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2021-012 - Re-Authorizing the City to Become Eligible to Participate in Residential Tax Abatements and Approving Guidlines and Criteria for the Residential Tax Abatement ProgramRESOLUTION NO. 2021,,,-012 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS RE -AUTHORIZING THE CITY TO BECOME ELIGIBLE TO PARTICIPATE IN RESIDENTIAL TAX ABATEMENTS AND APPROVING GUIDELINES AND CRITERIA FOR THE RESIDENTIAL TAX ABATEMENT PROGRAMS MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, Sec. 312.002 of the Texas Tax Code requires local taxing entities to state their intent to participate in abatement agreements and to adopt guidelines and criteria for granting tax abatements; and WHEREAS, on October 14, 2013 in Ordinance No. 2013-036, the City Council designated Reinvestment Zone No. 2013-1 for residential tax abatements; and WHEREAS, concurrent with Resolution No. 2013-036 electing to program and approving Guidelines required by statute; and Ordinance No. 2013-036, the City Council also approved be eligible to participate in a residential tax abatement and Criteria for Residential Tax Abatement Program as WHEREAS, on February 9, 2015, the City Council. passed Ordinance No. 2015-002 amending Reinvestment Zone 2013-1 for Residential Tax Abatements to expand it to include all Council Districts in the City and designated the new reinvestment zone as Reinvestment Zone No. 2015-1; and WHEREAS, on January 9, 2017, the City Council approved Resoulution 2017-001 re- authorizing the City to become eligible to participate in residential tax abatements and approving guidelines and criterial for the residential tax abatement program; and WHEREAS, on April 22, 2019, the City Council approved Resoulution 2019-013 re- authorizing the City to become eligible to participate in residential tax abatements and approving guidelines and criterial for the residential tax abatement program; and WHEREAS, in 2021, City Council re -authorized Reinvestment zone 2015-01 and renamed it Reinvestment Zone No. 2020-1; and WHEREAS, pursuant to Texas Tax Code Sec. 312.002(c), guidelines and criteria for tax abatements are effective for two years from the date adopted; and WHEREAS, the City Council continues to desire to participate in a residential tax abatement program in the City of Paris and has been presented Guidelines and Criteria for a Residential Tax Abatement Program; 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 a approved. Section 2. The City hereby elects to be eligible to participate in a residential tax abatement program and adopts the Guidelines and Criteria for Residential Tax Abatement Program 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 12th day of April, 2 0 2 1. ATTEST: k ice Ellis, City Clerk APPROVED AS TO FORM: i Stephtnie H. Harris, City Attorney N Stever Clifford,M.D., Mayor RESIDENTIAL TAX ABATEMENT PROGRAM GUIDELINES AND CRITERIA CITY OF PARIS, TEXAS APRIL 12, 2021 I. GENERAL PURPOSE AND OBJECTIVES The City of Paris will offer residential tax abatement as a stimulus for economic development in designated reinvestment zones located within the corporate city limits of the City of Paris, Texas. The policy of the City is to grant residential tax abatement for new residential structures and modernization, rehabilitation or expansion of investment threshold and comply with these considered on a case-by-case basis. existing residential structures that meet minimum Guidelines and Criteria. All applicants shall be II. DEFINITION OF TERMS Act -means the Property Redevelopment and Tax Abatement Act, Texas Tax Code Ann. 312.001 et. seq., as amended from time to time. Agreement -means a contractual agreement between an applicant and the City of Paris for the purposes of tax abatement. Applicant -means an owner of real property or his authorized agent located in a reinvestment zone or proposed reinvestment zone who requests tax abatement in accordance with these guidelines. Base Year Value —means the assessed value of eligible property on January 1, preceding the date of execution. Eligible Property - means new structure or residential improvements located in a designated Reinvestment Zone. Modernization —means the replacement, expansion and/or upgrading of single-family residential improvements for the purpose of reconditioning, refurbishing or expanding a single-family residence. New Structure -means residential improvements made to a property previously undeveloped which is placed into use by means other than or in conjunction with expansion or modernization. Reinvestment Zone -means an area designated in accordance with the Act by the City of Paris. Only property in a Reinvestment Zone may be eligible for tax abatement. Residential Improvements - means the construction of new single-family residential structures and all the appurtenances thereto, and includes modernization of existing structures. This term does not include duplexes or multi -family structures. Total Facility - means all improvements constructed. Page 1 of 5 Value of Improvements — means the appraised value of the residential improvements as determined by the Lamar County Appraisal District and as described in the tax abatement agreement. III. ELIGIBILITY AND GUIDELINES Any real property located within a designated reinvestment zone and zoned by the City of Paris for single-family residential development is e ligible and may apply for residential tax abatement. As provided in the Act, abatement may only be granted for the value of the Residential Improvements which exceed the base year value of the property and which are listed in an Abatement Agreement between the City of Paris and the property owner,,, subject to such limitations as the City of Paris may require. Minimum Investment — To be eligible for residential tax abatement,, an applicant must construct a new structure on their property or make residential improvements to an existing structure in a minimum amount of twenty percent (20%) of the appraised value of the property as of January Ist of the year that the tax abatement agreement between the applicant and the City is signed. Term and Percentage of Abatement - An applicant who has satisfied all the criteria and guidelines for residential tax abatement as set out herein!, will be eligible for tax abatement in accordance with the schedule below. Abatement will become effective in the tax year following the date of completion of the improvements and appraisal of the improvements by Lamar County Appraisal District (EGAD). IV. SCHEDULE OF ABATEMENT TAX YEAR ABATEMENT* 1 100% 2 100% 3 80% 4 60°/a 5 40% 6 Zero% *Abatement is applied only to the increased value of the residential improvements that exceeds the 1:1ase year value as determined by the Lamar County Appraisal District. V. APPLICATION PROCEDURES dvl..a Applications for residential tax abatement shall be reviewed for completeness. City staff shall determine whether the application satisfies guidelines and criteria and Staff may request additional information or documents from Applicant. City Staff will make final recommendations on each application to City Council. Any person, partnership, organization, corporation or other entity desiring a residential tax abatement to encourage development within a designated Reinvestment Zone shall comply with the following procedural guidelines. All tax abatement applications shall be evaluated on their own merits within the parameters of these Guidelines and Criteria. 1. Preliminary Application Steps A. Applicant or applicant's agent shall submit an "Application for Residential Abatement" contemporaneously with the application for a building permit. If building permit is for new single family residential construction or expansion Page 2 of 5 Tax the or remodeling of a single-family residential structure in an amount that would make the owner eligible for residential tax abatement,, then staff will provide applicant with a form application for residential tax abatement. If the applicant for the building permit is not the owner of the real estate and does not make application for residential tax abatement on behalf of the owner, the city staff shall notify the owner (according to Lamar County Appraisal District records) by certified mail, return receipt requested, that residential tax abatement must be filed with the City within ten (10) business days of receipt of the notice. B. If applicant chooses not to apply for residential tax abatement at the time that the building permit is issued, or if the owner fails to respond to the written notice of availability for residential tax abatement, the opportunity for residential tax abatement is waived. City staff shall make a record to reflect owner's election not to participate in the program or to document that owner did not respond to City's notice of opportunity to participate in the residential tax abatement program. The refusal or waiver to participate in residential tax abatement by the owner or applicant shall be binding on subsequent owners of the real property. C. A complete legal description shall be provided. D. Applicant shall complete all forms and information detailed above and submit all forms to the City of Paris Building Official. 2. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. If necessary, applicant will meet with City staff to discuss details of the application and to prepare presentation of the application to the City Council. 3. The application shall designate whether the structure is new or an existing structure and provide an estimate of the value of improvements. 4. If Application for residential tax abatement is approved- by staff, Applicant must enter into a tax abatement agreement with the City of Paris and as prepared by the City Attorney,, 5,9 If the Applicant's property is not located within a designated reinvestment zone the application will be rejected and returned to Applicant. 6. The City Council reserves the right to amend the boundaries of a reinvestment zone or to designate new reinvestment zones. 7. The City Council reserves the right to amend these policies and guidelines as needed. VL LEGAL DOCUMENTATION PREPARATION The City Attorney will be responsible for drafting the Residential Tax Abatement Agreement in accordance with state law and these Guidelines and Criteria. The legal document will include the following: Page 3 of 5 1. Estimated value of new structure or residential improvements to be constructed,, 2. Percent of value to be abated each year. 3. Effective date and the termination date of abatement. 4,9 Description of the Improvements, schedule of completion, property description and/or site plan. 5. Applicant agrees to make the new structure or residential improvements available for inspection by City of Paris, or its authorized representatives, and Lamar County Appraisal District during it construction and upon completion of the project. 6. Contractual obligations in the event of default'. violation of terms or conditions, delinquent takes, recapture and administration. [REMAINDER OF PAGE BLANK] Page 4 of 5 CITY OF PARIS. TEXAS APPLICATION FOR RESIDENTIAL TAX ABATEMENT Property Owner: Name: Mailing Address: Telephone Number: Contact (if different than owner): Name: Mailing Address: Telephone Number: Property Requesting Tax Abatement: Street Address: Summary Legal Description Lot: Block: Addition: Full Legal Description: Include as an attachment a full legal description with metes and bounds. Improvements: Type of Improvements (please check one). New Construction: Estimated Value of Improvements: Estimated Start Date of Construction: Estimated Date of Completion of Project: Description of Project: Applicant(s): Page 5 of 5 Remodeling: Date: Date: