11 - TAX ABATEMENT AGREEMENT WITH KIMBERLY-CLARK CORPItem No. 11
memorandum
TO: City Council
John Godwin, City Manager
FROM: Stephanie H. Harris, City Attorney
SUBJECT: Tax Abatement Agreement for Kimberly-Clark Corporation
DATE: September 19, 2017
BACKGROUND: On August 28, 2017, the City Council directed me to prepare a tax
abatement agreement for a new tax abatement with Kimberly-Clark Corporation.
Kimberly-Clark plans to make improvements and replacements to existing equipment in its
Personal Care Division, which manufactures disposable diapers, training and youth pants and
swim pants. The improvements, which will be made over a period of five years with a total cost
of approximately $121,000,000.00, are designed to significantly enhance Kimberly-Clark's
machinery and equipment to keep the Plant's diaper and pant production lines state-of-the-art in
efficiency, speed and quality so as to allow the Plant to remain competitive with competing
product offerings in the market.
The abatement is for 100% for ten years, but only the improvements completed in 2018 will
receive the benefit of all ten years of the abatement. The number of years of abatement will
decrease for improvements made in the successive calendar years, with the improvements made
in 2022 receiving an abatement of 6 years. A table setting out the number of years abatement for
the improvements made in each of the 5 years is set forth on page three of the attached
Agreement. In addition, because Kimberly-Clark's depreciation schedule is longer than 10
years, all of the improvements made under this Agreement will have taxable value at the end of
the 10 year abatement period.
STATUS OF ISSUE: Pending City Council approval of tax abatement agreement.
BUDGET: Ten year abatement on the improvements set out in the Agreement.
RECOMMENDATION: Motion to approve tax abatement agreement between City of Paris and
Kimberly-Clark Corporation.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
APPROVING AND AUTHORIZING A TAX ABATEMENT AGREEMENT WITH
KIMBERLY-CLARK CORPORATION; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris, Texas has been presented a
proposed agreement by and between the City and Kimberly-Clark Corporation providing
for a commercial and industrial tax abatement for certain improvements, a copy of which is
attached hereto as Exhibit 1 and incorporated herein by reference, hereinafter called the
"Agreement"; and,
WHEREAS, the City Council did heretofore, on the 11th day of January, 2016, in
Resolution No. 2016-003, reaffirm its election to be eligible to participate in tax abatement
agreements authorized by the Property Redevelopment and Tax abatement Act, Texas
Government Code Chapter 312, et seq. (the Act"), in order to maintain and enhance the
commercial and industrial economic and employment base of the Paris area for the long
term interest and benefit of the City and its citizens; and,
WHEREAS, the City Council did heretofore, on the 14th day of November 2016, pass
Ordinance No. 2016-034 (hereinafter referred to as the "Ordinance") authorizing the City
of Paris to participate in the Texas Enterprise Zone Program under the Texas Enterprise
Zone Act, Chapter 2303 of the Texas Government Code (the "Act"); providing tax
incentives; nominating Kimberly-Clark Corporation to the Office of the Governor Economic
Development and Tourism through the Economic Development Bank for Designation as a
qualified business and Enterprise Project under the Act; designating a liaison for
overseeing Enterprise Projects and communicating with interested parties; making other
findings and provisions related to the subject; and declaring an effective date; and
WHEREAS, an Enterprise Zone Project Designation was granted for the "project"
described in the Ordinance and in the Agreement attached hereto (hereinafter called the
"Project") by letter addressed to the City of Paris, Texas, and to the Company, dated
February 27, 2017, by the Office of the Governor of the State of Texas (Economic
Development & Tourism), in which a project designation number of EP1056-120116-P was
assigned to this Project; and
WHEREAS, under the Texas Enterprise Zone Act (Government Code Chapter 2303),
the designation of an area as an Enterprise Zone also constitutes designation of the area as
a reinvestment zone (the "Reinvestment Zone"); and the City of Paris, Texas, ordained in
section 5 of the Ordinance that the Enterprise Zone areas within the City are Reinvestment
Zones under the provisions of the Texas Tax Code, Chapter 312; and
WHEREAS, the property defined in the Agreement and the Project and
improvements to be made under the Agreement are situated within the Reinvestment Zone
described or referred to in the Ordinance; and
WHEREAS, the contemplated use of the property, and the improvements to be
installed therein in the amounts set forth in the Agreement and the other terms therein are
consistent with encouraging development of said Reinvestment Zone in accordance with
the purposes for which it was created and are in compliance with the City's policy of tax
abatement incentives and the ordinance creating such Reinvestment Zone adopted by the
City and all applicable laws;
WHEREAS, upon review and consideration of the Agreement, and all matters
attendant and related thereto, the City Council is of the opinion that the terms and
conditions therein meet the Guidelines and Criteria for Tax Abatement and should be
approved, and that the Mayor should be authorized to execute it on behalf of the City of
Paris, Texas.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS, THAT:
Section 1. The findings set out in the preamble to this resolution are hereby in
all things approved.
Section 2. That the terms of the Tax Abatement Agreement and the property the
subject thereof meet the City's Guidelines and Criteria for Tax Abatement adopted by the
City of Paris by Resolution No. 2016-003.
Section 3. That the terms and conditions of the proposed Agreement attached
hereto as Exhibit 1. having been reviewed by the City Council of the City of Paris and found
to be acceptable and in the best interests of the City of Paris and its citizens, be, and the
same are hereby, in all things approved.
Section 4. That the Mayor is hereby authorized to execute the Agreement and
all other documents in connection therewith on behalf of the City of Paris substantially
according to the terms and conditions set forth in the Agreement attached hereto as
Exhibit 1.
Section 5. That the planned use of the property the subject of the tax abatement
will not constitute a hazard to public safety, health, or morals.
Section 6. That this approval and execution of the agreement on behalf of the
City is not conditioned upon approval and execution of any other tax abatement agreement
by any other taxing entity.
DULY PASSED AND APPROVED this 25th day of September, 2017.
Steven J. Clifford, M.D., Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
EXHIBIT
STATE OF TEXAS
COUNTY OF LAMAR
TAX ABATEMENT AGREEMENT
This Tax Abatement Agreement (the "Agreement") is entered into by and
between the CITY OF PARIS, TEXAS, a municipal corporation, situated in Lamar
County, Texas, acting by and through its authorized officer whose signature appears
below (hereinafter called "City"), and KIMBERLY-CLARK CORPORATION, acting by
and through its authorized officer whose signature appears below (hereinafter referred
to as "Owner").
WITNESSETH:
WHEREAS, the City Council of the City of Paris did heretofore, on the 10 day of
November 2016, pass Ordinance No. 2016-034 (hereinafter referred to as the
"Ordinance") authorizing the City of Paris to participate in the Texas Enterprise Zone
Program under the Texas Enterprise Zone Act, Chapter 2303 of the Texas Government
Code (the "Act"); providing tax incentives; nominating Kimberly-Clark Corporation to the
Office of the Governor Economic Development and Tourism through the Economic
Development Bank for Designation as a qualified business and Enterprise Project under
the Act; designating a liaison for overseeing Enterprise Projects and communicating
with interested parties; making other findings and provisions related to the subject; and
declaring an effective date; and
WHEREAS, an Enterprise Zone Project Designation was granted for the "project"
described in the Ordinance and in this Agreement (hereinafter called the "Project") by
letter addressed to the City of Paris, Texas, and to the Company, dated February 27,
2017, by the Office of the Governor of the State of Texas (Economic Development &
Tourism), in which a project designation number of EP1056-120116-P was assigned to
this Project; and
WHEREAS, under the Texas Enterprise Zone Act (Government Code Chapter
2303), the designation of an area as an Enterprise Zone also constitutes designation of
the area as a reinvestment zone (the "Reinvestment Zone"); and the City of Paris,
Texas, ordained in section 5 of the Ordinance that the Enterprise Zone areas within the
City are Reinvestment Zones under the provisions of the Texas Tax Code, Chapter 312;
and
WHEREAS, the City Council of the City of Paris did heretofore, on the 11th day of
January, 2016, in Resolution No. 2016-003, pass and adopt appropriate Guidelines and
Criteria governing tax abatement agreements to be entered into by the City as required
by the Property Redevelopment and Tax Abatement Act, as amended;
WHEREAS, the Property, as hereinafter defined, and the Project and
Improvements to be made as described herein are situated within the Reinvestment
Zone described or referred to in the Ordinance; and
WHEREAS, the contemplated use of the Property, and the Improvements to be
installed therein in the amounts set forth in this Agreement, and the other terms hereof
are consistent with encouraging development of said Reinvestment Zone in accordance
with the purposes for which it was created and are in compliance with the City's policy
of tax abatement incentives and the ordinance creating such Reinvestment Zone
adopted by the City and all applicable laws;
NOW, THEREFORE, pursuant to Chapter 312 of the Texas Tax Code and the
Guidelines and Criteria for Tax Abatement adopted in Resolution No. 2016-08, the
parties hereto do mutually contract and agree as follows:
I.
Term
1.1 The effective date of this Agreement is the 25th day of September, 2017,
with tax abatement being effective from and after January 1, 2019, and
terminating on December 31, 2028 (an abatement period of ten (10) years (the
"Abatement Period")). Said Abatement Period will terminate on December 31, 2028,
regardless of when Owner completes the Improvements described in Sections II and III
herein below.
II.
The "Property" — Area to be Improved
2.1 The Improvements defined in paragraph III below and made the subject of
this Agreement shall be located within that portion of the buildings (herein called the
°Property") located at the Paris, Texas Plant (the "Plant") owned by the Owner and
described in Exhibit As attached hereto and Incorporated herein by reference, which
Property is within the Reinvestment Zone and the Enterprise Zone.
III.
Consideration: Improvements
3.1 The Owner's current facilities consist of land, buildings, and other
structural improvements at the Owner's Plant described in Exhibit B. attached hereto
and incorporated herein by reference. The Owner shall make improvements and
replacements (herein called the "Improvements") to the equipment within the Property in
the locations shown on Exhibit A. The Owner's Plant in Paris, Texas is part of its
Personal Care Division and manufactures disposable diapers, training and youth pants
and swim pants. Over a period of five years beginning in 2018, Owner has determined
to invest approximately $121,000,000.00 to significantly enhance its machinery and
equipment at its Plant located at Loop 286 SW and FM 137 in Paris, Lamar County,
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Texas, to keep the Plant's diaper and pant production lines state-of-the-art in efficiency,
speed and quality. Said Improvements are more particularly set forth in Exhibit C,
attached hereto and incorporated herein by reference, and are related to new
machinery and improvements to existing machinery at the Plant which will allow Owner
to remain competitive with competing product offerings in the market. Capital spending
investments will be made annually for a period of five (5) years, as is shown below and
in Exhibit C attached hereto, and the Improvements completed in each year will
become eligible for tax abatement beginning on January 1t of the calendar year after
said Improvements are completed. A detailed list of the Improvements proposed to be
installed by the Owner in the years 2018 through 2022 is set out in Exhibit C, with an
estimated yearly investment as follows:
Year
Amount of Investment
Years of Tax Abatement
2018
$25,225,000.00
Abated for ten (10) years
2019
$24,442,800.00
Abated for nine (9) years
2020
$19,602,500.00
Abated for eight (8) years
2021
$22,142,100.00
Abated for seven (7) years
2022
$30,101,700.00
Abated for six (6) years
All of said Improvements will be described in the City's Certificate of Completion defined
in section X. Reporting Requirements. The Improvements will cost approximately
$121,000,000.00 in the aggregate and shall be substantially completed in various
phases prior to December 31, 2022, as is shown on the chart attached hereto as
Exhibit E and incorporated herein by reference; provided that, however, Owner shall
have such additional time to complete the Improvements as may be required in the
event of 'force majeure" if Owner is diligently and faithfully pursuing completion of the
Improvements. For this purpose, "force majeure" shall mean any contingency or cause
beyond the reasonable control of Owner including, without limitation, acts of God, any
natural disaster, war, riot civil commotion, insurrection, governmental or de facto
governmental action unless caused by acts or omissions of Owner, fires, explosions,
accidents, floods, and labor disputes or strikes. The date of completion of the
Improvements shall be defined as the date a Certificate of Occupancy is issued by the
city of Paris, or as otherwise agreed in writing by the parties.
3.2 The Owner agrees and covenants that it will diligently and faithfully, in a
good and workmanlike manner, pursue the completion of the Improvements. As a good
and valuable consideration for this Agreement, Owner further covenants and agrees
that all construction of the Improvements will be in accordance with all applicable state
and local laws, codes and regulations, or Owner will procure a valid waiver thereof. In
further consideration, Owner shall thereafter, from the date a Certificate of Occupancy is
issued or the Improvements are completed as agreed until the expiration of this
Agreement, continuously operate and maintain the Property and the Improvements,
including the specific units of new equipment as identified herein, as a production and
manufacturing plant.
IV.
Consideration
Jobs
4.1 The City has provided in its Guidelines and Criteria for Tax Abatements
substantially as follows: If an existing Employer owns or leases an Authorized Facility
(such as the Plant of the Owner herein), and it has plans to improve such property by
constructing new improvements on its real property or to add new personal property
(which includes equipment, such as that to be installed by Owner herein at the
Property), such existing employer may be eligible for tax abatement with respect to such
Improvements to its real property or its new personal property even though no new jobs
or newly created minimum annual payroll are created. in such cases, however, the
Owner is encouraged to retain as many jobs and as much existing annual payroll as is
economically feasible for the existing employer to be and remain competitive in its
industry.
4.2 The Owner agrees to retain sufficient employment levels to efficiently
operate and support its Plant operations and not to drop below 500 full-time employees
(with benefits) at any time during the term of this Tax Abatement Agreement.
V.
Default
5.1 In the event that (a) the Improvements for which an abatement has been
granted are not completed in accordance with this Agreement or the expenditure for the
Improvements does not meet the amount required herein; or (b) Owner allows its ad
valorem taxes owed the City to become delinquent and fails to timely and properly
follow the legal procedures for protest or contest of any such ad valorem taxes; or (c)
Owner materially breaches any of the other terms and conditions of this Agreement,
then this Agreement shall be in default. In the event the Owner defaults in its
performance of either (a), (b), or (c) above, the City shall give the Owner written notice
of such default. if the Owner has not cured such default within sixty (60) days of said
written notice, this Agreement may be modified or terminated by the City. Notice shall
be in accordance with paragraph 13.3. As liquidated damages in the event of default,
and in accordance with the requirements of Section 312.205 (a)(4) of the Tax Code of
the State of Texas, all taxes which otherwise would have been paid to the City without
the benefit of abatement, together with interest to be charged at the statutory rate for
delinquent taxes a determined by Section 33.01 of the Tax Code of the State of Texas,
with all penalties permitted by the Property Redevelopment and Tax Abatement Act and
the Tax Code of the State of Texas, shall be recaptured and will become a debt to the
City and shall be due, owning, and paid to the City within sixty (60) days of the
expiration of the above-mentioned applicable cure period as the sole remedy of the City,
subject to any and all lawful offsets, settlements, deductions, or credits to which Owner
may be entitled. The parties acknowledge that actual damages in the event of default
and termination would be speculative and difficult to determine.
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VI.
Tax Abatement
6.1 Subject to the terms and conditions of this Agreement, and subject to the
rights and holders of any outstanding bonds of the City, a portion of ad valorem
Property taxes from the Property otherwise owed to the City shall be abated. Said
abatement shall be an amount equal to one hundred percent (100%) of the taxes
assessed upon the increased value of the Improvements made by Owner to the
Property described in Section III of this Agreement, over the value in the year which this
Agreement is executed, in accordance with the terms of this Agreement and all
applicable state and local regulations or valid waivers thereof; provided that the Owner
shall have the right to protest or contest any assessment of the Property and said
abatement shall be applied to the amount of taxes finally determined to be due as a
result of any such protest or contest. For the purposes of this Agreement, the initial
value of the existing real and personal property (not subject to abatement) shall be
deemed to be the value as shown on the tax rolls of the Lamar County Appraisal District
as of January 1, 2017. The current abatement which is the subject of this Agreement
shall extend for a period of ten (10) years beginning January 1, 2019 as set forth
hereinabove in Paragraph 1.1 and as further set forth hereinabove in Paragraph 3.1.
6.2 The abatement granted herein shall be subject to and governed by the
Guidelines and Criteria for Tax Abatement, a copy of which is attached hereto as
Exhibit F and incorporated herein by reference, save and except that, in the event of a
conflict between the requirements of Exhibit F and this Agreement, this Agreement
shall control.
6.3 Owner covenants and agrees that subsequent to the date of this
Agreement, any application by Owner for a new tax abatement for equipment or real
property located within the Property and the Reinvestment Zone applicable to this
Agreement shall be subject to and governed by the City's Criteria and Guidelines for
Tax Abatement in effect at the time of the new application.
VII.
No Conflict of Interest
7.1 The Owner represents and warrants that the Property does not include
any Property that is owned or leased by a member of the Planning and Zoning
Commission of the City of Paris, nor by a member of the City Council approving, or
having responsibility for the approval of, this Agreement.
VIII.
Conditions
8.1 The terms and conditions of this Agreement are binding upon and
enforceable against and with respect to the successors and assigns of all parties
hereto.
5
8.2 It is understood and agreed between the parties that the Owner, in
performing its obligations hereunder, is acting independently; the City assumes no
responsibility or liability in connection therewith to third parties; and Owner agrees to
indemnify and hold the City harmless therefrom. It is further understood and agreed
among the parties that the City, in performing its obligations hereunder, is acting
independently; the Owner assumes no responsibility or liability in connection therewith
to third parties; and, to the extent permissible by law, the City agrees to indemnify and
hold harmless the Owner therefrom.
IX.
Compliance Provisions
9.1 City's Riaht of Access to Records: The Owner agrees that the City, its
agents and employees, shall have the reasonable right of access to records concerning
the Owner's investment in the Improvements for the purpose of conducting an audit of
the Project Improvements and Project costs. Any such audit shall be made only after
giving the Owner at least fourteen (14) days advance written notice and will be
conducted in such a manner as to not unreasonably interfere with the operation of the
facility. Upon request, the Owner will provide the City with a detailed Asset Report with
an itemized list of assets placed into service from the date of execution of this
Agreement to the date of completion. The Asset Report will provide for each asset a
unique serial and/or other identification number (if available), the date on which the
asset was capitalized, the acquisition amount, and the accumulated depreciation
amount. At the City's request, the Owner will provide actual invoices to support the
amounts shown on the Asset Report.
9.2 City's Riahts of Access to Property: The Owner further agrees that the
City, its agents and employees, shall have reasonable right of access to the Property to
inspect the Improvements in order to insure that the construction of the improvements is
in accordance with this Agreement and all applicable state and local laws and
regulations or valid waiver thereof. After completion of the Improvements, the City shall
have the continuing right to inspect the Property to insure that it is thereafter maintained
and operated in accordance with the Agreement during the term of the Agreement. All
inspections will be made only after giving the Owner written notice at least seventy-two
(72) hours in advance, and such inspections shall be conducted in such a manner so as
not to interfere with the operation of the facility. Representatives of the City inspecting
the Property and Improvements shall be accompanied and by one (1) or more
representatives of the Owner and shall sign an Agreement promising to maintain the
confidentiality of any information they obtain in connection therewith except for the
purposes of assessing and collecting ad valorem taxes and verifying or enforcing
compliance with this Agreement, or as otherwise required by law. Said representative
shall also be required to observe any facility rule and regulation applicable to the
Property. Nothing herein shall be construed as limiting the City's ability to perform
inspections or to enter the Property the subject of this Agreement.
1.1
X.
Reporting Requirements
10.1 Annual Report on Improvements for the Years 2018-2022: For each of
the years 2018 through 2022, Owner further agrees that it will by April 1 r provide City
with a sworn report, written on Owner's company letterhead and signed by a
designated representative of Owner, containing information on improvements applicable
to the most recent concluded calendar year as follows:
(a) Copy of the printout from the Lamar County Appraisal district showing the
market value of the Property prior to the construction of the Improvement;
(b) Detailed description of Improvements;
(c) Copy of or identification of plans and specifications of constructed
Improvements and the location of the same for inspection by City's
certification team;
(d) Actual cost of capital Improvements; and,
(e) Date of substantial completion of the Improvement as set forth in
paragraph 3.1 hereof.
10.2 Annual Report on Compliance for Each Year of the Abatement
Period: In addition to the reports required in Paragraph 10.1 hereinabove, for the years
2018 through 2022, the Owner further agrees that it will provide the City by April 15th
with an annual sworn report which shall certify, in writing, that it is in compliance with
each applicable term of this Agreement. Such annual report shall be furnished in the
form attached hereto as Exhibit G and incorporated herein by reference. Owner shall
attach thereto copies of the employer reference summary page of its Texas Workforce
Commission Employer's Quarterly Reports for the calendar year immediately preceding
the date of the annual report required by this section, and the report shall contain a
sworn statement signed by the Plant Manager or an Officer of the Company certifying
that the information provided in the summary page is a true and valid report filed with
the Texas Workforce Commission.
10.3 The reporting requirements and deadlines set forth herein are an integral
and material part of this Agreement, and Owner acknowledges that failure to timely
submit any report or sworn statement required herein is a breach and default of this
Agreement as set forth hereinabove. Owner further agrees to timely submit said reports
and/or sworn statements without prompting by the City.
10.4 Owner shall submit all compliance reports required to by this section via
certified mail, return receipt requested, to:
7
City of Paris
c/o Office of the City Attorney
P.O. Box 9037
Paris, Texas 75461-9037
Alternatively, said reports may be delivered personally to the Office of the City Attorney
at 125 SE 1s' St., Paris, Texas 75460.
XI.
City's Certificate of Completion
11.1 Within thirty (30) days of receipt of each Annual Report on Improvements
required by paragraph 10.1 hereinabove, or as soon thereafter as practicable should the
City require additional information from the Owner, the City shall:
(a) review same for compliance with the terms of this Agreement;
(b) verify that the Improvements identified in the Report and required by the
terms of this Agreement have been completed;
(c) and, if the required Improvements have been made, deliver a Certificate of
Completion in the form attached hereto as Exhibit D and executed by the
Mayor to the Chief Appraiser of the Lamar County Appraisal District. The City
shall attach to said Certificate of Completion a copy of the information
provided by Owner in the Annual Report on Improvements as an identification
of the Improvements upon which the tax abatement is to be granted.
11.2 In the event that the City requires additional information in order to
conduct the review and verification contemplated by paragraph 11.1 hereinabove, the
City shall notify the Owner of same as soon as is practicable, but no later than thirty (30)
days after receipt of the Annual Report on Improvements.
11.3 Nothing in this section shall prohibit the City from exercising its right to
declare Owner in default or Owner's right to cure same in accordance with the terms of
Section V hereinabove.
XII.
Authority to Contract
12.1 This Agreement was authorized by resolution of the City Council at its
regularly scheduled meeting on the 25th day of September, 2017, authorizing the Mayor
to execute the Agreement on behalf of the City.
12.2 This Agreement was entered into by Kimberly-Clark Corporation pursuant
to the authority granted to the authorized official whose signature appears below.
12.3 This Agreement shall constitute a valid and binding Agreement between
the City and Owner when executed in accordance herewith, regardless of whether any
other taxing unit executes a similar Agreement for tax abatement.
XIII.
Legal
13.1 No officer, official or agent of the City has the power to amend, modify or
alter this Agreement or waive any of its conditions or to bind the City by making any
promise or representation not contained herein.
13.2 This Agreement, except by operation of law, shall not be assigned or
transferred by Owner, without the prior written consent of City, which consent shall be at
the sole discretion of the City.
13.3 Any written notice required or permitted under the terms of this Agreement
shall be given and be deemed to have been duly served if either (1) delivered in person,
or (2) deposited certified mail, return receipt requested, postage prepaid in the United
States mail, addressed to the designated representative of the respective parties which
are designated as follows:
Owner
KIMBERLY-CLARK CORPORATION
Attn: James Alspaugh, Plant Manager
2466 F.M. 137
Paris, Texas 75460
With a Copy To:
Mr. Kirk Glasby
DuCharme, McMillen & Associates, Inc
12710 Research Blvd., Suite 305
Austin, Texas 78759
City
City Manager
City of Paris
P.O. Box 9037
Paris, Texas 75461-9037
City Clerk
City of Paris, Texas
P.O. Box 9037
Paris, Texas 75461-9037
Office of the City Attorney
City of Paris, Texas
P.O. Box 9037
Paris, Texas 75461-9037
13.4 If any term or provision of this Agreement shall be declared
unconstitutional or void by any court of competent jurisdiction, the constitutionality and
validity of the remainder of said Agreement shall not be affected thereby, and to this end
the terms and provisions of said Agreement are declared to be severable.
13.5 This Agreement sets forth the entire understanding between the parties,
and any other understandings or agreements shall be canceled and superseded by this
Agreement upon the date of execution hereof. None of the terms of this Agreement
shall be waived, discharged, altered or modified in any respect except by an agreement
in writing signed by both parties and specifically referring to this Agreement. The
captions in this Agreement are included for convenience only and shall not be taken into
consideration in any construction or interpretation of this Agreement or any of its
provisions. This Agreement is performable in Lamar County, Texas, and shall be
governed by, construed and enforced in accordance with the laws of the State of Texas.
The provisions of this Agreement shall apply to, bind and inure to the benefit of the City,
Owner, and their respective successors, and permitted assigns, if any.
13.6 Venue for any actions arising under this Agreement shall lie exclusively in
the courts of Lamar County, Texas, for any state court action, and in the U.S. District
Court for the Eastern District of Texas for any Federal Court action
Witness our hands this 25th day of September, 2017.
ATTEST:
CITY OF PARIS, TEXAS
By:
Steven J. Clifford, M.D., Mayor
APPROVED AS TO FORM:
Janice Ellis, City Clerk Stephanie H. Harris, City Attomey
KIMBERLY-CLARK CORPORATION
By:
ATTEST:
Secretary
10
Vice President -Taxes
LIST OF EXHIBITS:
A= The Property—Legal description of the property within the Enterprise Zone and
diagram of the buildings in which the Improvements are to be made
B= Field notes or plat of the Kimberly-Clark Plant in Paris, Texas
C= Detailed descriptive list of the new Improvements which are the subject of this Tax
Abatement
D= City of Paris Certificate of Completion
E= Completion Chart Showing Plans for Capital Investment to Install the Improvements
by the Company and Tax Abatement
F= City of Paris, Texas Guidelines and Criteria for Tax Abatement
G= Form for Annual Report on Compliance
11
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itiaut • t 3% riles $MW 5t oil- ttestot iso City of Parts. jaa of t.-r
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ier ciraiFrt ; t4N m
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first sDad*
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WAS leffestrik� fo a�lti'ia! bDr decd rn r� �+ �
of�the ideRerdtl
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etatM+i aid 00ya
•. 1 d doss et ; tact ai IUS as fabowl
• elle. plat 03 t16 U s *ta4 icor tafaaa is + L tet
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' , 3tetir ! �!. ii• ta. •i.s t a df}ttdia of lex rt. Le. ' .•!� r
Situated rVedl■ff $mo 40 big. West of 1MV of Pat aftl � of i�r,+
• a d S of Tom', R �++ref, if LerSrl jteer• So' 0313"m brtae�� a� of
s a � friss of ia" ~ goner loses rt a1 sty .rid r.eare.n
p�of tht Deed of Safi t7wR sed St1t#. '
�}.aR!trrfe fiat carts ie tbs 11rat toseear! Lt+e of salt llyr
t !w'w�t►► at Sao sir pLa �{3omms gWal Out of 7aad: said priat
faKtw t + of; R�aae o'nia vr+re tlit ad to SIMMS$ aoa+rr e! tit
'tAer#� fes- t a Mi. _ t M106 V01 M-d(staucs of tN rt. to ass or", i for
swwer pit tiex tlrslorb' swgrt eei aor of Paid deMea+ai Al t»ct et 1:
These fast ■ tssame of los! ;t. to ar Ira PIS TTor eawtr,ti the i"bWt '
tarywr ef~ a w4t, of saaneyed ifl ?. ltirtrt* y dwa i u r
ras � aa��t. rasto r > st to�'am Dead ' 'or 64Sts ek j1 eratt or Ush
st�se�ca tb•rt>, ?I•Liotr■ fast a dlstaaeR b 1f0 tit is pin lYa' car W
;. it QrR�i ewoer Saud rartrfa�pr i+l�Ct Rt 1 •�. "
• yt iaVtt Vilep. is . Lst . /is sat ef' to al► l.ea rte
feraar t!'tfirt Botnar et:ata hrtrt61 Ira t of 7aeals •
TAeas% sL o"a t.tar Sf, r+e >tW� 77 as lotfevas 7a+deai i
Cmv to 0* gist 75 cut lbnb 32 ft.*Xo
to%�sswlsra�tari �tti iiFr p7i or %Dtaatwq-..��'�:..- ,
• soe7soe AN'o$>A a 'as liase dae.d J►lpwt 7. lo"s lq chGlwfs
• ap■satt" cosllnX appaaR al raeosr to sack �2. Asa, fait Oil a*d o.!
• ; t.asa itseaoAr elle, , LAMS, -s»d �s rot Jral► i:.11t�,
t�gvaeA pgeae aeart
INAIL pKt RS<aak �p taserassoz•M C4alsorFi
4SRt iku" Qsalagta and ++riosgta �+ tatiar ot�e rrNse s f:d9ht
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�' apda Ho Step A.W egPfi 1 rrWMpf tot tb artlttt la . •.
ti , t a teetfalil sei pw�sietr, i""A itr >n" Comty# 20"1
. - mous partitarlsr7,l desar4gi oil Mbit •Jt' •ttss9�iet hatrti suit ,
wade a jure ber+td Rote a!1 putpeiNtq tird '
t3ti!?a1, tetalryd{ ! o!'im Qvttw ptNridoo Ror till i
aeeteiMiatad t1e at i
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vm, , Ras ate iA wAiduatisw of the sew at To i
am Wave on-a01 Iyw otmr $"a ma ra "Wo eaRswasuo, . •
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3est ti to iot■arta a Gnewd Warmly DM4
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yt dasardpad SUI puspIsbl"SIMPIAs Coontd• #sur
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i'
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ltsalt'. us ssadr>Zorrs and aNrip o' is IDlXMW An rix '
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�droRaaaws Za++lsl Dldsts!
of" Plata a% sa" asy •'/ ti
past . s
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• >� M}tas fovik in p . wt or tie city of Nrts; radw or Ga{r
i t1 i
taxwrt[ir ryr�ettraMau of 0ratarde/ tr• wi. W, poa AOL freprir .f
• _ : �, i. •w :` jiio fpr ivrrst in s t t% a of
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rW soramr at We SWUORR aYrrr er sai� Ror�t pa L�racsr or
esrwer or rrt�t ,ores at at Lott W 7aad•
lh►rtb u Ort, 30 nab dst @104 she bast, 000ra rp ltit or rates RoM't!7-
�istanco of 270 ft to a seacrate .safer rat torows gw }r rafZown Metdi ! 1�•
alnat+r rI t iouaiar�l tlas of tt • 1r I&XIM6 Beall:
r tit,,, start t ft.I ate. Is tti,a• tlsnt {
Oi ft.tVert 44 Iki. t1erR 7?f R. ZO a wente siva'• far prate' at t ria twrtb•
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�riR K mei,. tips! • thhee ia.�th tsfr�,
1 aatai s si! pact
k R+i'isvai'
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EXHIBIT
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EXHIBIT
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CERTIFICATE OF COMPLETION
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS
The City of Paris, Texas has included the property described in Exhibit A
attached hereto into an Enterprise Zone established by Ordinance No. 2016-034 and
has executed a Tax Abatement Agreement with KIMBERLY-CLARK CORPORATION,
(the "Company"), for certain improvements and other equipment (the "Improvements")
to be installed at the Company's plant located in Paris, Lamar County, Texas.
Based on information provided by Company, and verified by the City, the City of
Paris herein verifies that the Improvements agreed to be built, installed and used in the
calendar year have in fact been completed as provided for in the Tax Abatement
Agreement.
NOW, THEREFORE, the City of Paris authorizes that the property described in
Exhibit A attached hereto shall receive a tax abatement during each year through the
end of the term the Tax Abatement Agreement equal to 100% of the taxes assessed
upon the increased value of the real and personal property of the Company located in
Paris, Texas, over the value at which the property was last appraised on January 1,
2017, which is the year in which the Tax Abatement Agreement was executed, as
recited in the Tax Abatement Agreement. The tax abatement will extend for a duration
of _ years, with the tax abatement beginning January 1, , and ending
December 31, 2028.
APPROVED this day of
, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
EXHIBIT
"El!
Tax Abatement Request Application
Paris, Texas
(City of Paris, Lamar County & Paris Jr. College)
Exhibit `A'
SECTION 4(a)
1) General Description of improvements as Planned
2) Projected New Value to the Property
1) General Description of improvements as Planned
The planned projects involve the installation of new machinery and improvements to existing
machinery used in the manufacturing process to keep Paris Plant's diaper and pant
production lines state-of-the-art in efficiency, speed and quality.
2) Projected New Value to the Property
Approximately $121,000,000 in capital investment on assets is estimated to translate roughly
into (See Attachment) in taxable value of personal property subject to depreciation of up to
10 years. A projected schedule of incremental increases in taxable value in the first five
years is as follows:
PIaced in
Service
New Capital Estimated Taxable Value Estimated
2018
$25,225,000
2019 '-
$24,422,800
2020
$19,602,500
2021
$22,142,100
2022
$30,101,700
Total
$121,494,100
April 2015 updated October 2015 6
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LL F
RESOLUTION NO. 2016-QQ3
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS AUTHORIZING THE CITY TO BE ELIGIBLE TO PARTICIPATE
IN TAX ABATEMENT AND APPROVING GUIDELINES AND CRITERIA
FOR GRANTING TAX ABATEMENTS IN THE CITY OF PARIS, TEXAS;
MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE
SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, Section 312.002 of the Texas Tax Code requires local taxing units to state their
intent to participate in tax abatement agreements and to adopt guidelines and criteria for granting tax
abatements every two years; and
WHEREAS, these updated policies, guidelines and criteria for tax abatement agreements were
reviewed and approved by the Paris Economic Development Corporation Board at their meeting on
November 17, 2015, a copy of which is attached as Exhibit "A", and incorporated herein by reference,
hereinafter referred to as "Agreement"; and
WHEREAS, the City Council of the City of Paris, Texas hereby affirms its intent to be eligible to
participate in tax abatement in accordance with Chapter 312 of the Texas Tax Code and to adopt the
Guidelines and Criteria for Tax Abatement attached hereto and incorporated herein as Exhibit "A;" and
WHEREAS, a three-quarters majority vote of the City Council of the City of Paris, Texas is
required to amend the Guidelines and Criteria for Tax Abatement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS, THAT:
Section 1. The findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. The City hereby elects to be eligible to participate in a tax abatement program and
approves and adopts the amended Guidelines and Criteria for Tax Abatement attached hereto and
incorporated herein as Exhibit "A".
Section 3. This resolution shall become effective from and after the date of passage.
PASSED AND APPROVED this 11th day of January, 2(
WEST:
nice Ellis, City Clerk
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
I. General Purpose and Objectives.
The City of Paris (City), Lamar County Government (County) and Paris Junior College (PJC)
(collectively, herein called the "Taxing Jurisdictions") are committed to enhancing the
competitiveness and the expansion potential of the local industry; to attracting and encouraging
new manufacturing industry and investment; to improving the City of Paris, Lamar County and
its mfiust acture, which attracts and supports development; and, to expanding the tax base,
employment opportunities, and the overall quality of life for its citizens. Therefore, the
governing bodies of the Taxing Jurisdictions will give consideration, on a case-by-case basis, to
providing tax abatements to the owners of real and personal property for projects that stimulate
economic growth and diversification in the geographic areas served by the Taxing Jurisdictions,
according to state law and consistent with these policies, criteria and guidelines.
Tax abatements may be made available to industrial, manufacturing, distribution, service facilities,
or any "primary jobs" creating industry as defined by the Economic Development Act of the State
of Texas. The facility must be currently in, or locating in the areas served by the Taxing
Jurisdictions, and located in a designated Enterprise Zone or Reinvestment Zone. New facilities
and structures as well as the expansion and modernization of existing facilities and structures, will
be considered. Evaluation of a tax abatement request will be based on the information provided in
the tax abatement application. However, the City of Paris, Lamar County and Paris Junior
College are under no obligation to provide tax abatement to any applicant.
The Paris City Council acts as the lead entity for projects located in the City limits. The Lamar
County Board of Commissioners acts as the lead entity for projects in Lamar County, which are
located outside of the City limits. All governing bodies of the three Taxing Jurisdictions have
adopted this policy, criteria and guidelines and will consider tax abatement requests that qualify
hereunder.
IL Definitions.
Definitions are provided as an Appendix A.
III. Designation of a Reinvestment Zone.
For any facility located within the area served by the Taxing Jurisdictions to be eligible for tax
abatement it must meet the criteria for designation as a tax abatement reinvestment zone as set
forth in the Property Redevelopment and Tax Abatement Act, Texas Tax Code Chapter 312.1he
City or County may designate an area as a reinvestment zone in accordance with the criteria and
procedural requirements set forth in the Property Redevelopment & Tax Abatement Act, as
amended (Texas Tax Code Sec. 312.401 (b)).
IV. Tax Abatement Authorized.
The Taxing Jurisdictions, through their elected governing bodies, may agree in writing with the
owner and/or lessee of taxable real and/or personal property that is located in a reinvestment zone,
but that is not in an improvement project financed by tax increment bonds, to exempt from
taxation a portion of the value of the real property, or of personal property located on the real
property, or both. The period of the abatement granted under the agreement shall not exceed the
term authorized by law. Such agreement will be based on the condition that the owner or
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
lessee of the property makes specific improvements or repairs to the property. An agreement
may provide for the exemption of the real property in each year covered by the agreement only to
the extent its value for that year exceeds the base year value. An agreement may provide for the
exemption of personal property located on the real property in each year covered by the
agreement other than personal property that was located on the real property at any time before
the period covered by the agreement. Inventory or supplies cannot be abated as personal
property.
Tax abatements may only be granted for additional value of eligible property improvements
made subsequent to and specified in an abatement agreement between the Taxing Jurisdictions
and the property owner or tome subject to such limitation as the Taxing Jurisdictions may require.
The additional value must exceed any reduction in the fair market value of other property of the
owner already on the tax roll within the area served by the Taxing Jurisdictions. Change in
appraised value does not qualify for abatement except in an instance where a previously vacant
authorized facility is utilized. Value added to the tax rolls must come from actual capital
expenditures.
The negotiation of tax abatement agreements will be conducted by the Tax Abatement Advisory
Committee, and facilitated by the Paris Economic Development Corporation. In determining
where and how tax abatements will be utilized, the Tax Abatement Advisory Committee will
examine the potential return on the public's investment. Return on public investment will be
measured in terms of (i) jobs created, (ii) ,jobs retained in cases of existing employers within the
Taxing Jurisdictions, and (iii) broadening of the tax base, and expansion of the economic base
(e.g. capital investment, payroll, local spending, etc.)
V. Eligibility Criteria for Tax Abatement for Real and Personal Property
A property owner and/or lessee shall be eligible for tax abatement only upon the following
criteria.
WkRdft Criteria for Tax Abatement
Authorized
1. An authorized facility is used for manufacturing, research, regional distribution, regional services, regional
Facility
tourist entertainment, other basic industry, or any primary jobs creating industry. (See Appendix A for
definitions.)
2. A new authorized facility must be created, or an existing authorized facility must be improved, modernized
or expanded.
3. If a leased authorized facility is granted abatement, the agreement may be executed with the lessor and/or
lessee, depending upon the pw*Wmr circumstances of the proposed project. If the agreement is with the
lessor, lessor shall demonstrate binding contracts with the lessee to guarantee compliance with the terms of
the agreement
Eligible
1. The property involved must be a newly created or improvements to an existing authorized facility.
Property
2. Eligible property for which abatement may be granted includes nonresidential teal property and/or tangible
personal property not located on the real property at any time before the abatement agreement becomes
effective.
3. Abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site
improvements, tangible personal property, and that office space and related fixed improvements necessary
to the operation and administration of the authorized facility.
4. Inventory or supplies shall not be e ' ble for abatement
Historic
For historic property located in the City of Paris Historic District, see Chapter 30, Article N of the City of
Paris Code of Ordinances — Tax Exemption for Historically Significant Sites. Contact am City of Paris, city
2
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Capful Investnimt Pa roll and Job Creation Cdteria
Manager's Office for additional information on these and other ETgguns offered bthe Ci of Paris.
Value and
1. The governing bodies of the local Taxing Jurisdictions will decide whedner to grant a tax abatement to an
Term of
applicant, and the amount, if any, of such abatement, on a case-by-case basis and in accordance with these
Abatement
Policies, Criteria and Guidelines.
2. The term of abatements granted under any agreement may not exceed that permitted by applicable
state law.
3. The amount of the abatement shall be based upon a percentage (0 to 100%) of all or a portion of the
eligible property within the authorized facility.
4. Abatements may only be granted for the additional value of eligible real and personal property
improvements made pursuant to and listed in the agreement between the Taxing Jurisdictions and property
owner and/or leasee, subject to such limitations as the Taxing Jurisdictions may require.
5. Real property tax adaten►art may be granted only to the extent that its value for each year of the agreement
exceeds its value for the year in which the agreement is executed.
6. If a modernization project includes the replacement of improvements within an authorized facility, the
value eligible for abatement shall be the value of the new unit(s), less the value of the replaced unit(s).
Abatement
The criteria used to evaluate a proposed project application for abatement includes, but is not limited to:
Evaluation
1. The dollar amount of the increase in the tax roll.
Criteria
2. The number of jobs created or retained by the employer involved.
3. The possible effect on attracting other taxable improvements into the Taxing Jurisdictions.
4. The nature of and overall effect on the Taxing Jurisdictions.
5. The effect on the safety, hearth, and morals of the Taxing Jurisdictions' residents.
6. Any substantial long-term adverse effect on the provision of the Taxing Jurisdictions' services or tax base.
7. Meeting all relevant zoning requirements.
8. Consistent with the comprehensive plan of the City of Paris and County of Lamar.
9. The types and cast of public improvements and services (water and sewer main extensions, streets and roads,
etc.) required of the Taxing Jurisdictions.
10. The types and values ofpublic improvements to be furnished by tare applk4ot
Economic
To be eligible to receive tax abatement, the planned improvements:
Qualification
1. Must be reasonably expected to increase the appraised value of the property.
2. Must be expected to prevent the loss of employment, or assist in the retention or creation of jobs in the Taxing
Jurisdictions during the term of the agreement.
3. Should not be expected to solely or primarily have the affect of merely transferring existing employment
from one part of the Taxing Jurisdictions to another without demonstration of increased future invest
(dollars or jobs) or unusual cid whereby without such a move employment is libely to be reduced.
4. Must be necessary because capacity cannot be provided efficiently utilizing existing improved property
when reasonable allowance is made for necessary improvements or relevant governmental actions.
Taxability
During the term of the agreement, taxes shall be payable as follows:
1. The base year of eligible property as detetwuned each year by the Lamar County Appraisal District, shall be
My taxable.
2. The additional value of eligible property above the base year value shall be taxable in the manner described
in the agreement.
3. The Chief Appraiser of the Lamar County Appraisal District shall annually determine an assessment of the
real and personal property comprising the reinvesb neu t zone.
4. Each year, the employer, rho company or individual receiving an abatement pursuant to an agreement shall
famish the assessor with such hiftnation as may be necessary to determine the amount of any abatement.
5. Once such value has been established, the Chief Appraiser shall notify the affected Taxing Jurisdictions,
which levy taxes on such property and also notify the Paris EDC.
6. The employer, owner or lessee of eligible properly requesting tax abatement within a reinvestment zone
shall, prior to the commencement of eligible property improvements, agree to expend a designated sun of
I
money and to create or retain a certain number oflobs, or annual payroll as further defined below.
Capful Investnimt Pa roll and Job Creation Cdteria
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
A tax abatement may be made available to employers who ane increasing new capital investment and creating jobs with respect to
an authorized facility located anywhere within the area served by the Taxing Jurisdictions based on the following criteria.
I . To be eligible for any tax abatement, there moat be a minimum capital investment in the authorized facility of $1,000,000 and
at least ten (10) new jobs added to the new employer's labor fo=.
2. Any project with a capital investment of more than twenty --five million dollars ($25,000,000), AND accompanied by a
newly created minimum annual payroll of two and one-half million dollars ($2,500,000), OR creating more than two
hundred twenty-five (225) jobs will be individually negotiated.
3. As specified in state law, no abatement will be granted for more than 10 years and the total abatement shall not exceed
100%.
4. A newly created business must be (or will be) located within an enterprise zone or a designated reinvestment zone.
5. The twang jurisdictions recognize a significant difference in the valuation of real property versus personal property.
Because of depreciation schedules, the abatement of personal property could result in a tax exemption. For this reason, the
abatement schedule for personal property versus real property may be different. Each industrial account is looked at and
vahred on an individual basis by the Lamar County Appraisal District (LOAD). The typical depreciation used for
industrial accounts by LCAD is as follows:
a. Computers — 3 year life
b. Furniture & Fixtures —10 year life
c. Vehicles — 7 to 10 year life (depending on type)
d. Machinery & Equipment —15 year life (maybe longer or shorter depending on the type)
6. For each abatement request the Abatement Committee will evaluate the equipment (personal property) investment and
useful life separate from the real estate (real property) investment to determine the Iength of the abatement for each.
7. If personal property should become obsolete and be replaced while under an abatement agreement, the replacement
personal property is not eligible for abatement.
8. The charts below provide capital investment guidelines to qualify for tax abatement and the related schedule and
percentage of abatement.
For CA ito Invelilment 01M minimum
investment AND 10 ' bs for new em 10
Amount of Investment
Year 1 Year 2
Year 3 Year 4 Year 5 Year 6 Year 7
$1000000 to $5 000,000
70% 600A
50% 40% 30% 20% 10%
$5,000,001 to $20,000,000
80% 70%
600/6 50% 40% 30% 20%
$20,000,001 to $25,000,000
90% 80%
70% 60% 50% 40% 30%
$25,000,001 and Above
ForpreJ&& WA cwpW hnvatwew above $25MAAW $25Mle am annedpaymn OR
creation won that 225 new jets, Nut terra and paomfte of *e ebawnmt are both
XWO&W bat cannot wired 10imm or 100X
An additional 20% abatement for new job creation is available based on the following requirements:
a. A project that creates a minimum of 10 new jobs.
b. The new job wages are equal to or greater than the current County average wage for all private sector jobs excluding
retail trade and accommodation and food services ($41,158 annually for 2013. Source: Texas Workforce Commission
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
via www.trsccr2.com. (Note: Tkfs represents 347 companies, 10,470 jobs and 56% of allprivate sector employma
in Lamar County.)
e. The tuning jurisdictions and the company must agree to inciude measuring, tracking and annual reporting of the net
job increases (existing jobs plus new jobs) for the entire term of the abatement agreement.
For Net New Jobs(New Job Creation and Retention
of '
- Jobs
Net New Jobs
Year 1
Year 2
Year 3
Year 4
Year S
Year 6
Year 7
1. 10 new jobs minimum.
*20%
20%
20%
20%
209'0
20%
20%
2. New job wages = or > average annual
wages for private sector jobs in hamar
County. (Ewhuft n:WL aocommodatiam, food
mvim See Rema 9.b. above.)
3. Agree to maintain existing base and new
jobs during the entire term of agreement.
4. *Year 1 cannot exceed 100%
VI. Tax Abatement for Existing Employers Regarding Real or Personal Property.
The Taxing Jurisdictions recognize the value of its existing employers to the wellbeing of the
City and County. The Taxing Jurisdictions desire to encourage existing employers to remain in
the Taxing Jurisdictions and to improve their respective businesses and industries, as well as their
profitability.
Accordingly, if an existing employer (as opposed to a newly created business or industry moving
into the Taxing Jurisdictions), owns or leases an authorized facility and has plans to improve such
property by constructing new improvements on its real property and/or adding new personal
property to its authorized facility which qualify for tax abatement under these Policies, Criteria
and Guidelines, such employer may be eligible for tax abatement with respect to such
improvements to its real property or its new personal property under the provisions of Article V
above, even if no new jobs or newly created minimum annual payroll are created.
In projects involving existing employers, the criteria for tax abatements for improvements to real
property and for new personal property at authorized facilities set forth in Article V above shall be
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
waived.
The local taxing jurisdictions encourage existing employers to retain as many jobs and as much
existing annual payroll as is economically feasible for the existing employer, while remaining
competitive in its industry.
VII. Greenfield projects
In order to encourage the development of greenfield properties and also to be able to expedite
certain new projects, the criteria for tax abatements for improvements to real property and for new
personal property at authorized facilities set forth in Article V above shall be waived for projects
exclusively involving greenfield properties.
VIII. Application Process
tan Protea
Eligibility
Any present or potential owner of taxable property in the Taxing Jurisdictions may request tax
abatement by $ling a written request with the City Manager, County Judge, or PJC President, with
a copy of this NMBatkm forwarded by the applicant to the Executive Director of the Paris EDC.
Form
The application shall consist of a completed application form accompanied by the following:
1. A general description of the improvements to be undertaker together with the projected new
value to the property and the type of business operation proposed.
2. A detailed 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 list of the number and type of jobs creatod, including information pertaining to anticipated
job transfers (if any).
S. A metes and bounds description and plat of the proposed reinvestment zone that shows all
roadways within 200 feet of the reinvestment zone and all existing zoning and land uses
within 200 feet of the reinvestment zone.
6. A time schedule for undertaking and completing the proposed improvements.
7. The type and value of any additional economic development incentives requested.
8. Any other information about the proposed project as may be required by the Taxing
Jurisdictions or as deemed desirable by the T ' Jurisdictions.
Review
1. All applications will be initially reviewed by members of the Tax Abatement Advisory
Process
Committee.
2. An initial project briefing meeting will be conducted between the company's representatives
and the Tax Abatement Advisory Committee.
I The Committee will evaluate the request for tax abatement in accordance with these criteria
and guidelines and will make its recommendation to the Paris City Council, Lamar County
Commissioners Court and Paris Junior College Board for their review and approval.
4. After the Paris City Council has been briefed on the proposed tax abatement offer and they
have directed the Committee to move forward, the Paris City Attorney will draft the initial tax
abatement agreement for review by the Tax Abatement Committee, the PEDC Board and
representatives of each Taxing Jurisdiction.
5. Electronic versions of the City's abatement agreement will be provided to the County and
PJC so all agreements have consistent language, terms and conditions.
6. Following Tax Abatement Committee review of the draft agreement, it will be sent to the
applicant's legal counsel for review and comment Any changes requested by the tax
abatement applicant will be reviewed and considered by the Committee and City Attorney.
7. Once the Agreement is finalized, it will be placed on the PEDC Agenda for review and action
by the PEDC Board.
S. Once the Tax Abatement Agreement has been formally approved by the PEDC Board, the
Agreement shall be forwarded to the Paris City Council, Lamar County Commissioner's
Court and Paris Junior College Board of Regents for final consideration and action.
Public H
1. The Taxing Jurisdictions will comply with certain public notices and hearings required as
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
VIIL Abatement Agreement Terms and Conditions.
Appendix B provides many of the terms and conditions to be included in any formal tax
abatement legal agreement.
IX. Amendments to Policies, Criteria and Guidelines
These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of
their adoption, unless amended earlier by the affirmative vote of three-fourths (3/4) of the
members of each governing body (City, County, PJC).
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Pham: 903-7846964
Fax: 903-784-2503
Website: www.paristexasusa.com
Email: uarisedc@naristexasusa.com
7
mandated by state law under the Property Redevelopment and Tax Abatement Act prior to the
designation of a rainve stment zone and execution of a tax abatement agreement.
2. The lead Taxing Jurisdiction (typically the City of Paris) may adopt an ordinance designating a
tax abatement reinvestment zone only after notice of a public hearing has been published at
least seven (7) days before the date of the hearing, and all other procedural requirements of
Chapter 312 of the Texas Tax Code have been satisfied.
Findings
In order to enter into an agreement, the Taxing Jurisdictions must find that:
1. The tering of the proposed agreement comply with these Policies, Criteria and
Guidelines.
2. There will be no substantial adverse effect on the provision of Taxing Jurisdictions' services
or tax base.
3. That the planned use of the property will not constitute a hazard to public safety, health or
morals.
4. Incident to approval of any ordinance designating a reinvestment zone, the Taxing
Jurisdictions shall find that the improvements sought are feasible and practical and would be a
benefit to the land to be included in the reinvestment zone and to the Tarring Jurisdictions
after the expiration of the agreemetit.
Variances
Requests fur variance from the provisions of these Policies, Criteria and Guidelines may be made
in writing to the Taxing Jurisdictions; provided, however, that in no event shall the team of any
abatement exceed the period authorized by applicable state law Such request shall include a
complete description of the circumstances requiring a variance. Approval of a request for variance
shall require the aTur alive vote of throe -fourths (3/4) of the members of each of the Taxing
Jurisdictions' governing bed .
Proposed
The adoption of these Policies, Criteria and Guidelines by the Taxing Jurisdictions does not limit
Agreements
the discretion of the Taxing Jurisdictions' governing bodies to decide whether to enter into a
Decided on
specific tax abatement agreemart. Nor does it limit their discretion to delegate to their employees
Individual
the authority to determine whether or not the Taxing Ju nsdwtk m should consider a particular
Basis
application or request for tax abatement, or create any property, contract, or other legal right in any
person or entity to have the Taxing Jurisdiction consider or grant a specified application or request
for tax abatement.
VIIL Abatement Agreement Terms and Conditions.
Appendix B provides many of the terms and conditions to be included in any formal tax
abatement legal agreement.
IX. Amendments to Policies, Criteria and Guidelines
These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of
their adoption, unless amended earlier by the affirmative vote of three-fourths (3/4) of the
members of each governing body (City, County, PJC).
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Pham: 903-7846964
Fax: 903-784-2503
Website: www.paristexasusa.com
Email: uarisedc@naristexasusa.com
7
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX A
Term
Abatement or Tax
The fall or partial exemption from ad valorem takes of certain goal and tangible personal
Abatement
in a Reinvestment Zone deer Led for economic development
The written legal agreement for tax abatement between a property owner and/or lessee and
Agreement or
Agreements
die City of Paris, Lamar County and Paris Junior College.
Authorized
A facility may be eligible for abatement if it is a facility used for manufacturing, research,
Commercial or
regional distribution, regional services, regional tourist entertainment, other basic industry, or
Industrial Facility
any primary jobs creating industry (see definitions below). All mWhorized facility definitions
include buildings and structures, including fixed machinery and equipment used in operating
the
Authorized
The City Council of the City of Paris may also designate areas of the City where residential
Residential Facility
properties may be considered for abatement of City taxes only. The City of Paris will
approve their residential abatement policies, criteria and guidelines separate from these
policies.
Manufacturing
The purpose of which is or will be the manufacture of tangible goods or materials or the
Facility
processing of such goods or materials by physical or chemical change. Facilities
primarily engaged in assembling component parts of manufactured products we also
considered manufac facilities
Regional
Used primarily to receive, store, service, or distribute goods or materiels where a mr41ority of
Distn'butim Facility
the goods or services are distributed to points at least 100 miles from its location in the
Taxing Jurisdictions of Paris and Lamar
Regional Tourist
Used in providing amusement/entatainment through the admission of the general public
Entertainment
where the majority of users reside at least 100 miles from the Taxing Jurisdictions and where
Facility
the majority of users ace likely to slay in the Taxing Jurisdictions for more than one day and
will therefore likely utilize local restaurants and hotel/motel accommodations.
Used primarily for research or experimentation to improve or develop new tangible goods or
Research Facility
materials or to improve or develop the prodpoon processes thereto.
Other Basic or
Not elsewhere described, used for the production of products or services which result in the
Service Industry
creation of new jobs and bring new wealth into the Taxing Jurisdictions (e.g. bealthcare-
related industries .
Primary Jobs
Any industry creating "primary jobs" defined as a job that is available at a company for
Creating Industry
which a majority of the products or services of that company are ultimately exported to
regional, statewide, national, or international markets infusing new dollars into the local
Base Year Value
The assessed value of elitgible property as of January 1, preceding the date of execution of the
agreement phis the agreed upon value of eligible property improvements made atter January
1, but before the execution of the agreement. The Base Year V" may be adjusted either up
or down from yew to year as Per renditions by the Lamar County Appraisal District.
Employer
The owner or lessee of property, who is applying for tax abatement and who will provide
obs and capitol investment within the Reinvestment Zone or within the EnLegEjLe Zone.
Reinvestment Zone
An area where the Taxing Jurisdictions have decided to influence development patterns and
attract major investments that will contribute to the development of the area through the use
of tax abatement for specified improvements. These statues are found in Chapter 312 of the
Texas Tax Code.
Enterprise Zone
An area of land designated as such under Chapter 2303 of the Texas Government Code.
Job or Jobs
A `Job" is when an individual works 40 hours per week for an employer, and in the position
the individual is provided the benefits normally offered by the employer, such as health
insurance, vacation and some form of retirement benefit. A job is not a position filled for the
employer as a worker or employee of an employment agency or employment service. "Jobs"
also includes "Full-time Equivalent Jobs" defined below.
Full-time Equivalesit
The ince atim of the governing bodies is to provide a company the maxsn = flexibility m
(FTE) Jobs
running their business and malting business decisions, especially related to staffing. The
following definition of FTE will be inflected in all incentive agreanaft An FTE is:
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
1. An individual working 40 hours per week in a job defined above.
2. A number of part-time jobs where tha hours worked in each such job is less than 40 hours
per weep made available by one employer and added together to total 40 hours per week.
For example, fourteen (14) part-time jobs made available by one employer where all such
part-time jobs added together require a total of 380 hours of work per week (but no such
part-time job requires 40 hours of work or more per week), will equal nine and one-half
(9.5) FTE jobs (380 hours divided by 40 hours per week equals 9.5).
3. FTE jobs do not require the employee to receive benefits from the employer.
Modernization
The replacement and upgrading of existing facilities, which increases the productive input or
output, updates the technology, or substantially lowers the unit cost of operation.
Modernization may result from the construction, alteration or installation of buildings,
structures, fixed machinery or equipment, but shall not be for the purpose of reconditioning,
refurb' or deferred maintenance.
Personal Property
Machinery, equipment, tools, shelving or materials eligible under applicable law for tax
abatement, which can be removed from an authorized facili .
PrOPCIV
Real or Personal Property defined herein that is eligible for tax abatement.
Real Property
The land within an Enterline Zone or a Reinvestment Zone, together with all improvements
and fixtures constructed or otherwise situated thereon.
Tax Ababanent
The Tax Abatement Advisory Committee will be convened from time to time by the Paris
Advisory Committee
Economic Development Corporation to study, review and recommend tax abatements to the
applicable Taxing Jurisdictions in the City of Paris and Lamar County, Texas. The Tax
Abatement Advisory Committee will be composed of one person from each of the Taxing
Jurisdictions: the City of Paris (the City Manager or designee), the County of Lamar (the
County Judge or designee), Paris Junior College (the President or designee), the Chief
Appraiser, of the Lamar County Appraisal District, and the Executive Director of the Paris
Economic Development Corporation Recommendations from the Tax Abatement Advisory
Committee shall be decided by majority vote of the representatives from the three taxing
entities referenced above.
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX B
Abatement Agreement Terms and Conditions
After approval, the Taxing Jurisdictions shall formally pass an order or resolution and authorize
the execution of an agreement with the owner and/or lessee of the authorized facility, which shall
include, but not be limited to the following terms and conditions:
Contract Terms & Conditions
Project
The following project specifics will be included:
Description
1. The base year value.
2. Percent of increased value to be abated each year.
3. The commenconaemt date and the termination date of abatement.
4, Amount of investment and average number of jobs involved during the term of the
agreement.
5. The proposed use of the authorized facility, nature of construction, time schedule, plat,
property description, and improvement list, as provided in the application.
6. A listing of the Lind, member, location, and costs of all proposed improvements of the
property.
7. A statement limiting the uses of the property consistent with the general purpose of
encouraging development or redevelopment of the reinvestment zone during the period that
property tax abatement is in effect.
8. That access to the project is provided to allow for the inspection by Taxing Jurisdictions'
inspectors and officials in order to ensure that the improvements or repairs are made
according to the specifications and conditions of the agreement.
9. That property tax revenue lost as a result of the tax abatement agreement will be recaptured by
the Taxing Jurisdictions if the owner of the property fails to make the improvements or
repairs as provided by the agreement.
10. Each term agreed to by the owner of the property.
11. A requirement that the owner of the property shall certify annually to the Taxing Jurisdictions
that the owner is in compliance with each applicable term of the agreement.
12. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture, administration and assignment, or other provisions that may be required by
state law, or in the discretion of the Taxing Jurisdictions' governing body.
13. That the Taxing Jurisdictions may cancel or modify the agreement if the property owner
fails to comply with the agreement.
Default
If the Taxing Jurisdictions determine that the person or entity receiving an abatement is in default
according to the terms and conditions of its agreement, the Taxing Jurisdictions shall notify the
company or individual in writing at the address stated m the agreement, and if such default a not
cured within a reasonable time specified in such notice ("cure period"), then the agreement may
be modified or terminated without further notice. In the event the company or individual allows
its ad valorem taxes owed to the Taxing Jurisdictions to become delinquent and fails to timely
and properly follow the legal procedures for their protest and/or contest, or violates any of the
terms and conditions of the agreement and fails to cure during the pure period, the agreement then
may be modified or terminated without further notice, and the agreement may provide a formula
for recapture of all or part of the taxes abated. At any time before the expiration, any tax
abatement agreement may be terminated by mutual consent of all parties involved a the same
manner that the agreement was executed.
Confidentiality
Information that is provided to a Taxing Jurisdiction in connection with an application or request
of Proprietary
for tax abatement under these Policies, Criteria and Guidelines, and that describes the specific
Information
processes or business activities to be conducted or the equipment or other property to be located on
the property for which tax abatement is sought is confidential and not subject to public disclosure
until the agreement is executed. Such information in the custody of the Taxing Jurisdictions after
the almement is executed is not confidential hereunder.
FGW—tions
The shall stipulato that and/ or ted es of the Taxing
10
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
11
Jurisdictions will have access to the reinvestment zone during the term of the agreement to inspect
the audxwized facility to determine if the teams and conditions of the agreement are being met. All
inspections will be made only after the giving of at least twenty-four (24) hours' prior notice
and will only be conducted in such a manner as to not unreasonably interfere with the
construction and/or operation of the authorized facility. All inspections will be made with one or
more representatives of the company or individual and in accordance with its safety standards.
Upon completion of construction, the Taxing Jurisdictions shall annually evaluate each authorized
facility receiving abatement to ensure compliance with the agreement and report possible
violations of the to the Taxing Jurisdictions governing bodies.
Modifications
At any time before the expiration of an agreement made under these Policies, Criteria and
of Agreement
Guidelines, the agreemennt may be modified by the parties to the agreement to imhxlc other
provisions that could have been included in the original agreement or to delete provisions that
were contained in the; original agreement. The modification must be made by the same procedure
by which the original agreement was approved and executed. The original agreement, however,
may not be modified to extend the term of the agreement or the term of the abatement granted
therein beyond the time permitted by State law.
Assignment
An agreement may be assigned to a new owner or lessee of the authorized facility only with the
prior written consent of the Taxing Jurisdictions. Any assignment shall provide that the assignee
shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the
same torms and conditions as set out in the agreement, and the Taxing Jurisdiction' approval shall
be subject to the determination of the financial capability of such assignee. Any assigflmaent of an
apremerht shall be to an entity that contemplates the same improvements or repairs to the property,
except to the extent such improvements or repairs have bean completed. No assignment shall be
approved if the assignor or the assignee is indebted to the Taxing Jurisdictions for ad valorem
taxes or other or if any event of deff cult under the agreement remains uncured.
Administration,
1. Each Taxing Jurisdiction shall be responsible for the administration, review, and monitoring of
Contract
tax abatement agreements authorized by them Tarring Jurisdictions under these Policies,
Review,
Criteria and Guidelines. These responsibilities shall include annually verifying participants in
Monitoring and
tax abatement agreements are in full compliance with the tam of the agreement, including
Reporting
completion and submission of all required documents in a timely manner.
2. The Paris City Attorney shall expeditiously advise the Taxing Jurisdictions in writing of any
instances of contract non-compliance by tax abatement participants. In addition, the Paris City
Attorney shall, on an annual basis, conduct a performance review of the activities of each tax
abatement participant and report the findings of such review to the leadership and governing
bodies of each taxing entity.
3. The Taxing Jurisdictions' governing bodies shall retain the right to independently review and
audit the activities of tax abatement participants, and shall be responsible for enforcement of
the terms of any tax abatement agreement authorized hereunder.
4. Annually the Paris City Attorney shall report to each of the governing bodies on its
monitoring and compliance activities and the status of all existin abatement agreements.
11
I *VA
M Doom
&' G y)
Annual Certificate of Compliance/Non-Compliance Year —
Tax Abatement Agreement ("the Agreement") Between the City of Paris, Texas
And Kimberly-Clark Corporation Dated September 25, 2017
THE STATE OF TEXAS
COUNTY OF LAMAR
INITIAL WHERE APPROPRIATE:
OR:
Kimberly-Clark Corporation (the "Company") hereby certifies that:
(1) All ad valorem taxes have been paid to City and all other taxing entities.
(2) The Company has retained sufficient employment levels to efficiently
operate and support its plant operations.
(3) The Company has continuously operated the Property and Improvements
described in the Agreement as a production and manufacturing plant.
(4) The Company submits herewith and attaches hereto copies of the
Employer Reference summary page of its Texas Workforce Commission
Quarterly Reports for each quarter of
(6) All other terms and conditions of this Agreement have been complied
with.
Kimberly-Clark Corporation hereby certifies that the company is not in
compliance with its agreement with City of Paris for the year
Please Circle the number of the item(s) above in which you believe that you have
failed to comply.
VERIFICATION
STATE OF TEXAS §
COUNTY OF LAMAR §
BEFORE ME, the undersigned notary, on this day personally appeared
the affiant, a person whose identity is known to me. After I
administered an oath to affiant, affiant testified:
"My name is . I am capable of making this verification. I have
read the foregoing Certificate of Compliance/Non-Compliance. The facts stated in it are within
my personal knowledge and are true and correct, and I further certify that the Employer
Reference summary pages are true and valid copies of those reports filed with the Texas
Workforce Commission."
Signature of Company Representative
Position/Title
Certificate of Compliance/Non-Compliance
Page 2
Sworn to and subscribed before me this the day of , 20_
Notary Public, State of Texas