20 - Resolution Authorizing Participation in Tax Abatements and approving Guidelines and CriteriaItem Pilo. 20
TO: Mayor & City Council
FROM: John Godwin, City Manager
SUBJECT: TAX ABATEMENT POLICY
DATE: December 21, 2017
BACKGROUND: Municipalities that offer ad valorem tax abatements are required to adopt and
maintain a tax abatement policy. These nay be very broad, or very specific and detailed like the
one used in Paris.
STATUS OF ISSUE: The current policy was approved in January 2016 for a period of two
years, so needs to be re -adopted. I have made a few minor grammar and clerical corrections in
the existing policy. I have also deleted references to the tax. abatement committee, which is now
defunct, and to Paris Junior College, which opted out of the abatement process, about a year ago.
I have also changed requiring approval by the PEDC board to recommendation by that body. All
substantive issues in regard to timing, arnounts, requirements, etc. reinain unchanged.
BUDGET: NA.
RECOMMENDATION. Adopt revised policy, attached.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
AUTHORI ZING THE cu'ry'ro BE ELIGIBLE"TO PARTICIPATE IN PROPERTY
TAX ABATEMENTS AND APPROVING GUIDELINES AND CRITERIA FOR
GRANTING TAX ABATEMENTS IN THE CITY OF PARIS, TEXAS; MAILING
OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, Section 312.002 ofthe'Fexas'Fax ("ode reClUires local taxing units to state every
two years their intent to participate in property tax abatement agreements and to adopt guidelines
and criteria for granting tax abatements; and
WHEREAS, the City Council of the City of Pat -is, Texas hereby reaffirms its intent to be
eligible to participate in property tax abatements hi accordance with Chapter 312 of the TexasTax
(,ode and to adopt the Guidelines and Criteria for Tax Abatement attached hereto and incorporated
herein as Exhibit A; and
WHEREAS, a three-ClUarters majority vote of the City Council of the City of Paris, Texas is
required to anienci the Guidelines and Criteria for Tax Abatenient;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS, THAT:
Section 1. The findings set Out it] the preamble to this resolution are hereby in all things
approved.
Section 2. The City hereby elects to be eligible to participate in a property tax abatement
program and approves and adopts the amended Guidelines and Criteria for 'Fax 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 22nd day of January, 2018.
Steven J. Clifford, M.D., Mayor
ATTEST:
Janice Ellis, City Clerk
Stephanie H. Flarris, City Attorney
(Updated 01-08-18)
POLICY STATEMEN'"F
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
1. General Purpose and Objectives.
The City of Paris (City) and Lamar County Government (County) (collectively, herein called the
"Taxing Jurisdictions") are committed to enhancing the competitiveness and expansion potential
of 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 -ease 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, and Larnar County are under no
obligation to provide tax abaternents to any applicant.
The Paris City Council acts as the lead entity for projects located in the City limits. The Larnar
County Board of Con-imissioners acts as the lead entity for projects in Lamar County, which are
located outside of the City limits. All governing bodies of the Taxing Jurisdictions, have adopted
like policies, criteria and guidelines and will consider tax abatement requests that qualify
thereunder.
11. Definitions.
Definitions are provided as an Appendix A.
11.1. 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
fbith 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 See. 312.401 (b)). Pursuant to Texas Tax Code Sec. 312.20 11,
designation of an area as an enterprise zone under Chapter 2303 of the Texas Government Code
constitutes designation of the area as a reinvestment zone without further hearing or procedural
requirernents other than those provided under said Chapter 2303.
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
(Updated 01-08-18)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
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 improvernents or repairs to the property. An agreement
may provide for the exernption 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 inay only be granted for additional value of eligible property improvements
inade 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.
Because the Policy Statement Criteria and Guidelines for Tax Abatement are created for the
purposes of economic development and the creation and retention of local jobs, the Paris
Economic Development Corporation will be the lead in the effort in articulating this policy to
prospects and local businesses considering expansion and the possible use of tax abatements. The
negotiation of tax abatement agreements will, therefore, be conducted by the Paris Economic
Development Corporation's ("PEDC") executive director, in close consultation with the city
manager and county judge, each representing their respective jurisdictions. In determining
where and how tax abatements will be utilized, the executive director 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 abaternent only upon the following
criteria.
Elleibilitv 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 terms of
the agreement,
Fligible I . The property involved must be a newly created, or improvements to an existum authorized facility,
N
(Updated 01-08-18),
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
Property2 fff:_
�igible 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
etTective.
1
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 IV of the City of
Property Paris Code of Ordinances - Tax Exemption for Historically Significant Sites. Contact the City of Paris,
Community
Development Department 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
Tenn 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 tenii of abatements granted under any agreement may not exceed that permitted by applicable
state law.
3.
The amount of the abatement sliall 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 andYor 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 foi- 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 eftect on the safety, health, and morals of the Taxing Jurisdictions' residents.
6.
Any substantial long-term adverse effect on the provision of the "faxing Jurisdictions' services or tax bases.
7.
Meeting all relevant zoning requirements.
8.
Consistent with the comprehensive plan of the City cif 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 furnished 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 ofjobs 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
Bully taxable.
1
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 conipriSmg the reinvestment zone.
4.
Each year, the employer, company or individual receiving an abatement pursuant to an agreement shall
. ............ . . ..... —
furnish the assessor with such information as may be necessary to determine the amount of any abatement.
(Updated 01-08-18)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX 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 Par -is 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 surn of
money and to create or retain a certain number of jobs, or annual payroll as further defined below.
. . .......... ._ , "
Capital Investment, Payroll and Job Creation Criteria
-- - — -------
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 theTaxing Jurisdictions based on the following criteria.
1. To be eligible for any tax abatement, there must be a mininiurn 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 asignificant 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 oil an individual basis by the Lamar County Appraisal District (LOAD). The typical depreciation used for
industrial accounts by LCAD is as follows:
a, Computers -- 3 year life,
b. Furniture &Fixtures - 10 year life
c. Vehicles 7 to 10 year life (depending on type)
d. Machinery & Equipment - 15 year life (maybe longer or shorter depending on the type)
6, For each abatement request the PEDC 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 becorne obsolete and be replaced while under all 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.
(Ulpdated 01-08-18)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
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. fhe 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
via www.lracerIcom. (Nole: This r(presenis 547 cotnpaniei, 10,470Jobs and 504' o a1117rivate sector empk�jlnient in
www . . ........ . .... . .... - - - -- ---- - -------- 0
Laniar Counl.Y.)
c. The taxingjurisdictions and the company must agree to niclude 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 newi . obs minimum. *201/1.
20%
200% 20%, 20%
20%
20%
I New job wages = or > average annual
wages for private sector jobs in Lamar
,County. (Excluding rdafl, accommodations, lood
service. See Item 9.1-1. atiove.)
3. Agree to maintain existing base and new
jobs during the entire term of agreement.
4. * Y car I cannot exceed 100%0.
V1. Tax Abatement for Existing Employers Regarding Real or Personal Property.
The Taxing Jurisdictions recognize the value of its existing employers to the well-being 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 now 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 01-08-18)
POLICY STATEMENT
CRFFERIA AND GUIDELINES FOR TAX ABATEMENT
waived, provided state law is fully complied with.
'The local taxing jurisdictions encourage existing employers to retain as, many jobs and as much
existing annual payroll as is ceonomically feasible for the existing employer, while remaining
competitive in its industry.
V11. 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, provided state law is fully complied with.
V111. Aunlication Process
Application Process
F-Ng—ib—flity
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 or County Judge, with a copy of the
application forwarded by the applicant to the Executive Director of the Paris EDC.
Forrn
The application shall consist of a completed application form accompanied by the Hlowing:
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
I job transfers (if ally).
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.
9. Any other information about the proposed project as may be required by the Taxing
Jurisdictions or as deemed desirable by the 'i'axiiig :lurisdictions.
Review
1. All applications will be initially reviewed by the PED; C executive director.
Process
2, An initial project briefing meeting will be conducted between the company's representatives,
the PEDC executive director, the city manager, and the county judge,
3. The PEDC executive director will evaluate the request for tax abatement in accordance with
these criteria and guidelines and will make his/her recommendation to the Paris City Council
and Lamar County Commissioners Court for their review and possible approval,
4. After the Paris City Council has been briefed on the proposed tax abatement offer and they
have directed the PEDC executive director to move forward, the Paris City Attorney will draft
the initial tax abatement agreement for review by the PEDC Board and representatives of
each Taxing Jurisdiction.
5. Electronic versions of the City's abatement agreement will be provided to the County so all
agreements have consistent language, terms and conditions.
6. Following 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
I
reviewed by the City Attorney.
7. Once the Agreement is finalized, it will be placed on the PEDC Agenda for board
recommendation.
8. Once the Tax Abatement Agreement has been acted on by the PEDC Board, the Agreement
shall be forwarded to the Paris City Council and Lamar County Commissioner's Court for
final consideration and action,
Public Hearing
1. The Taxing Jurisdictions 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
(Updated O1-08-18)
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 forl-flal 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
mernbers of each governing body (City, County)..
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Phone: 903-784-6964
Fax: 903-784-250�3
Website: w v vml aristexasusa.coin
...... .........
Email:
designation of a reinvestment zone and execution of a tax abatement agreement.
2. The lead Taxing Jurisdiction (typically the City of Paris) may adopt at) 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, healthor
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 ofthese 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 (3,14) of the members of each of the Taxing
Jurisdictions', governing body.
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 forl-flal 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
mernbers of each governing body (City, County)..
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Phone: 903-784-6964
Fax: 903-784-250�3
Website: w v vml aristexasusa.coin
...... .........
Email:
(Updated 01-08-18)
POLICY STATEMENT
CRITERIA AND GUIDELINES POPS TAS ABATEMENT
APPENDIX A
"Terris
Definition
Abatement or Tax
Tire full or partial exemption from ad valorem taxes of certain real and tangible personal
Abatement
property in a Reinvestment Zane designated for econornic development purposes.
Agreement or
The written legal agreement for tax abatement between a property owner and/or lessee and
Agreements
I the City of Paris, Lamar County ai7'd. Yams Junior CcrDlel;e.
Authorized ed
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 ,gobs creatine industry '(see definitions below). .All authorized facility definitions
include buildings and structures, including fixed machinery and equipment used in operating
the facility.
Authorized
"Rile 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 b'e the manufacture of tangible goods or materials or the
Facility
processing of such ,goods or ma'te'rials by physical oi- 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 arnusernent/entertainment through the admission of the general public
Entertainment
where, the majority ol` 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. ..m�. __.
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
.jobs and capital investment within the Reinvestment Zone or within the Enterpiise 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 TaxCode.
Enterprise Zone
.Air area of land designated as such under Chapter 2303 of the Texas Government Code.
Job or Jobs
A "jab" 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 sorne form of retirement benefit'.. A job is not a positron filled for the
employer as a worker or employee of an employment agency ° or employment service. "'Jobs"
also includes "Full-time Equivalent Jabs" defined below.
Full-time Equivalent
The intention of the governing bodies is to provide a company the maximum flexibility in.
(FTE:) Jobs
rurming their business and making business decisions, 'especially related to staffing?. The
following definition of.FTE will be reflected in all incentive agreements. An IF - E is:
�(Updated 01-08-18)
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 pail -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 )line and one-half
(9.5) FTE jabs (380 hours divided by 40 hours per week equals 9.5).
3. FTE )obs do not require the employee to receive benefits from the employer.
Modernization -'-_ -
The replacement and upgrading of existing facilities, which increases tile 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,
Personal Property
........ . .... ..
Machinery, equipment, tools, shelving or materials eligible under applicable law for tax
— -
-.abatement, which can be removed from an authorized facility.
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 1-aniar 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. Recorninendations from the Tax Abatement Advisory
Committee :shall be decided by majority vote of the representatives from the three taxing
. . . . ......................
entities referenced above, . ............. . . . . . . .....
(Updated 01-08-18)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
APPENDIX B
Abatement Agreement Terms and Conditions
After approval, the Taxing Jurisdictions shall fornially 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 inciude&
Description 1. The base year value,
2. Percent of increased value to, be abated each year.
1 The commencement date and the termination date of abatement.
4. Amount of investment and average number of jobs involved during the terin of the
agreement.
5. The proposed use of the authorized facility, nature of construction, time schedule, plat,
property description, and improvement list, as provided in the application,
6. A listing of the kind, number, location, and costs of all proposed improvements of the
property.
T A statement limiting the uses of the property consistent with the general purpose of
encouraging development or redevelopment of tile 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 wilt 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
Default If the Taxing Jurisdictions determine that the person or entity receiving an abatement is in default
according to the tennis 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 inforination in the custody of the Taxing Jurisdictions after
the agreement is executed is not confidential hereunder.
_.._...m
.. ..........
Inspections —............... ..... Tile agreement shall stipulate that employees and/ or designated representatives of the Taxing
10
(Updated g1_08_18)
POLICY STATEMENT
CRITERIA AND GUIDELINES FOR TAX ABATEMENT
V
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 net. 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 Invade 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
_ IT
violations of the agreement to the _f.axr.n Jurisdictiolls l;overnin_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. Tile 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 terns of the abatement granted
therein beyond the time permitted by State law,
Assignment
All agreement may be assigned to a new owner or lessee of the authorized facility only with the
prior written consent of the, Taxing Jurisdictions. Any assignment shall provide that the assignee
shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the
same tertris 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 of 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.
_
Adininistra-non
_ _._...._.
1. Each Tax,in, Jurisdiction shall responsible for the administration, review, and nionitoring of
g p
Contract
tax abatement agreements authorized by theni 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
Deporting
completion and submission ofall required documents in a timely manner.
2. The Maris 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 goveriung
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 agreements.
V