2017-036 - Terminating the Tax Abatement Agreement dated February 25, 2013 between the City of Paris and Campbell Soup Supply Company, LLC relating to the Single Serve Beverage LineRESOLUTION NO. 2017-036
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
APPROVING AND AUTHORIZING AN AGREEMENT TO TERMINATE TAX
ABATEMENT AGREEMENT DATED FEBRUARY 25, 2013 BETWEEN THE
CITY OF PARIS AND CAMPBELL SOUP SUPPLY COMPANY, LLC; MAKING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, heretofore, on February 25, 2013, the City Council of the City of Paris, Texas
and Campbell Soup Supply Company LLC ("Campbell Soup" or "the Company") entered into the
Tax Abatement Agreement (the "Agreement") attached as an Exhibit hereto and incorporated by
reference as if fully set forth herein, related to the Company's Single Serve Beverage Line; and
WHEREAS, heretofore, on October 23, 2017, the City Council approved an Addendum to
Tax Abatement Agreement (the "Addendum"), also attached as an Exhibit and incorporated by
reference as if fully set forth herein, modifying certain terms of said Agreement; and
WHEREAS, the term of said Agreement, as modified by the Addendum, expires on
December 31, 2020; and
WHEREAS, said Agreement relates to property owned by the Company within the City of
Paris, which property is located within an Enterprise Zone as set forth in the Agreement; and
WHEREAS, the Texas Tax Code Sec. 312.208(b) provides that a tax abatement
agreement may be terminated by mutual consent of the parties in the same manner that the
agreement was approved and executed; and
WHEREAS, due to prevailing conditions in the industry, the Company has determined to
replace the Single Serve Beverage Line at its property with a new product line; and
WHEREAS, as a result of this determination, the Company has asked to terminate the
Agreement; and
WHEREAS, at the time of approval of this Agreement to Terminate Tax Abatement
Agreement Dated February 25, 2013 Between the City of Paris, Texas and Campbell Soup Supply
Company LLC (the "Termination Agreement"), Campbell Soup is in compliance with the terms of
the Agreement, as modified by the Addendum; and
WHEREAS, the City Council has agreed to said termination of the Agreement as
modified by the Addendum because the replacement of the Single Serve Beverage Line with a new
product line is in the best interest of the City and the Enterprise Zone in which it is located in that it
will contribute to the sustainability and growth of the Company's property; and
WHEREAS, termination of the Agreement as modified by the Addendum is consistent
with encouraging development of said Enterprise Zone in accordance with the purposes for which
it was created and is in compliance with the City's policy on tax abatements and all applicable laws
and otherwise serves a public purpose in maintaining a major employer in the City;
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 Tax Abatement Agreement dated February 25, 2013
between the City of Paris, Texas and Campbell Soup Company, L.L.C. should be terminated.
Section 3. That the terms and conditions of the proposed Agreement to
Terminate Tax Abatement Agreement Dated February 25, 2013 Between the City of Paris,
Texas and Campbell Soup Supply Company LLC 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 said Termination
Agreement on behalf of the City of Paris
Section S. That this approval and execution of the agreement on behalf of the
City is not conditioned upon approval and execution of any other termination of tax
abatement agreement by any other taxing entity.
DULY PASSED AND APPROVED this 23rd day of October, 2017.
HECITyO \
Stev . Clifford, AA, Mayor
ATTEST:
Ellis, City Clerk
AP ROVED AS TO FORM:
Steph nie H. Harris, City Attorney
THE STATE OF TEXAS )
COUNTY OF LAMAR )
AGREEMENT TO TERMINATE TAX ABATEMENT AGREEMENT DATED
FEBRUARY 25, 2013 BETWEEN THE CITY OF PARIS, TEXAS
AND CAMPBELL SOUP SUPPLY COMPANY LLC
This Agreement to Terminate (the "TERMINATION AGREEMENT") a Tax Abatement
Agreement (the "AGREEMENT") dated February 25, 2013 is entered into by and between the
CITY OF PARIS, TEXAS ("CITY"), a Texas municipal corporation situated in Lamar
County, Texas, acting by its authorized officer whose signature appears below, and
CAMPBELL SOUP SUPPLY COMPANY LLC ("OWNER") acting by and through its
authorized officer whose signature appears below.
WITNESSETH:
WHEREAS, heretofore, on February 25, 2013, the CITY and OWNER entered into the
Tax Abatement Agreement (the "AGREEMENT"), attached as hereto as Exhibit 1 of Exhibit A
hereto and incorporated by reference as if fully set forth herein, related to OWNER's Single
Serve Beverage Line; and
WHEREAS, heretofore, on October 23, 2017, CITY and OWNER entered into an
Addendum to Tax Abatement Agreement (the "ADDENDUM"), attached hereto as Exhibit A
and incorporated by reference as if fully set forth herein, modifying certain terms of said
AGREEMENT; and
WHEREAS, the term of said AGREEMENT, as modified by the ADDENDUM, expires
on December 31, 2020; and
WHEREAS, said AGREEMENT relates to PROPERTY owned by OWNER within the
City of Paris, which PROPERTY is located within an Enterprise Zone as set forth in the
AGREEMENT;
WHEREAS, the Texas Tax Code Sec. 312.208(b) provides that a tax abatement
agreement may be terminated by mutual consent of the parties in the same manner that the
agreement was approved and executed; and
WHEREAS, due to prevailing conditions in the industry, OWNER has determined to
replace the Single Serve Beverage Line at OWNER's PROPERTY with a new product line; and
WHEREAS, as a result of this determination, OWNER has asked to terminate the
AGREEMENT; and
WHEREAS, at the time of this TERMINATION AGREEMENT, OWNER is in full
compliance with the terms of the AGREEMENT, as modified by the ADDENDUM; and
WHEREAS, the CITY has agreed to said termination of the AGREEMENT because the
replacement of the Single Serve Beverage Line with a new product line is in the best interest of
the CITY and the Enterprise Zone in that it will contribute to the sustainability and growth of
OWNER'S PROPERTY; and
WHEREAS, termination of the AGREEMENT is consistent with encouraging
development of said Enterprise Zone in accordance with the purposes for which it was created
and is in compliance with the CITY's policy on tax abatements and all applicable laws and
otherwise serves a public purpose in maintaining a major employer in the CITY;
NOW, THEREFORE,
For all of the foregoing reasons, CITY and OWNER hereto do hereby mutually contract
and agree to terminate the Tax Abatement Agreement dated February 25, 2013 and attached
hereto as Exhibit 1 to Exhibit A and incorporated herein by reference, as modified by the
Addendum to Tax Abatement Agreement dated October 23, 2017 and attached hereto as Exhibit
A and incorporated by reference.
Henceforth, neither CITY nor OWNER owe any further obligations to one another as a
result of the AGREEMENT or the ADDENDUM.
WITNESS our hands this day of , 2017.
THE CITY OF PARIS, TEXAS
LIM
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
2
Steven J. Clifford, M. D., Mayor
CAMPBELL SOUP SUPPLY COMPANY LLC
A Texas Limited Liability Company
go
ATTEST:
Secretary
Richard J. Landers, Vice President
Tax & Real Estate
LIST OF EXHIBITS TO THIS AGREEMENT:
Exhibit A-1: Tax Abatement Agreement dated February 25, 2013
Exhibit A: Addendum to Tax Abatement Agreement dated October 23, 2017.
Exhibit A
THE STATE OF TEXAS
COUNTY OF LAMAR
ADDENDUM TO TAX ABATEMENT AGREEMENT
This Addendum ("the ADDENDUM") to a tax abatement agreement ("the
AGREEMENT") dated February 25, 2013 is entered into by and between the CITY OF PARIS,
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
CAMPBELL SOUP SUPPLY COMPANY LLC acting by and through its authorized officer
whose signature appears below (hereinafter referred to as "OWNER").
WITNESSETH:
WHEREAS, heretofore, on February 25, 2013, the CITY and OWNER entered into the
Tax Abatement Agreement attached hereto as Exhibit 1 and incorporated by reference as if fully
set forth herein related to OWNER's Single Serve Beverage Line; and
WHEREAS, the term of said AGREEMENT expires on December 31, 2020; and
WHEREAS, said AGREEMENT relates to PROPERTY owned by OWNER within the
City of Paris, which PROPERTY is located within an Enterprise Zone as set forth in the
AGREEMENT;
WHEREAS, the Texas Tax Code Sec. 312.208 and tax abatement guidelines in effect in
2013 and on the date of the execution of this ADDENDUM (a copy of which tax abatement
guidelines effective January 11, 2016 are attached hereto as Exhibit 2 and incorporated herein
by reference) allow for modifications of a tax abatement agreement during the term of said
agreement; and
WHEREAS, due prevailing conditions in the industry, OWNER has determined to
replace the Single Serve Beverage Line at OWNER's PROPERTY with a new product line and
therefore, OWNER has requested certain modifications to the AGREEMENT relating to the
number of employees OWNER is required to maintain on the Single Serve Beverage Line at said
PROPERTY during the AGREEMENT; and
WHEREAS, the CITY has agreed to said modifications of the AGREEMENT because
said modifications are consistent with encouraging development of said Enterprise Zone in
accordance with the purposes for which it was created and are in compliance with the CITY's
policy on tax abatements and the ordinance creating such Enterprise Zone adopted by the CITY
and all applicable laws and otherwise serve a public purpose in maintaining a major employer in
the CITY;
NOW, THEREFORE,
The CITY and OWNER hereto do mutually contract and agree to modify the
AGREEMENT as follows:
A. Section V, "Consideration (Jobs)" is hereby amended in its entirety to read as
follows:
"V.
Consideration
(Jobs)
"5.1 OWNER agrees that it will employ forty-one (41) full-time employees to operate
the new line of business described above to be conducted at the PROPERTY, provided, however,
that this number of employees may vary one way or another by a few employees as this
PROJECT nears the commencement of its operations.
"5.2 OWNER agrees retain sufficient employment levels to efficiently operate and
support its plant operations during the term of this Tax Abatement Agreement."
B. All other terms in the original AGREEMENT dated February 25, 2013 remain
unaltered by this ADDENDUM, and remain in full force in effect as if fully set forth herein.
WITNESS our hands this day of , 2017.
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Stephanie H. Harris, City Attorney
THE CITY OF PARIS, TEXAS
Steven J. Clifford, M. D., Mayor
CAMPBELL SOUP SUPPLY COMPANY LLC
A Texas Limited Liability Company
M
Richard J. Landers, Vice President
Tax & Real Estate
2
ATTEST:
Secretary
LIST OF EXHIBITS TO THIS ADDENDUM:
Exhibit 1: Tax Abatement Agreement dated February 25, 2013
Exhibit 2: CITY'S Guidelines and Criteria for Tax Abatements dated January 11,
2016.
Exhibit 1
RESOLUTION N0. 2013-011
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS,
APPROVING AND AUTHORIZING A TAX ABATEMENT AGREEMENT WITH
CAMPBELL SOUP SUPPLY COMPANY LLC; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE
DATE.
WHEREAS, the City Council of the City of Paris has been presented a proposed
agreement by and between the City of Paris, Texas and Campbell Soup Supply Company, LLC,
providing for a commercial and industrial tax abatement for certain improvements, a copy of
which is attached hereto as Exhibit "A", and incorporated herein by reference hereinafter called
"Agreement"; and,
WHEREAS, a public hearing was held before the City Council on February 25, 2013, to
allow interested persons to comment on the proposed Tax Abatement Agreement; and,
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 thereof
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 attached hereto as
Exhibit "A" 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. 2012-072 passed on August 13, 2012.
Section 3. That the terms and conditions of the Tax Abatement Agreement between
the City and Campbell Soup Supply Company, LLC 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 "A".
Section S. 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 February, 2013.
ATTEST:
nice Ellis, City Clerk
APPROVED AS TO FORM:
THE STATE OF TEXAS
COUNTY OF LAMAR
TAX ABATEMENT AGREEMENT
This agreement is entered into by and between the CITY OF PARIS, 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 CAMPBELL SOUP
SUPPLY COMPANY LLC, 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 13d' day of
August, 2012, in Resolution No. 2012-07, elect to be eligible to participate in tax abatement
agreements 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, 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 pursuant to the 2010 Census, the
PROPERTY of the OWNER within City of Paris, Texas, is included within an ENTERPRISE
ZONE, as is shown in the print-out from the Office of the Governor of the State of Texas on its
website in Exhibit A, attached hereto and made a part hereof for all purposes; and
WHEREAS, the contemplated use of the IMPROVEMENTS, as hereinafter defined, in
the amount as set forth in this AGREEMENT upon and within the PROPERTY (herein called
the PROJECT), and the other terms hereof are consistent with encouraging development of said
Enterprise Zone in accordance with the purposes for which it was created and are in compliance
with the CITY's policy on tax abatement incentives and the ordinance creating such Enterprise
Zone adopted by the CITY and all applicable laws; and
WHEREAS, the City Council of the City of Paris did heretofore, on the 13'h day of
August, 2012 in Resolution No. 2012-072, 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;
NOW, THEREFORE,
The Parties hereto do mutually contract and agree as follows:
I.
Term
1.1 The effective date of this AGREEMENT is the 25'h day of February, 2013, with
tax abatement beginning with the tax year commencing January 1, 2014, and expiring on
December 31, 2020.
II.
Area to be Improved
2.1 The PROJECT consists of new building modifications to the real property of the
OWNER, and the addition and installation of equipment and personal property described in
Article III, below, all to be performed by OWNER within an existing building of the OWNER at
the OWNER'S plant in Paris, Lamar County, Texas. Collectively, all such improvements which
are the subject hereof shall be called the "IMPROVEMENTS". The IMPROVEMENTS shall be
located upon and within the OWNER'S current facilities consisting of the OWNER'S land also
described in Exhibit A. attached hereto and made a part hereof for all purposes (as are all
Exhibits which are mentioned herein), and within the building at the location shown within the
drawings attached hereto as Exhibit B. The land and building are herein called the
"PROPERTY".
III.
Improvements
3.1 The installation of the IMPROVEMENTS will require engineering, design and
construction work to prepare the site within OWNER'S building where the new equipment will
be located, and the procurement of equipment, infrastructure and utilities modifications and
electrical and mechanical installation. The IMPROVEMENTS are being made to enable the
OWNER to manufacture single -serve beverages in aluminum containers at the PROPERTY.
The single -serve beverages will consist of red juices, Fusion, potential for teas and potential for
carbonated products. The aluminum container sizes to be manufactured will be 5.5 ounce, 8.4
ounce and 11.5 ounce. The IMPROVEMENTS are described as follows:
A. To the real property of OWNER, building modifications to support proper
operation and sanitation of the installed equipment. This includes utilities, floor,
wall, and ceiling finishes, as well as some structural improvements to the building
to support static, live and dynamic equipment loading.
B. Container Delivery, to consist of depalletizer for purchased aluminum containers
and dedicated container lines by diameter to filling operation.
C. Prep Operation, to consist of multiple ingredient handling systems and hold/pre-
blend tanks, and independent tomato paste standardization system.
D. Blending Operation, consisting of a single 1,000 gallon blend tank, supported by
pre -blend, hold and feed tanks.
2
E. Sterilization Process, consisting of a plate and frame sterilizer and supporting hot
water set.
F. Filling Operation, consisting of a 103 Solburn waterfall filler and closer for 5.5
ounce and 8.4 ounce cans, and a 103 Solburn waterfall filler and closer for 11.5
ounce cans.
G. Cooling Process, consisting of a pasteurizer to provide for future carbonated
capability.
H. Packaging Operation, consisting of pre-printed shrink film multi -packing
equipment, a tray -packer and shrink tunnel; and a palletizer; and stretch wrapper
equipment.
All such IMPROVEMENTS will be described in the CITY'S Certificate of Completion prepared
after the completion and installation of the above described building modifications and
improvements, personal property, machinery and equipment. The description shall be fiunished
by OWNER to CITY in OWNER'S sworn report described in Section 11. 1, below and attached
to CITY'S Certificate of Completion. The description shall also be filed with the Chief Appraiser
of the Lamar County Appraisal District. Said Certificate shall be duly executed by the Mayor of
the City of Paris in the form attached hereto as Exhibit C. The IMPROVEMENTS will be at a
cost equal to or in excess of $24,000,000.00 for the capital cost and installation of the building
,modifications, machinery and equipment, and $2,500,000.00 in expense. Site preparation shall
occur during February and March, in 2013; installation shall commence in May, 2013; and
production is expected to commence in October or November, 2013; provided, that 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
installation 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, or the public enemy, 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 reflected in the Certificate of Completion issued by the City of
Paris, Texas, referred to above.
IV.
Consideration
(Improvements)
4.1 The OWNER agrees and covenants that it will diligently and faithfidly, 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 will procure a valid waiver thereof. In further consideration,
OWNER shall thereafter, from the date a Certificate of Completion is issued, or that the
IMPROVEMENTS are completed as agreed, until the expiration of this AGREEMENT,
3
continuously operate and maintain the PROPERTY, including the specific units of new
machinery and equipment as identified herein, as a food production plant.
V.
Consideration
(Jobs)
5.1 OWNER agrees that it will employ fifty (50) full-time employees to operate the
new line of business described above to be conducted at the PROPERTY, provided, however,
that this number of employees may vary one way or another by a few employees as this
PROJECT nears the commencement of its operation.
5.2 OWNER agrees to retain sufficient employment levels to efficiently operate
and support its plant operations during the term of this Tax Abatement Agreement.
VI.
Default
6.1 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, then the CITY shall give the OWNER written notice of such
default and 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 Property 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 as determined by Section 33.01 of the Property Tax Code of the State of Texas, with all
penalties permitted by the Property Redevelopment and Tax Abatement Act and the Property
Tax Code of the State of Texas, shall be recaptured and will become a debt to the CITY and
shall be due, owing, 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.
VII.
Real and Personal Property Tax Abatement
7.1 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 the ad valorem property
taxes assessed upon the IMPROVEMENTS and otherwise owed to the CITY shall be abated
4
as is estimated in the Property Tax Abatement Schedule attached hereto as Exhibit D. Said
abatement shall be an amount equal to one hundred percent (100%) of the taxes assessed upon
the completed value of the IMPROVEMENTS on January 1, of the year in which this tax
abatement commences (i.e. January 1, 2014), with this tax abatement continuing at the
percenta¢e rate shown in the attached Property Tax Abatement Schedule attached hereto for
each year during the seven (7) year term of this AGREEMENT. This tax abatement shall be
implemented and enforced in accordance with all applicable state and local regulations or valid
waiver 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 property of the OWNER that is not subject to
tax abatement AND WHICH DOES NOT INCLUDE THE IMPROVEMENTS (as defined
herein) shall be deemed to be the values as shown on the tax rolls of the Lamar County
Appraisal District as of January 1, 2013, for Land, Buildings and tangible Personal Property,
which values are not known as of the execution date of this Agreement, but shall include the
same tax accounts held by OWNER with Lamar County Appraisal District as of January 1,
2012. This current abatement, which is the subject of this AGREEMENT, shall extend for a
period of seven (7) years beginning January 1, 2014.
7.2 The abatement granted herein shall be subject to and governed by the POLICY
STATEMENT CRITERIA AND GUIDELINES for TAX ABATEMENT, a copy of which is
attached hereto as Exhibit E. OWNER shall comply with the requirements of Exhibit E in the
performance of this AGREEMENT, save and except that, in the event of a conflict between
the requirements of Exhibit E and this AGREEMENT, this AGREEMENT shall control.
VIII.
No Conflict of Interest
8.1 The OWNER represents and warrants that neither the PROPERTY nor the
IMPROVEMENTS include any real or personal 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.
IX.
Conditions
9.1 The terms and conditions of this AGREEMENT are binding upon the parties
hereto and their successors and assigns.
9.2 It is understood and agreed between the parties that the OWNER, in performing
its obligations hereunder, is acting independently, and the CITY assumes no responsibility or
liability in connection therewith to third parties; and OWNER agrees to indemnify and hold
harmless the CITY therefrom. It is further understood and agreed among the parties that the
CITY, in performing its obligations hereunder, is acting independently, and 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.
5
X.
Compliance Provisions
10.1 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 notice at least
fourteen (14) days in advance 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 December 31, 2014. The Asset Report will provide 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.
10.2 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 are 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 this AGREEMENT during the term of the AGREEMENT. All inspections will be made
only after giving the OWNER 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 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. 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
which is the subject of this AGREEMENT.
XI.
Initial and Annual Reporting
11.1 The OWNER further agrees that it will, within thirty (30) days of completion
of the IMPROVEMENTS, provide the CITY with a sworn report, written on OWNER'S
letterhead and signed by a designated representative of OWNER, which contains the following
information:
(a) A copy of the printout from the Lamar County Appraisal District showing
the market value of the PROPERTY prior to the construction of the
IMPROVEMENTS;
(b) Detailed description of the IMPROVEMENTS;
D
(c) A detailed description of any miscellaneous items of office equipment and
the actual cost of such added office equipment;
(d) A copy of or identification of plans and specifications of constructed
improvements and the location of the same for inspection by CITY'S
certification team;
(e) A detailed list of and the actual cost of added machinery and equipment;
(f) The actual cost of capital IMPROVEMENTS; and,
(g) The date of substantial completion of the IMPROVEMENTS as defined in
paragraph 3.1 hereof.
11.2 The OWNER further agrees that it will provide CITY 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 on the forms provided by the City.
11.3 In addition to the annual report required under Section 11.2 hereof, the
OWNER further agrees that it will provide CITY a copy of its Texas Workforce Commission
Employer's Quarterly Report within thirty (30) days of its filing of the same with the Texas
Workforce Commission.
XII.
Authority to Contract
12.1. This AGREEMENT was authorized by resolution of the City Council at its
regularly scheduled meeting on the 25`s day of February, 2013, authorizing the Mayor to
execute the AGREEMENT on behalf of the CITY.
12.2 This AGREEMENT was entered into by CAMPBELL SOUP SUPPLY
COMPANY LLC (PARIS PLANT) 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.
7
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:
CAMPBELL SOUP SUPPLY COMPANY LLC
Attn: Richard J. Landers, V. P. -Taxes
590 NW Loop 286
Paris, TX 75461-9016
With a cony to:
Michael Caruso, Esq.
Campbell Place
Camden, NJ 08101
CITY:
CITY OF PARIS, TEXAS
Attn: City Manager
P. O. Box 9037
Paris, TX 75461-9037
With a cony to:
City Clerk, City of Paris, Texas (address same as above)
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 this 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.
8
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 February, 2013.
THE CITY OF PARIS, TEXAS
:
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
W. Kent McIlyar, City Attorney
A. J. Hashmi, M. D., Mayor
CAMPBELL SOUP SUPPLY COMPANY LLC
La
ATTEST:
Secretary
Richard J. Landers, Vice President —
Tax & Real Estate
F
LIST OF EXHIBITS TO THIS AGREEMENT:
A = 2010 Designation of Enterprise Zone which includes OWNER'S PROPERTY
B = Drawings showing the building and the location of the IMPROVEMENTS within.the
building
C = CITY'S Certificate of Completion
D = Property Tax Abatement Schedule
E = CITY'S Guidelines and Criteria for Tax Abatements
10
EXHIBIT A TO TAX ABATEMEM AGREEMENT
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UHIBIT B TO TAX ABATEMENT AGREEMENT
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EXHIBIT C To TAX ABATEWNT AGRIEMENT
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CERTIFICATE OF COMPLETION
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS
The City of Paris, Texas, has executed and delivered a Tax Abatement Agreement (the
"Agreement") dated February 25, 2013, with CAMPBELL SOUP SUPPLY COMPANY LLC, a
limited liability company (the "Company"), for certain improvements and other equipment (the
"Improvements") to be installed at the Company's plant located in Paris, Lamar County, Texas,
as described in the Agreement, which plant is located within an ENTERPRISE ZONE
established by the United States Census in 2010.
The Company has complied with all of the terms of the Agreement, and the City of Paris
herein verifies that the Improvements agreed to be built, installed and used have in fact been
completed as provided for in the Agreement.
NOW THEREFORE, the City of Paris authorizes that the Property of the Company, as
described in the Agreement and in Exhibits A and B attached to the Agreement, shall receive a
tax abatement of 100% of the taxes assessed upon the increased value of the Improvements so
installed, over the value in which the property was last determined as of January 1, 2013, for a
duration of seven (7) years, with the tax abatement for the Improvements beginning January 1,
2014.
APPROVED this day of , 20_,
Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
Kent McIlyar, City Attorney
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EXHIBIT E TO TAX ABATEMENT AGREEMENT
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CITY OF PARIS, TEXAS
POLICY STATEMENT
CRITERIA AND GUIDELINES
FOR TAX ABATEMENT
Y. General Purpose and Objectives.
The City of Paris, Texas (herein called the "City") is committed to enhancing the
competitiveness and the expansion potential of the City's manufacturing industry; to attracting and
encouraging new manufacturing industry and investment; to improving the City and its
infrastructure which attracts and supports development; and, to expanding the tax base,
employment opportunities, and the overall quality of life for its citizenry. Therefore, the City will
give consideration, on a case-by-case basis, to providing tax abatement according to state law to
the owners of real property for projects which stimulate economic growth and diversification in
the City.
Tax abatement benefits may be made available to industrial, manufacturing, distribution,
and service facilities currently in the City or locating in the City if located in a designated
Enterprise Zone or Reinvestment Zone. New facilities and structures as well as the expansion
and modernization of existing facilities and sttvctures, will be considered. Evaluation of a tax
abatement request will be based on the information provided in the tax abatement application.
However, the City is under no obligation to provide tax abatement to any applicant.
II. Deflnitions
a) "Abatement" or "abatement" means "tax abatement", which is the full or partial
exemption from ad valorem taxes of certain real and tangible personal property in a
Reinvestment Zone designated for economic development purposes.
b) "Agreement" means the written agreement for tax abatement between a property
owner and/or lessee and the City.
c) "Authorized Facility'. A facility may be eligible for abatement if it is a
Manufacturing Facility, a Research Facility, a Regional Distribution Facility, a Regional Tourist
Entertainment Facility or Other Basic industry (all of which terms are defined below); or if the
facility is a Historic Property defined in Section TV (b) below within a City of Paris Historical
District.
d) "Base Year Value" means the assessed value of eligible property as of January 1,
preceding the date of execution of the agreement plus the agreed upon value of eligible
property improvements made after January 1, but before the execution of the agreement. The
Base Year Value may be adjusted either up or down from year to year as per renditions by the
Lamar County Appraisal District.
e) "Employer" means the owner or lessee of Property who provides Jobs within the
Reinvestment Zone or within the Enterprise Zone, applying for tax abatement.
f) "Enterprise Zone" means an area of land designated as such under Chapter 2303 of
the Texas Government Code.
g) "Jobs" or "a Job" as used herein means a position of full-time employment for an
individual to work 32 hours or more per week for an Employer, in which position the individual
is provided the benefits normally offered by the Employer, such as health insurance, vacation
time 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 service. "Jobs" as used herein includes "Full-
time Equivalent Jobs", as defined below.
h) "Full-time Equivalent Jobs" means a number ofpart time jobs where the hours worked
in each such job is less than 32 hours per week, made available by one Employer and added
together. For example, sixteen (l 6) part-time jobs made available by one Employer where all
such put time jobs added together require a total of 352 hours of work per week (but no such
part-time job requires 32 hours of work or more per week), will equal eleven (11) Full-time
Equivalent Jobs (352 hours divided by 32 hours per week equal 11). Full time Equivalent Jobs
do not require the employee to receive benefits from the Employer.
i) "Manufacturing Facility" means buildings and structures, including fixed machinery
and equipment, the purpose of which is or will be the manufacture of tangible goods or materials
or the processing of such goods or materials by physical or chemical change. Facilities
primarily engaged in assembling component parts of manufactured products are also considered
manufacturing facilities.
j) "Modernization" means 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, refurbishing, repairing, or deferred maintenance.
k) "Other Basic Industry" means buildings and structures, including fixed machinery and
equipment, not elsewhere described, used, or to be used for the production of products or
services which result in the creation of new Jobs and bring new wealth into the City.
l) "Personal Property" means machinery, equipment, tools, shelving or materials eligible
under applicable law for tax abatement, which can be removed from an authorized facility
described in Section N (a) below.
m) "Property" means Real Property or Personal Property defined herein, as is applicable
according to the context where used herein, that is eligible for tax abatement.
n) "Real Property" means the land within an Enterprise Zone or a Reinvestment Zone,
together with a] l improvements and fixtures constructed or otherwise situated thereon.
o) "Regional Distribution Facility" means buildings and structures, including fixed
machinery and equipment, used or to be used primarily to receive, store, service, or distribute
goods or materials where a majority of the goods or services are distributed to points at least 100
miles from its location in the City.
p) "Regional Tourist Entertainment Facility" means buildings and structures, including
fixed machinery and equipment, used or to be used in providing amusement/entertainment
through the admission of the general public where the majority of users reside at least 100 miles
from the City and where the majority of users are likely to stay in the City for more than one day
and will therefore likely utilize local restaurants and hotel/motel accommodations.
q) "Reinvestment Zone" is an area where the City or County has 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.
r) "Research Facility" means buildings and structures, including fixed machinery and
equipment, used or to be used primarily for research or experimentation to improve or develop
new tangible goods or materials or to improve or develop the production processes thereto.
s) 'Tax Abatement Committee" means the committee of persons designated from time
to time by the Paris Economic Development Corporation to study, review and recommend tax
abatement to the applicable taxing entities in the community. The Tax Abatement Committee
will be composed of one person from each of the City (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.
III. Designation of a Reinvestment Zone.
The City or County may designate an ares 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)).
For any area within the jurisdiction of the City 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.
1v. Tax Abatement Authorized.
The City, through its Council, may agree in writing with the owner and/or lessee of
taxable Real 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 lessee of the Property makes
specific improvements or repairs to the Property. An agreement may provide for the exemption
ofthe Real Property in each year covered by the agreement only to the extant 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 abatement may only be granted for additional value of eligible Properly
improvements made subsequent to and specified in an abatement agreement between the City and
the Property owner or lessee subject to such limitation as the City may require. The additional
value must exceed any reduction in the fair market value of other property of the owner already
on the tax role with the jurisdiction of the City. 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 contracts will be conducted by the Paris Economic
Development Corporation, in conjunction with the City Manager or designee to the Tax
Abatement Committee. In determining where and how tax abatement will be utilized, the Tax
Abatement Committee will examine the potential return on the public's investment. Return on
public investment will be measured in terns of (i) Jobs created, (ii) Jobs retained in cases of
existing Employers within the City, and (iii) broadening of the tax base, and expansion of the
economic base.
A property owner and/or lessee shall be eligible for tax abatement only upon the
following terms and conditions.
a) If the Property involved is an Authorized Facility.
b) If the Property involved is a Historic Property. In the City Historic Districts there are
certain commercial and residential tax exemptions allowed. Exterior improvements in the historic
districts are allowed at 100'/o for seven (7) years with a minimum investment of $5,000 for
residential property and $10,000 for commercial property. New residential construction requires
a minimum investment of $100,000 to be considered for a three (3) year 100% exemption. New
commercial construction requires a minimum investment of $200,000, for a 100% tax exemption
for three (3) years.
c) If there will be the creation of new value. Abatements may only be granted for the
additional value of eligible Real and Personal Property improvements, subject to such
limitations as the City may require. Real Property tax abatement 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.
d) If there will be new Authorized Facilities created, or ifexisting Authorized
Facilities will be improved for purposes of modernization or expansion.
e) Eligible Property. 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; provided, however, that inventory or supplies shall not be eligible for
abatement. Eligible property for which abatement may be granted includes nonresidential real
property and/or tangible personal property not located on the real property at any time before the
abatement agreement becomes effective.
f) Leased Authorized Facilities. If a leased Authorized Facility is granted abatement,
the agreement may be executed with the lessor and/or lessee, depending upon the particular
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.
g) Value and Term of Abatement. The City will decide whether to grant tax abatement
to an applicant, and the amount, if any, of such abatement, on a case-by-case basis and in
accordance with these Criteria and Guidelines. The term of abatement granted under any
agreement may not exceed that permitted by applicable state law. 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. Abatement may only be granted for the additional value of
eligible property improvements made pursuant to and listed in the agreement between the City
and property owner and/or lessee subject to such limitations as the City may require. 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). The criteria that will be used in evaluating a particular application for abatement will
include, but not be limited to:
1) The dollar amount of the increase in the tax roll for the proposed project;
2) The number of Jobs created or retained by the Employer involved;
3) The possible effect the proposed project will have on attracting other taxable
improvements into the City;
4) The nature of the proposed project and its overall effect on the City;
S) The proposed project's effect on the safety, health, and morals ofthe City's
residents;
6) Whether the proposed project will have any substantial long-term adverse effect
on the provision of City services or its tax base;
7) Whether the project meets all relevant zoning requirements;
8) Whether the project is consistent with the comprehensive plan of the City or
County of Lamar; and
9) The types and cost of public improvements and services (water and sewer main
extensions, streets and roads, etc.) required of the City and the types and values of
public improvements to be furnished by the applicant.
h) Economic Qualification. In order to be eligible to receive tax abatement, the
planned improvements:
1) Must be reasonably expected to increase the appraised value of the Property;
2) Must be expected to prevent the loss of employment, or the retention or
creation of Jobs in the City during the term of the agreement;
3) Should not be expected to solely or primarily have the effect of merely
transferring existing employment from one part of the City to another
without demonstration of increased future investment (Dollars or Jobs) or
unusual circumstances whereby without such a move employment is likely to
be reduced;
4) Must be necessary because capacity cannot be provided efficiently utilizing
existing improved Property when reasonable allowance is made necessary
improvements or relevant governmental actions.
i) Taxability. During the term of the agreement, taxes shall be payable as follows:
1) The Base Year of eligible property as determined each year by the Lamar
County Appraisal District shall be fully taxable; and
2) The additional value of eligible property above the Base Year Value shall be
taxable in the manner described in the agreement.
The Chief Appraiser of the Lamar County Appraisal District shall annually determine an
assessment of the Real and Personal Property comprising the Reinvestment Zone. Each year, the
Employer, the company or individual receiving abatement pursuant to an agreement shall furnish
the assessor with such information as may be necessary to determine the amount of any
abatement. Once such value has been established, the Chief Appraiser shall notify the affected
jurisdictions which levy taxes on such Property and the Paris Economic Development
Corporation.
The Employer, owner or lessee of eligible Property requesting tax abatement within a
Reinvestment Zone shall, prior to the commencement of eligible property improvements, agree
to expend a designated sum of money and to create or retain a certain number ofJobs, or annual
payroll as further defined below.
V. Tax Abatement for Real Property; Creation of Jobs:
Tax abatement may be made available to Employers creating Jobs with respect to an
Authorized Facility located anywhere within the City or its extra territorial jurisdiction based
on the following:
a) To be eligible for any tax abatement, there must be a minimum capital investment in the
Authorized Facility of $250,000 and at least ten (10) new Jobs added to the Employer's labor
force. .
b) When an abatement percentage has been agreed upon it shall be granted for years
one (1) through three (3); thereafter, there will be a 20% reduction in the original amount abated
beginning with year four (4) and a similar reduction of 20% in each of the next three years until
100% of the Real Property valuation is added to the tax rolls.
c) Criteria for qualification for tax abatement are as follows:
Capital Investment
Mn. Annual
Payroll Created
Newly Created
Jobs
Possible Abatement
1st 3 Years Only)
S250-000-SaSQ.000-
S125,000
10-25
20%
$350,001-$500.000
$325,000
26-50
3OPA
5500 001-5750 000
$635,000
51-75
40GA
$750 001 -SI 000,000
$945,000
76-100
50%
$1000 001-S1 0 000
$1,260,000
101-125
60%
51250 001-S1500 000
$1,570,000
126-150
70%
51 500 001-$1.750.000
$1,880,000
151-175
80%
S1 750 001-$2 000 000
1 $2,190,000 1
176-200
90%
S2,000,001
01-225 1
100%
d) Any project with a capital investment of more than ten million dollars (510,000,000),
accompanied by a newly created minimum annual payroll of two and one-half million dollars
(52,500,000), or creating more than two hundred twenty-five (225) Jobs will be individually
negotiated. No abatement will be granted for more than specified in state law.
e) if a newly created business is looted or will locate within an Enterprise Zone, an
additional 10 to Mo abatement may be available as individually negotiated, with total
abatement not to exceed 100%.
VI. Tax Abatement for Personal Property; Creation of Jobs:
The City recognizes a significant difference in the valuation of real property and
personal property. Because of depreciation schedules, often the abatement of personal property is
basically a tax exemption. For this reason, the abatement schedule for personal property versus real
property is significantly different. If personal property should become obsolete and be replaced
while under an abatement agreement, the replacement personal property is not eligible for
abatement.
a) To be eligible for any tax abatement on Personal Property, there must be a minimum
capital investment of $250,000 in Personal Property and at least ten (10) new Jobs added to the
Employer's labor force.
b) When an abatement percentage has been agreed upon it shall be granted for years
one (1) through three (3); themafter, there will be a 20% reduction in the original amount abated
beginning with year four (4) and a similar reduction of 20% in each of the next three years until
100% of the Real Property valuation is added to the tax rolls.
c) Criteria for qualification for tax abatement are as follows:
Ca itai Investment
Mn. Annual
Pa roll Created
Newly Created
Jobs
Possible Abatement
1st 3 Years Only)
0
$350.001-$500,000
$325,000
26-50
yo -OR -1
3016
$500,0014750.000
S635.000
51-75
40%
5750 001-51 000 000
$945,000
76-100
500/0
$1,000,00141,Z50,000
$1 a6OOOO
101-125
60VO
$1 50 001-$1 500 000
S1,570,000
126-150
70%
Sl 500 001 -SI 750 000
$1,890,000
151-175
900A
$1750 001-5 000000
$2,190,000
176-200
90%
S2,000 -ODI -23,000-000
SL 00.0000-2
d) Any project with a capital investment in personal property of more than three million
dollars ($3,000,000 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) new Jobs
will be individually negotiated. No abatement will be granted for more than specified in state
law.
e) If a newly created business is located or will locate within an Enterprise Zone, an
additional 10 to 20% abatement may be available as individually negotiated, with total
abatement not to exceed 100%.
Vii. Tax Abatement for Existing Employers Regarding Real or Persona Property.
The City recognizes the value of its existing Employers to the well-being of the
community and desires to encourage existing Employers to remain in the City 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 City),
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 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 and IV above, even if no new Jobs or
Newly Created Minimum Annual Payroll are created. In these cases involving existing
Employers, the criteria for tax abatement for improvements to Real Property at Authorized
facilities are identical to that set forth in Article V above (except that no new Jobs or Newly
Created Minimum Annual Payroll are required); and the criteria for tax abatement for new
Pesonal Property added to Authorized Facilities are identical to that set forth in Article VI
above (except that no new Jobs or Newly Created Minimum Annual Payroll are required). In
this regard, however, the City encourages existing Employers to retain as many Jobs and as
much existing Annual Payroll as is economically feasible for the existing Employer to do and
remain competitive in its industry.
VIII. Application.
a) Eligibility. Any present or potential owner of taxable property in the City may
request tax abatement by filing a written request with the City Manager or County Judge, with a
copy of the said application to be forwarded by the applicant to the Executive Director of the
Paris Economic Development Corporation.
b) Form. The application shall consist of a completed application form accompanied by
the following items:
l) A general description of the improvements to be undertaken 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 created, including information
pertaining to anticipated job transfers;
5) 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 economic development incentives requested; and
8) Any other information about the proposed project as may be required by the City or
as deemed desirable by the City.
c) Review. Once the application has been received, the information submitted will be
reviewed by the Tax Abatement Committee for completeness and accuracy. The Committee will
then distribute the application to the appropriate department heads and taxing entities for review
and comment. In addition, no tax abatement application shall be considered for further
processing by the governmental entities unless first approved by the governing board of the
Paris Economic Development Corporation.
d) Public Hearing. The City will comply with certain public notices and hearings
required as mandated by state law under the Property Redevelopment and Tax Abatement Act
prior to the designation of a Reinvestment Zone and execution of a tax abatement agreement. The
City may adopt an ordinance designating a tax abatement Reinvestment Zone only ager 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.
e) Findings. In order to enter into an agreement, the City must find that the terms of the
proposed agreement comply with these Guidelines and Criteria, that there will be no
substantial adverse affect on the provision of City services or tax base, and that the planned use of
the Property will not constitute a hazard to public safety, health or morals. Incident to approval of
any ordinance designating a Reinvestment Zone, the City 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 City after the expiration of the agreement.
f) Variances. Requests for variance from the provisions of these Guidelines may be
made in writing to the City; 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 affirmative vote of three-fourths (3/4) of the members of the City
Council.
IX Agreement.
After approval, the City 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:
a) The Base Year Value;
b) Percent of increased value to be abated each year;
c) The commencement date and the termination date of abatement;
d) Amount of investment and average number of jobs involved during the term of the
agreement;
e) The proposed use of the Authorized Facility, nature of construction, time schedule,
plat, property description, and improvement list, as provided in the application;
f) A listing of the kind, number, location, and costs of all proposed improvements of the
Property;
g) 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;
h) That access to the project is provided to allow for the inspection by City inspectors
and officials in order to ensure that the improvements or repairs are made according to
the specifications and conditions of the agreement;
i) That property tax revenue lost as a result of the tax abatement agreement will be
recaptured by the City if the owner of the Property fails to make the improvements or
repairs as provided by the agreement;
j) Each term agreed to by the owner of the Property;
k) A requirement that the owner of the Property shall certify annually to the City that
the owner is in compliance with each applicable term of the agreement;
1) 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 City Council; and
m) That the City may cancel or modify the agreement if the Property owner fails to
comply with the agreement.
X. Default.
If the City determines that the person or entity receiving an abatement is in default
according to the terms and conditions of its agreement, the City shall notify the company or
individual in writing at the address stated in the agreement, and if such default is 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 City to become delinquent and fails to timely and properly follow the
legal procedures for their protest and/or contest, or vioiates any of the terms and conditions of the
agreement and fails to cure during the Cure 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 in the same manner that the agreement
was executed.
M. Confidentiality of Proprietary Information.
Information that is provided to a taxing unit in connection with an application or request for
tax abatement under thew Guidelines and that describes the specific 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 City after the agreement is
executed is not confidential under these Guidelines.
XII. Proposed Tax Abatement Agreements to be decided on an Individual Basis.
The adoption of these Guidelines by the City does not limit the discretion ofthe City
Council to decide whether to enter into a specific tax abatement agreement, or limit the discretion
of the City Council to delegate to its employees the authority to determine whether or not the
City should consider a particular application or request for tax abatement, or create any property,
contract, or other legal right in any person or entity to have the City Council consider or grant a
specified application or request for tax abatement.
XIIL Inspections.
The agreement shall stipulate that employees and/ or designated representatives ofthe City
will have access to the Reinvestment Zone during the tern of the agreement to inspect the
Authorized Facility to determine if the terms 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 City shall annually evaluate each Authorized
Facility receiving abatement to ensure compliance with the agreement and report possible
violations of the agreement to the City Council.
Exhibit 2
RESOLUTION NO. 2016-003
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, 21
TTEST:
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 infrastructure, 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.
II. 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.The
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 lessee 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.
MWbility 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 particular 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 teems of
the aereement.
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 real 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 eligible for abatement.
Historic
For historic property located in the City of Paris Historic District, see Chapter 30, Article N of the City of
Property
Paris Code of Ordinances — Tax Exemption for Historically Significant Sites. Contact the City of Paris, City
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Ca itO lnves"wnt, Pa off and Job Creation Criteria
Manager's Office for additional information on these and other programs offered by the City of Paris.
Value and
1. The governing bodies of the local Taxing Jurisdictions will decide whether 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 lessee, subject to such limitations as the Taxing Jurisdictions may require.
5. Real property tax abatement 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, health, 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 cost of public improvements and services (water and sewer main extensions, streets and roads,
etc.) required of the Taxing Jurisdictions.
10. The types and values of public improvements to be fiunished by the applicant.
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 effect of merely transferring existing employment
from one part of the Taxing Jurisdictions to another without demonstration of increased future investment
(dollars or jobs) or unusual circumstances whereby without such a move employment is likely 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 determined each year by the Lamar County Appraisal District, shall be
fully 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 reinvestment zone.
4. Each year, the employer, the company or individual receiving an abatement pursuant to an agreement shall
fiunish the assessor with such information 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 property requesting tax abatement within a reinvestment zone
shall, prior to the commencement of eligible property improvements, agree to expend a designated sum of
money and to create or retain a certain number of 'obs, or annual payroll as fiuther defined below.
Ca itO lnves"wnt, Pa off and Job Creation Criteria
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
A tax abatement may be made available to employers who are 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.
1. To be eligible for any tax abatement, there must 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 force.
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 taxing 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
valued on an individual basis by the Lamar County Appraisal District (LCAD). 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 length 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 Capital Investment ($1M minimum investment AND 10 'obs for new em to ers.
Amount of Investment
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
$1,000,000 to $5,000,000
70% 60% 50% 40% 30% 20% 10%
$5,000,001 to $20,000,000
80'/0 70% 60% 50% 40% 300/9 20%
$20,000,001 to $25,000,000
900/0 80% 70% 60% 50% 40% 30%
$25,000,001 and Above
Forprojeets with capital investment above $25M AND $25M in new annual payroll OR
creating more than 225 new jobs, the term and percentage of the abatement are both
ngrodwbk but cannot exceed 10 years or 10096.
9. 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.tracer2.com. (Note: This represents 547 companies, 10,470 jobs and 56% of all private sector employment
in Lamar County.)
c. The taxing jurisdictions and the company must agree to include 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 Existing Jobs
Net New Jobs
Year 1 Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
1. 10 new jobs minimum.
$20% 200%
20%
20%
20%
20%
20%
2. New job wages = or > average annual
wages for private sector jobs in Lamar
County. (FxchAng retail, accommodations, food
service. See hem 9.b. above.)
3. Agree to maintain existing base and new
jobs during the entire term of agreement.
4. *Year 1 cannot exceed 100%.
Vl. 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
Application Process
Eligibility
Any present or potential owner of taxable property in the Taxing Jurisdictions may request tax
abatement by filing a written request with the City Manager, County Judge, or PJC President, with
a copyof the application 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 undertaken 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 created, including information pertaining to anticipated
job transfers (if any).
5. 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 Taxing 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.
3. 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.
8. 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 Hearin
1. The Taxing Jurisdictions will comply with certain public notices and hearings uired as
(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
VIII. 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
Phow 903-784-6964
Fax: 903-784-2503
Website: www.paristexasusa.com
Email: uarisedc(d,)yaristexasusa.com
7
mandated by state law under the Property Redevelopment and Tax Abatement Act prior to the
designation of a reinvestment 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 terms 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 Taxing Jurisdictions
after the expiration of the agreement.
Variances
Requests for 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 term 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 affirmative vote of three-fourths (3/4) of the members of each of the Taxing
Jurisdictions' governing
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 agreement. Nor does it limit their discretion to delegate to their employees
Individual
the authority to determine whether or not the Taxing Jurisdiction 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.
VIII. 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
Phow 903-784-6964
Fax: 903-784-2503
Website: www.paristexasusa.com
Email: uarisedc(d,)yaristexasusa.com
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(Updated 1-11-16)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX A
Term
Deflnilion
Abatement or Tax
The full or partial exemption from ad valorem taxes of certain real and tangible personal
Abatement
property in a Reinvestment Zone designated for economic development purposes.
Agreement or
The written legal agreement for tax abatement between a property owner and/or lessee and
Agreements
the 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 authorized facility definitions
include buildings and structures, including fixed machinery and equipment used in operating
the facility.
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 are also
considered manufacturing facilities.
Regional
Used primarily to receive, store, service, or distribute goods or materials where a majority of
Distribution Facility
the goods or services are distributed to points at least 100 miles from its location in the
Taxing Jurisdictions of Paris and Lamar County.
Regional Tourist
Used in providing amusement/entertairunent 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 are likely to stay in the Taxing Jurisdictions for more than one day and
will therefore likely utilize local restaurants and hotel/motel accommodations.
Research Facility
Used primarily for research or experimentation to improve or develop new tangible goods or
materials or to improve or develop the production 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. healthcare -
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
economy.
Base Year Value
The assessed value of eligible property as of January 1, preceding the date of execution of the
agreement plus the agreed upon value of eligible property improvements made after January
1, but before the execution of the agreement. The Base Year Value may be adjusted either up
or down from year 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 capital investment within the Reinvestment Zone or within the Enterprise 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 Equivalent
The intention of the governing bodies is to provide a company the maximum flexibility in
(FTE) Jobs
running their business and making business decisions, especially related to staffing. The
following definition of FTE will be reflected in all incentive agreements. 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 the hours worked in each such job is less than 40 hours
per week, 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,
refiubishin , repairing, 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 fitcility.
Property
Real Property or Personal Property defined herein that is eligible for tax abatement.
Real Property
The land within an Enterprise Zone or a Reinvestment Zone, together with all improvements
and fixtures constructed or otherwise situated thereon.
Tax Abatement
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 commencement date and the termination date of abatement.
4. Amount of investment and average number of jobs involved during the term of the
agreement.
S. 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 kind, number, 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 in the agreement, and if such default is 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 cure 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 in 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 agreement is executed is not confidential hereunder.
Inspections I
The agreement shall stipulate that employees and/ or designated representatives of the Taxing -
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(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 authorized facility to determine if the terms 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 agreement 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 agreement may be modified by the parties to the agreement to include 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 permitto 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
some terms and conditions as set out in the agreement, and the Taxing Jurisdictions' approval shall
be subject to the determination of the financial capability of such assignee. Any assignment of an
agreement shall be to an entity that contemplates the same improvements or repairs to the property,
except to the extent such improvements or repairs have been completed. No assignment shall be
approved if the assignor or the assignee is indebted to the Taxing Jurisdictions for ad valorem
taxes or other obligations, or if any event of default 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 Taxing 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 terms 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 existing abatement a ents.
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