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1990-040-RES WHEREAS, the enhancement of the local economy best interest of the citizens of Paris, Texas; and RESOLUTION NO. 90-040 WHEREAS, the enhancement of the local economy 1S in the best interest of the citizens of Paris, Texas; and WHEREAS, the creation of specified reinvestment zones and granting of tax abatement within such zones will be reasonably likely to contribute to the retention or expansion of primary employment or to attract major investment that would be a benefit to the property and that would contribute to the economic development within the corporate limits of the City of Paris and Lamar County and to the economy of each; and WHEREAS, the Property Redevelopment and Tax Abatement Act permits municipalities to establish local criteria for the creation of reinvestment zones and the granting of tax abatement within such zones; and, WHEREAS, City of Paris Ordinance No. 89-036 heretofore passed on the 2nd day of October, 1989, did establish Reinvestment Zone No. One; and, WHEREAS, the City Council did in Resolution No. 89-122 passed on the 2nd day of October, 1989, approve the form of a Tax Abatement Agreement with Campbell Soup Company and Campbell Soup (Texas), Inc., which recognized criteria in the form of jobs created and amount of investment to be made and it would be right and proper for such criteria to be reaffirmed, ratified and established as described in Exhibit A, attached hereto; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, that the City of Paris, Paris, Texas, does hereby elect to become eligible to participate in tax abatement pursuant to the Property Redevelopment and Tax Abatement Act; and BE IT FURTHER RESOLVED, that the City of Paris does hereby ratify previously recognized criteria included in the form of a Tax Abatement Agreement with Campbell Soup Company and Campbell Soup (Texas), Inc., which recognized criteria in the form of jobs created and amount of investment to be made. BE IT FURTHER RESOLVED, that the City of Paris, does hereby establish and adopt the Guidelines and Criteria for Reinvestment Zones and Tax Abatement Agreements attached hereto as Exhibit A and incorporated herein for all purposes, which shall govern tax abatement within the reinvestment zones in accordance with the Property Redevelopment and Tax Abatement Act. Passed and adopted on this Ma y, 1 990 . Eric S. ATTEST: GUIDELINES AND CRITERIA FOR REINVESTMENT ZONES AND TAX ABATEMENT AGREEMENTS- FOR THE CITY OF PARIS, TEXAS 1. DEFINITIONS (a) "Abatement" means the full or partial exemption from ad valorem taxes of certain real and tangible personal property in a Reinvestment Zone designated for economic devel- opment purposes. (b) "Agreement" means the written agreement for tax Abatement between a property owner and/or lessee and the city. (c) "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. (d) "Manufacturing Facility" means buiidings and structures, including fixed machinery and equipment, the primary 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. (e) "Modernization" means the replacement and up- grading of existing facilities which increases the productive input or output, updates the technology or substantially lowers the unit cost of operation. I1odernization may result from the construction, alteration or installation of buildihgs, struc- tures, fixed machinery or equipment, but shall not be for the purpose of reconditioning, refurbishing, repairing, or deferred maintenance. (f) "Other Basic industry" means buildings and struc- tures, 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 permanent full-time jobs and bring new wealth into the community. . (g) "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. jmw3:373a/cg1 041090-1 -1- EXHIBIT A (h) "Regional Tourist Entertainment Facility" means buildings and structures, including fixed machinery and equip- ment, used or to be used in providing amusementj 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. (i) "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. (j) "Research Facility" means buildings and struc- tures, 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 theretor 2. DESIGNATION OF A REINVESTMENT ZONE. The city may designate an area as a Reinvestment Zone in accordance with the criteria and procedural requirements set forth in the Act. 3. TAX ABATEMENT AUTHORIZED. The city, through its city council, may agree in writing with the owner andjor 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 tangible 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 make 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 tangible personal property located on the real property in each year covered by the agreement other than tangible 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 tangible personal property. A property owner and/or lessee shall be eligible for tax Abatement only upon the following terms and conditions: (a) Authorized Facilities. A facility may be eligible for Abatement if it is a Manufacturing Facility, Research Facil- ity, Regional Distribution Facility, Regional Tourist Enter- tainment Facility or Other Basic Industry. jmw3:373a/cgl 041090-1 -2- (b) Creation of New Value. Abatement may only be granted for the additional value of eligible real and tangible personal property improvements, subj ect to such limitations as the city may require. ' (c) New and Existing Facilities. Abatement may be granted for new facilities and improvements to existing facil- ities for purposes of modernization or expansion. (d) Eligible Propertv. Abatement may be extended to the value of buildings, structures, fixed machinery and equip- ment, site improvements, tangible personal property, and that office space and related fixed improvements necessary to the operation and administration of the facility; provided, however, that inventory or supplies shall not be eligible for Abatement. (e) Leased Facilities. If a leased facility is granted Abatement, the Agreement may be executed with the lessor and/or lessee, depending upon the particular qircumstances of-the proposed proj ect. If the Agreement is with the lessor, lessor shall demonstrate binding contracts with the lessee to guarantee compliance with the terms of the Agreement. (f) 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. The term of Abatement granted under any Agreement may not exceed that permit- ted 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. Abatement may only be granted for the addi- tional 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 re- quire. If a modernization project includes facility replacement, 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 utilized in evaluating a particular application for Abatement will include, but not be limited to: ( i) the dollar amount of the increase in the tax roll for the proposed project; ( ii) project; the number of jobs created by the proposed (iii) the possible effect the proposed proj ect will have on attracti~g other taxable improvements into the city; .' ' (iv) the nature of the proposed project and its overall effect on the community; jmw3:373a/cgl 041090-1 -3- (v) the proposed project's effect on the safety, health and morals of the City's residents; and (vi) whether the proposed project:will have any substantial long-term adverse effect on the provision of the City's services or its tax base. (g) Economic Qualification. In order to be eligible to receive tax Abatement, the planned improvements: ( i) must be reasonably expected to increase the appraised value of the property; AND (ii) must be expected to prevent the loss of employment, retain or create employment on a permanent full-time basis in the city during the. term of the Agreement; AND (iii) . should not be expec~ed to solely. or primarily have the effect of merely transf~rring 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 reducea; AND (iv) must be necessary because capacity cannot be -provided efficiently utilizing existing improved property when reasonable allowance is made for neces- sary improvements or relevant governmental actions. (h) Taxability. During the term of the Agreement, taxes shall be payable as follows: ( i) the Base Year Value of eligible property as determined each year shall be fully taxable; and (ii) the additional value of eligible property shall be taxable in the manner described in the Agree- ment. The Chief Appraiser of the County shall annually determine an assessment of the real and personal property com- prising the Reinvestment Zone. Each year, the company or indi- vidual receiving Abatement pursuant to an Agreement shall furnish the assessor with such information as may be necessary to deter- mine 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. jmw3:373ajcgl 041090-1 -4- 4. 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. (b) Form. The application shall consist of a com- pleted application form accompanied by (i) general description of the improvements to be undertaken, together with the projected new value to the property; ( ii) descriptive list of the im- provements for which an Abatement is requested; (iii) list of the kind, number and location of all proposed improvements of the property; (i v) metes and bounds description and plat of the proposed Reinvestment Zone; and (v) time schedule for undertaking and completing the proposed improvements. (c) Review. Upon receipt of a completed application, the City Manager shall notify in writing and provide a copy of the application to the members of the city Council. After receipt of an application for Abatement, the city' Manager and the administration shall review the application and, upon completion of its review, make a recommendation to the city Council. (d) Public Hearinq. Prior to entering into an Agree- ment, the city council may, at its option, hold a public hearing at which interested persons shall be entitled to speak and present written materials for or against the approval of the Agreement. (e) Findinqs. In order to enter into an Agreement, the city must find that (i) the terms of the proposed Agreement comply with these Guidelines and Criteria; (ii) there will be no substantial adverse affect on the provision of the city's services or tax base; and (iii) the planned use of the property will not constitute a hazard to public safety, heal~h or morals. (f) Variances. Requests for variance from the pro- V1Slons of these Guidelines may be made in writing to the city Manager; 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 the City council. 5. AGREEMENT. After approval, the city council shall formally pass an ordinance and authorize the execution of an Agreement with the owner and/ or lessee of the facility which shall include, but not be limited to, the following 'terms: jmw3:373a/cgl 041090-1 -5- (a) estimated value to be abated and the Base Year Value; (b) percent of value to be abated each year; (c) the commencement date and the termination date of Abatement; (d) the proposed use of the facility, nature of construction, time schedule, plat, property description and improvement list, as provided in the Application; (e) 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 (f) amount of investment and average number of jobs involved during the term of the Agreement. 6. 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 period of time specified in such notice (IICure Period"), then the Agreement may be terminated without further notice. In the event that the company or individual (i) allows its ad valorem taxes owed the City to become delinquent and fails to timely and properly follovl the legal procedures for their protest and/or contest; or (ii) violates any of the terms and conditions of the Agreement and fails to cure during the Cure Period, the Agreement then may be terminated without further notice, and the Agreement may provide a formula for recapture of all or part of the taxes abated. 7. CONFIDENTIALITY OF PROPRIETARY INFORMATION. Informa- tion that is provided to a taxing unit in connection with an application or request for tax Abatement under these 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 subj ect 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. 8. PROPOSED TAX ABATE~1ENT AGREEMENTS TO BE DECIDED ON AN INDIVIDUAL BASIS. The adoption of these Guidelines by the City Council does not (a) limit the discretion of the City Council to decide whether to enter into a specific tax Abatement agreement, jmw3:373a/cgl 041090-1 -6- or (b) limit the discretion of the city council to delegate to its employees the authority to determine whether or not the city council should consider a particular application or request for tax Abatement, or (c) create any property, contract, or other legal right in any person or entity to have the city Council consider or grant a specific application or request for tax Abatement. 9. INSPECTIONS. The Agreement shall stipulate that employees and/or designated representatives of the city will have access to the Reinvestment Zone during the term of the Agreement to inspect the facility to determine if the terms and conditions of the Agreement are being met. All inspections will be made only after the giving of twenty-four (24) hours' prior notice and will only be conducted in such manner as to not unreasonably interfere with the construction and/or operation of the facility. All inspections will be made with one or more representatives of the company or individual and in accordance with its safety stan- dards. Upon completion of construction, the city shall annual- ly evaluate each facility receiving Abatement to ensure compli- ance with the Agreement and report possible violations to the Agreement to the city Council. 10. MODIFICATIONS OF AGREEMENTS. At any time before the expiration of an Agreement made under these 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 not neces- sary to the original Agreement. The modification must be made by the same procedure by which the original Agreement was approved and executed. The original Agreement, however, may not be modified to extend the term of the Agreement or the term of the Abatement granted therein beyond the time permitted by state law. 11. ASSIGNMENT. An Agreement may be assigned to a new owner or lessee of the facility only with the prior written consent of the City. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all the duties and obligations of the assignor upon the same terms and conditions as set out in the Agreement, and the City's 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 are indebted to the city for ad valorem taxes or other obligations, or if any event of default under the Agreement remains uncured. jmw3:373a/cgl 041090-1 -7- 12. AMENDMENTS. These Guidelines are effective for a two year period from the date of their adoption, unless amended or repealed by the affirmative vote of three-fourths (3/4) of the members of the city Council. ' ADOPTED BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS ON , 1990. jmw3:373a/cgl 041090-1 n -0-