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12-APPROVE RES AUTHORIZING COP TO BECOME ELIGIBLE TO PARTICIPATE IN TAX ABATEMENTS UNDER CH 312 OF TX TAX CODECITY COUNCIL AGENDA ITEM BRIEFING SHEET Submittal Date: Originating Department: Presented By: Agenda Item No.: 7-23-12 Council Date: Legal W. Kent McIlyar 12. 8-13-12 City Attorney RECOMMENDED MOTION: Motion to approve a resolution authorizing the City to become eligible to participate in Tax Abatements under Chapter 312 of the Texas Tax Code and ratifying and approving the existing Guidelines and Criteria for Granting Tax Abatements in the City of Paris. PoLICY ISSUE(s): Economic Development BACKGROUND: On June 25, 2012 and July 13, 2012, the City Council discussed whether to adopt a new policy with revised guidclines and criteria for evaluating tax abatement applications. Upon recommendarion of PEDC and request by, Paris JunioY College and Lamar Counry the City Council decided to re-adopt the existing guidelines and criteria for tax abatement agreements which have been in use for the last six years. The attached Resolution will foYmally notifv the State ComptYOller's Office of the City's intent to participate in tax abatement and will ratify and adopt the existing guidelines and cYiteria foY tax abatement agreements for the next two )Tears. BOARD/ COMMISSION RECOMMENDATION: Nc~NF EXHIBITS: Resolution and Guidelines and Criteria for Granting Tax Abatements ACTION: BUDGET INFO: ❑ Financial Report ❑ Minute Order Expense $ ❑ Department Report Z Resolution Budgeted Amt. $ ❑ Presentation ❑ Ordinance yTD Actual $ ❑ Public Hearing ❑ Other Acet. Name Acct. Number FISCAL NOTES: None City of Paris 51 Revised 6/20/12 DRAFT RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS AUTHORIZING THE CITY TO BECOME 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, on June 25, 2012 and July 23, 2012, City Council deliberated on whether to adopt a new set of Guidelines and Criteria for Tax Abatement or to approve the existing Guidelines and Criteria and the City Council voted unanimously to approve the existing Guidelines and Criteria for Tax Abatements; and, 1VOW, 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 ratifies and approves the current Guidelines and Criteria for Tax Abatements attached hereto and incorporated herein as Exhibit "A". The Guidelines and Criteria is the policy that the City of Paris, Texas will follow in considering and approving Tax Abatement Agreements with property owners within the City Limits. Section 3. This resolution shall become effective from and after the date of passage. PASSED AND APPROVED this 13th day of August, 2012 A.J. Hashmi, M.D., Mayor ATTEST: Janice Ellis, City Clerk APPROVED AS TO FORM: W. Kent McIlyar, City Attorney 52 CITY OF PARIS, TEXAS POLICY STATEMENT CRITERIA AND GUIDELINES FOR TAX ABATEMENT 1. 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 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 is under no obligation to provide tax abatement to any applicant. II. Definitions 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 IV (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. Al i I ExHIBIT ~ 53 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. fl"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 of part-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 (16) part-time jobs made available by one Employer where all such part-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. 1) "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. 54 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 all 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 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)). 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. c r_ Iv. 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 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 abatement may only be granted for additional value of eligible Property 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 terms 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% 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 inveshnent 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. 56 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 if existing 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; 57 4) The nature of the proposed project and its overall effect on the City; 5) The proposed project's effect on the safety, health, and morals of the 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 inerely 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. 58 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 of Jobs, 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: Ca ital Investment Min. Annual Pa roll Created ewly Created obs Possible Abatement lst 3 Years Onl 250 000- 350 000 125 000 10-25 0% $350,0014500,000 $325,000 26-50 30% $500 001-$750 000 $635 000 51-75 0% $750,00141,000,000 $945,000 76-100 50% $1 000 001-$1 250 000 $1 260 000 1 O l-125 60% $1 250 001-$1 500 000 $1 570 000 126-150 70% $1,500,001-$1750,000 $1,880,000 151-175 80% $1 750 001-$2 000 000 $2 190 000 176-200 90% 2 000 001- 3 000 000 2 500 000 O 1-225 100% 59 d) Any project with a capital investment of more than ten million dollars ($10,000,000), 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) 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%. 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); 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: Ca ital Investment Min. Annual Pa roll Created ewly Created obs Possible Abatement lst 3 Years Onl 250 000- 350 000 125 000 10-25 20% $350 001-$500 000 $325 000 26-50 30% $500 001-$750 000 $635 000 51-75 0% $750,001-$1,000,000 $945,000 76-100 50% $1,000,00141,250,000 $1,260,000 101-125 60% $1 250 001-$1 500 000 $1 570 000 126-150 70% $1 500 001-$1 750 000 $1 880 000 151-175 80% $1 750 001-$2 000 000 $2 190 000 176-200 90% 2 000 001- 3 000 000 2 500 000 01-225 100% 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. p n 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%. VIL Tax Abatement for Existing Employers Regarding Real or Personal 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 Personal 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: 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; 61 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 ar 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 fiurther 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 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. 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 Reinveshnent 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. fl 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 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. 62 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; 0 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 tbe 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. 63 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 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 tbe same manner that the agreement was executed. XI. Confidentiality of Proprietary Information. Information 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 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 of the 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. XIII. Inspections. The agreement shall stipulate that employees and/ ar designated representatives of the City 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 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. 64 XIV. Modifications of Agreement. 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 original agreement or to delete provisions that were contained in the original agreement. The modification must be made by the same procedure by which the original agreement was approved and executed. The original agreement, however, may not be modified to extend the term of the agreement or the term of the abatement granted therein beyond the time permitted by state law. XV. Assignment. An agreement may be assigned to a new owner or lessee of the Authorized 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 assignar or the assignee is indebted to the City for ad valorem taxes or other obligations, or if any event of default under the agreement remains uncured. XVL Administration, Contract Review and Monitoring, and Reporting. a) The Paris Economic Development Corporation shall be primarily responsible for the administration, review, and monitoring of tax abatement agreements authorized by the City under these Guidelines. These responsibilities shall include verifying that participants in tax abatement agreements are in full compliance with the terms of the agreement. b) The Paris Economic Development Corporation shall expeditiously advise the City in writing of any instances of contract non-compliance by tax abatement participants. In addition, the Paris Economic Development Corporation 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 City Council. c) The City shall retain the right to independently review and audit the activities of tax abatement participants. d) The City shall be responsible for enforcement of the terms of any tax abatement agreement authorized hereunder. XVII. Amendments. These Guidelines are effective for a two (2) 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. 65 For a tax abatement application or additional information contact: Paris Economic Development Corporation 1125 Bonham Street Paris, Texas 75460 903-784-6964 Fax 903-784-2503 Email parisedc@paristexas.com - - 66