate the taxes on new property value; that is, on new or expanded real property improvements that would otherwise be subject to property tax. As a consequence, tax abatements can only be granted by taxing entities; that is, entities which -I- P.O. BOX 9037 • PARIS, TEXAS 75461 •9037 •(903) 785-7511 • FAX (903) 785-8519