13 - ABATEMENT POLICY AMENDMENTItem No. 13
memorandum
TO: Mayor & City Council
FROM: John Godwin, City Manager
SUBJECT: ABATEMENT POLICY AMENDMENT
DATE: May 4, 2015
BACKGROUND: On January 14, 2014 the city, county, and college all agreed to an updated
Policy Statement Criteria and Guidelines for Tax Abatement. Those guidelines provide for tax
abatements to projects that will increase taxable value by a minimum of $1 million and increase
the number of jobs by at least ten. For existing employers, the job generation requirement is
waived. All project abatements between the total values of $1 million and $25 million are
subject to a chart which describes the percentages to be granted over a seven year abatement
period. Only those projects over $25 million are eligible for up to a ten -year, 100% abatement
(the maximum allowed by state law). Specific amounts and terms are to be negotiated.
STATUS OF ISSUE: At the April 27 council meeting, the city council indicated a desire to
exempt existing properties not only from the job requirements, but also to remove it from the
Capital Investment chart. This can be done by changing the language found in Section VI.
Making this change will not change the policy in place for the county or college of course, so
unless and until they make a similar change, the jurisdictions will have slightly different policies
in place.
BUDGET: NA.
RECOMMENDATION: Approve policy change.
Draft
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS AUTHORIZING THE CITY TO BE ELIGIBLE TO PARTICIPATE
IN TAX ABATEMENT AND APPROVING GUIDELINES AND CR.I.TERIA
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, the Paris City Council last adopted guidelines and criteria for industrial /commercial
tax abatement on February 10, 2014, however, the City Council desires to amend these guidelines and
criteria to clarify that existing industry may receive a tax abatement that is individually negotiated and
need not comply with the eligibility criteria or matrix for "new industry" as set out in Article V of the
Guidelines and Criteria for Tax Abatement; and
WHEREAS, the City Council of the City of Paris, Texas hereby affirms its intent to be eligible to
participate in tax abatement in accordance with Chapter 312 of the Texas Tax. Code and to adopt the
Guidelines and Criteria for Tax Abatement attached hereto and incorporated herein as Exhibit "A;" and
WHEREAS, a three- quarters majority vote of the City Council of the City of Paris, Texas is
required to amend the Guidelines and Criteria for Tax Abatement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS, THAT:
Section 1. The findings set out in the preamble to this resolution are hereby in all things
approved.
Section 2. The City hereby elects to be eligible to participate in a tax abatement program and
approves and adopts the amended Guidelines and Criteria for Tax Abatement attached hereto and
incorporated herein as Exhibit "A ".
Section 3. This resolution shall become effective from and after the date of passage.
PASSED AND APPROVED this 11th day of May, 2015.
Matt Frierson, Mayor
ATTEST:
Janice Ellis, City Clerk
APPROVED AS TO FORM:
W. Kent McIlyar, City Attorney
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
I. General Purpose and Objectives.
The City of Paris (City), Lamar County Government (County) and Paris Junior College (PJC)
(collectively, herein called the "Taxing Jurisdictions ") are committed to enhancing the
competitiveness and the expansion potential of the local industry; to attracting and encouraging
new manufacturing industry and investment; to improving the City of Paris, Lamar County and
its infrastructure, which attracts and supports development; and, to expanding the tax base,
employment opportunities, and the overall quality of life for its citizens. Therefore, the
governing bodies of the Taxing Jurisdictions will give consideration, on a case -by -case basis, to
providing tax abatements to the owners of real and personal property for projects that stimulate
economic growth and diversification in the geographic areas served by the Taxing Jurisdictions,
according to state law and consistent with these policies, criteria and guidelines.
Tax abatements may be made available to industrial, manufacturing, distribution, service
facilities, or any "primary jobs" creating industry as defined by the Economic Development Act
of the State of Texas. The facility must be currently in, or locating in the areas served by the
Taxing Jurisdictions, and located in a designated Enterprise Zone or Reinvestment Zone. New
facilities and structures as well as the expansion and modernization of existing facilities and
structures, will be considered. Evaluation of a tax abatement request will be based on the
information provided in the tax abatement application. However, the City of Paris, Lamar
County and Paris Junior College are under no obligation to provide tax abatement to any
applicant.
The Paris City Council acts as the lead entity for projects located in the City limits. The Lamar
County Board of Commissioners acts as the lead entity for projects in Lamar County, which are
located outside of the City limits. All governing bodies of the three Taxing Jurisdictions have
adopted this policy, criteria and guidelines and will consider tax abatement requests that qualify
hereunder.
II. Definitions.
Definitions are provided as an Appendix A.
III. Designation of a Reinvestment Zone.
For any facility located within the area served by the Taxing Jurisdictions to be eligible for tax
abatement it must meet the criteria for designation as a tax abatement reinvestment zone as set
forth in the Property Redevelopment and Tax Abatement Act, Texas Tax Code Chapter
312.The City or County may designate an area as a reinvestment zone in accordance with the
criteria and procedural requirements set forth in the Property Redevelopment & Tax Abatement
Act, as amended (Texas Tax Code Sec. 312.401 (b)).
IV. Tax Abatement Authorized.
The Taxing Jurisdictions, through their elected governing bodies, may agree in writing with the
owner and/or lessee of taxable real and/or personal property that is located in a reinvestment zone,
but that is not in an improvement project financed by tax increment bonds, to exempt from
taxation a portion of the value of the real property, or of personal property located on the real
property, or both. The period of the abatement granted under the agreement shall not exceed the
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
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 abatements may only be granted for additional value of eligible property improvements
made subsequent to and specified in an abatement agreement between the Taxing Jurisdictions
and the property owner or lessee subject to such limitation as the Taxing Jurisdictions may require.
The additional value must exceed any reduction in the fair market value of other property of the
owner already on the tax roll within the area served by the Taxing Jurisdictions. Change in
appraised value does not qualify for abatement except in an instance where a previously vacant
authorized facility is utilized. Value added to the tax rolls must come from actual capital
expenditures.
The negotiation of tax abatement agreements will be conducted by the Tax Abatement Advisory
Committee, and facilitated by the Paris Economic Development Corporation. In determining
where and how tax abatements will be utilized, the Tax Abatement Advisory Committee will
examine the potential return on the public's investment. Return on public investment will be
measured in terms of (i) jobs created, (ii) jobs retained in cases of existing employers within the
Taxing Jurisdictions, and (iii) broadening of the tax base, and expansion of the economic base
(e.g. capital investment, payroll, local spending, etc.)
V. Eligibility Criteria for Tax Abatement for Real and Personal Property
A property owner and /or lessee shall be eligible for tax abatement only upon the following
criteria.
Efigibifity 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.
Eligible
1. The property involved must be a newly created or improvements to an existing authorized facility.
Property
2. Eligible property for which abatement may be granted includes nonresidential real property and/or tangible
personal property not located on the real property at any time before the abatement agreement becomes
effective.
3. Abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site
improvements, tangible personal property, and that office space and related fixed improvements necessary
to the operation and administration of the authorized facility.
4. Inventory or supplies shall not be eligible for abatement.
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
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, City
Manager's Office for additional information on these and other programs offered by the City of Paris.
Value and
1. The governing bodies of the local Taxing Jurisdictions will decide whether to grant a tax abatement to an
Term of
applicant, and the amount, if any, of such abatement, on a case -by -case basis and in accordance with these
Abatement
Policies, Criteria and Guidelines.
2. The term of abatements granted under any agreement may not exceed that permitted by applicable
state law.
3. The amount of the abatement shall be based upon a percentage (0 to 100 %) of all or a portion of the
eligible property within the authorized facility.
4. Abatements may only be granted for the additional value of eligible real and personal property
improvements made pursuant to and listed in the agreement between the Taxing Jurisdictions and property
owner and/or lessee, subject to such limitations as the Taxing Jurisdictions may require.
5. Real property tax abatement may be granted only to the extent that its value for each year of the agreement
exceeds its value for the year in which the agreement is executed.
6. If a modernization project includes the replacement of improvements within an authorized facility, the
value eligible for abatement shall be the value of the new unit(s), less the value of the replaced unit(s).
Abatement
The criteria used to evaluate a proposed project application for abatement includes, but is not limited to:
Evaluation
1. The dollar amount of the increase in the tax roll.
Criteria
2. The number of jobs created or retained by the employer involved.
3. The possible effect on attracting other taxable improvements into the Taxing Jurisdictions.
4. The nature of and overall effect on the Taxing Jurisdictions.
5. The effect on the safety, health, and morals of the Taxing Jurisdictions' residents.
6. Any substantial long -term adverse effect on the provision of the Taxing Jurisdictions' services or tax
base.
7. Meeting all relevant zoning requirements.
8. Consistent with the comprehensive plan of the City of Paris and County of Lamar.
9. The types and cost of public improvements and services (water and sewer main extensions, streets and
roads, etc.) required of the Taxing Jurisdictions.
10. The types and values of public improvements to be 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 of jobs in the Taxing
Jurisdictions during the term of the agreement.
3. Should not be expected to solely or primarily have the effect of merely transferring existing employment
from one part of the Taxing Jurisdictions to another without demonstration of increased future investment
(dollars or jobs) or unusual circumstances whereby without such a move employment is likely to be reduced.
4. Must be necessary because capacity cannot be provided efficiently utilizing existing improved property
when reasonable allowance is made for necessary improvements or relevant governmental actions.
Taxability
During the term of the agreement, taxes shall be payable as follows:
1. The base year of eligible property as determined each year by the Lamar County Appraisal District, shall
be fully taxable.
2. The additional value of eligible property above the base year value shall be taxable in the manner
described in the agreement.
3. The Chief Appraiser of the Lamar County Appraisal District shall annually determine an assessment of
the real and personal property comprising the reinvestment zone.
4. Each year, the employer, the company or individual receiving an abatement pursuant to an agreement
shall furnish the assessor with such information as may be necessary to determine the amount of any
abatement.
5. Once such value has been established, the Chief Appraiser shall notify the affected Taxing Jurisdictions,
which levy taxes on such property and also notify the Paris EDC.
6. The employer, owner or lessee of eligible property requesting tax abatement within a reinvestment
zone shall, prior to the commencement of eligible property improvements, agree to expend a designated
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
sum 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 the Taxing Jurisdictions based on the following criteria.
1. To be eligible for any tax abatement, there must be a minimum capital investment in the authorized facility of $1,000,000
and at least ten (10) new jobs added to the new employer's labor force.
2. Any project with a capital investment of more than twenty -five million dollars ($25,000,000), AND accompanied by a
newly created minimum annual payroll of two and one -half million dollars ($2,500,000), OR creating more than two
hundred twenty -five (225) jobs will be individually negotiated.
3. As specified in state law, no abatement will be granted for more than 10 years and the total abatement shall not exceed
100 %.
4. A newly created business must be (or will be) located within an enterprise zone or a designated reinvestment zone.
5. The taxing jurisdictions recognize a significant difference in the valuation of real property versus personal property.
Because of depreciation schedules, the abatement of personal property could result in a tax exemption. For this
reason, the abatement schedule for personal property versus real property may be different. Each industrial account is
looked at and valued on an individual basis by the Lamar County Appraisal District (LCAD). The typical
depreciation used for industrial accounts by LCAD is as follows:
a. Computers — 3 year life
b. Furniture & Fixtures — 10 year life
c. Vehicles — 7 to 10 year life (depending on type)
d. Machinery & Equipment — 15 year life (maybe longer or shorter depending on the type)
6. For each abatement request the Abatement Committee will evaluate the equipment (personal property) investment and
useful life separate from the real estate (real property) investment to determine the length of the abatement for each.
7. If personal property should become obsolete and be replaced while under an abatement agreement, the replacement
personal property is not eligible for abatement.
8. The charts below provide capital investment guidelines to qualify for tax abatement and the related schedule and
percentage of abatement.
For Capital Investment ($1M minimum investment AND 10 jobs for new employers.)
Amount of Investment
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
$1,000,000 to $5,000,000
70%
60%
50%
40%
30%
20%
10%
$5,000,001 to $20,000,000
80%
70%
60%
50%
40%
30%
20%
$20,000,001 to $25,000,000
90%
80%
70%
60%
50%
40%
30%
$25,000,001 and Above
For projects with capital investment above $25MAND $2.5M in new annual payroll OR
creating more than 225 new jobs, the term and percentage of the abatement are both
ne otiab[e, but cannot exceed 10 years or 100%.
4
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
An additional 20% abatement for new job creation is available based on the following requirements:
a. A project that creates a minimum of 10 new jobs.
b. The new job wages are equal to or greater than the current County average wage for all private sector jobs
excluding retail trade and accommodation and food services ($41,158 annually for 2013. Source: Texas
Workforce Commission via www.tracer2.com. (Note: This represents 547 companies, 10,470 jobs and 56% of
all private sector employment in Lamar County.)
c. The taxing jurisdictions and the company must agree to include measuring, tracking and annual reporting of the
net job increases (existing jobs plus new jobs) for the entire term of the abatement agreement.
For Net New Jobs (New Job Creation and Retention of Existing Jobs)
Net New Jobs
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
1. 10 new jobs minimum.
*20%
20%
20%
20%
20%
20%
20%
2. New job wages = or > average annual
wages for private sector jobs in Lamar
County. (Excluding retail, accommodations, food
service. See Item 9.b. above.)
3. Agree to maintain existing base and new
jobs during the entire term of agreement.
4. *Year 1 cannot exceed 100 %.
VI. Tax Abatement for Existing Industry /Employers Regarding Real or Personal
Property.
The Taxing Jurisdictions recognize the value of Existing Employers to the economic well -being
of the City and County. The Taxing Jurisdictions desire to encourage existing employers to
maintain and grow their facilities inside the City and County, grow their employment base and
payroll and remain competitive and successful in their respective industry.
Accordingly, if an existing employer (as opposed to a newly created business or industry
moving into the Taxing Jurisdictions), owns or leases an authorized facility and has plans to
improve such property by constructing new improvements on its real property and /or adding
new personal property to its authorized facility which qualify for tax abatement under these
Policies, Criteria and Guidelines, such employer may be eligible for tax abatement with respect
to such improvements to its real property or its new personal property under the provisions of
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
Article V above, even if no new jobs or newly created minimum annual payroll are created.
Recognizing the importance of Existing Industry and job retention, the Taxing Jurisdictions
may individually negotiate tax abatement agreements with Existing Industry /Employers outside
of the eligibility criteria and matrix set out in Article V above; provided, however, no tax
abatement may exceed a ten -year term as provided by state law.
VII. Application Process
App#catlonProcess
Eligibility
Any present or potential owner of taxable property in the Taxing Jurisdictions may request tax
abatement by filing a written request with the City Manager, County Judge, or PJC President, with
a copy of the application forwarded by the applicant to the Executive Director of the Paris EDC.
Form
The application shall consist of a completed application form accompanied by the following:
1. A general description of the improvements to be undertaken together with the projected new
value to the property and the type of business operation proposed.
2. A detailed descriptive list of the improvements for which abatement is requested.
3. A list of the kind, number, and location of all proposed improvements of the property.
4. A list of the number and type of jobs created, including information pertaining to anticipated
job transfers (if any).
5. A metes and bounds description and plat of the proposed reinvestment zone that shows all
roadways within 200 feet of the reinvestment zone and all existing zoning and land uses
within 200 feet of the reinvestment zone.
6. A time schedule for undertaking and completing the proposed improvements.
7. The type and value of any additional economic development incentives requested.
8. Any other information about the proposed project as may be required by the Taxing
Jurisdictions or as deemed desirable by the Taxing Jurisdictions.
Review
1. All applications will be initially reviewed by members of the Tax Abatement Advisory
Process
Committee.
2. An initial project briefing meeting will be conducted between the company's representatives
and the Tax Abatement Advisory Committee.
3. The Committee will evaluate the request for tax abatement in accordance with these criteria
and guidelines and will make its recommendation to the Paris City Council, Lamar County
Commissioners Court and Paris Junior College Board for their review and approval.
4. After the Paris City Council has been briefed on the proposed tax abatement offer and they
have directed the Committee to move forward, the Paris City Attorney will draft the initial
tax abatement agreement for review by the Tax Abatement Committee, the PEDC Board and
representatives of each Taxing Jurisdiction.
5. Electronic versions of the City's abatement agreement will be provided to the County and
PJC so all agreements have consistent language, terms and conditions.
6. Following Tax Abatement Committee review of the draft agreement, it will be sent to the
applicant's legal counsel for review and comment. Any changes requested by the tax
abatement applicant will be reviewed and considered by the Committee and City Attorney.
7. Once the Agreement is finalized, it will be placed on the PEDC Agenda for review and
action by the PEDC Board.
8. Once the Tax Abatement Agreement has been formally approved by the PEDC Board, the
Agreement shall be forwarded to the Paris City Council, Lamar County Commissioner's
Court and Paris Junior College Board of Regents for final consideration and action.
Public
1. The Taxing Jurisdictions will comply with certain public notices and hearings required as
Hearing
I mandated by state law under the Property Redevelopment and Tax Abatement Act prior to
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
VIII. Abatement Agreement Terms and Conditions.
Appendix B provides many of the terms and conditions to be included in any formal tax
abatement legal agreement.
IX. Amendments to Policies, Criteria and Guidelines
These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of
their adoption, unless amended earlier by the affirmative vote of three - fourths (3/4) of the
members of each governing body (City, County, PJC).
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Phone: 903- 784 -6964
Fax: 903 - 784 -2503
Website: www.paristexasusa.com
Email: parisedc(d),paristexasusa.com
7
the designation of a reinvestment zone and execution of a tax abatement agreement.
2. The lead Taxing Jurisdiction (typically the City of Paris) may adopt an ordinance designating
a tax abatement reinvestment zone only after notice of a public hearing has been published at
least seven (7) days before the date of the hearing, and all other procedural requirements of
Chapter 312 of the Texas Tax Code have been satisfied.
Findings
In order to enter into an agreement, the Taxing Jurisdictions must find that:
1. The terms of the proposed agreement comply with these Policies, Criteria and
Guidelines.
2. There will be no substantial adverse effect on the provision of Taxing Jurisdictions' services
or tax base.
3. That the planned use of the property will not constitute a hazard to public safety, health or
morals.
4. Incident to approval of any ordinance designating a reinvestment zone, the Taxing
Jurisdictions shall fmd that the improvements sought are feasible and practical and would be a
benefit to the land to be included in the reinvestment zone and to the Taxing Jurisdictions
after the expiration of the agreement.
Variances
Requests for variance from the provisions of these Policies, Criteria and Guidelines may be made
in writing to the Taxing Jurisdictions; provided, however, that in no event shall the term of any
abatement exceed the period authorized by applicable state law. Such request shall include a
complete description of the circumstances requiring a variance. Approval of a request for
variance shall require the affirmative vote of three- fourths (3/4) of the members of each of the
Taxing Jurisdictions' governing 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 formal tax
abatement legal agreement.
IX. Amendments to Policies, Criteria and Guidelines
These Policies, Criteria and Guidelines are effective for a two (2) year period from the date of
their adoption, unless amended earlier by the affirmative vote of three - fourths (3/4) of the
members of each governing body (City, County, PJC).
For a tax abatement application or additional information contact:
Paris Economic Development Corporation
1125 Bonham Street
Paris, Texas 75460
Phone: 903- 784 -6964
Fax: 903 - 784 -2503
Website: www.paristexasusa.com
Email: parisedc(d),paristexasusa.com
7
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
APPENDIX A
IF 10
The full or partial exemption from ad valorem taxes of certain real and tangible personal
Abatement or Tax
Abatement
property in a Reinvestment Zone designated for economic development purposes.
Agreement or
The written legal agreement for tax abatement between a property owner and/or lessee and
Agreements
the City of Paris, Lamar County and Paris Junior College.
Authorized
A facility may be eligible for abatement if it is a facility used for manufacturing, research,
Commercial or
regional distribution, regional services, regional tourist entertainment, other basic industry, or
Industrial Facility
any primary jobs creating industry (see definitions below). All authorized facility defmitions
include buildings and structures, including fixed machinery and equipment used in operating
the facility.
Authorized
The City Council of the City of Paris may also designate areas of the City where residential
Residential Facility
properties may be considered for abatement of City taxes only. The City of Paris will
approve their residential abatement policies, criteria and guidelines separate from these
policies.
Manufacturing
The purpose of which is or will be the manufacture of tangible goods or materials or
Facility
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.
Regional
Used primarily to receive, store, service, or distribute goods or materials where a
Distribution
majority of the goods or services are distributed to points at least 100 miles from its
Facility
location in the Taxing Jurisdictions of Paris and Lamar County.
Regional
Used in providing amusement/entertainment through the admission of the general public
Tourist
where the majority of users reside at least 100 miles from the Taxing Jurisdictions and
Entertainment
where the majority of users are likely to stay in the Taxing Jurisdictions for more than
Facility
one day and will therefore likely utilize local restaurants and hotel/motel
accommodations.
Research
Used primarily for research or experimentation to improve or develop new tangible
Facility
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
Service
the creation of new jobs and bring new wealth into the Taxing Jurisdictions (e.g.
Industry
healthcare- related industries).
Primary Jobs
Any industry creating "primary jobs" defined as a job that is available at a company for
Creating
which a majority of the products or services of that company are ultimately exported to
Industry
regional, statewide, national, or international markets infusing new dollars into the
local economy.
Base Year
The assessed value of eligible property as of January 1, preceding the date of execution of the
Value
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 Enterprise Zone.
Reinvestment
An area where the Taxing Jurisdictions have decided to influence development patterns
Zone
and attract major investments that will contribute to the development of the area through
the use of tax abatement for specified improvements. These statues are found in
Chapter 312 of the Texas Tax Code.
Enterprise Zone
An area of land designated as such under Chapter 2303 of the Texas Government Code.
Job or Jobs
A "job" is when an individual works 40 hours per week for an employer, and in the
position the individual is provided the benefits normally offered by the employer, such
as health insurance, vacation and some form of retirement benefit. A job is not a
position filled for the employer as a worker or employee of an employment agency or
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 1 1 - 1 5)
employment service. "Jobs" also includes "Full -time Equivalent Jobs" defined below.
Full-time
The intention of the governing bodies is to provide a company the maximum flexibility in
Equivalent
running their business and making business decisions, especially related to staffing. The
(FTE) Jobs
following definition of FTE will be reflected in all incentive agreements. An FTE is:
1. An individual working 40 hours per week in a job defined above.
2. A number of part-time jobs where the hours worked in each such job is less than 40
hours per week, made available by one employer and added together to total 40 hours
per week. For example, fourteen (14) part-time jobs made available by one
employer where all such part-time jobs added together require a total of 380 hours of
work per week (but no such part-time job requires 40 hours of work or more per
week), will equal nine and one -half (9.5) FTE jobs (3 80 hours divided by 40 hours
per week equals 9.5).
3. FTE jobs do not require the employee to receive benefits from the employer.
Modernization
The replacement and upgrading of existing facilities, which increases the productive
input or output, updates the technology, or substantially lowers the unit cost of
operation. Modernization may result from the construction, alteration or installation of
buildings, structures, fixed machinery or equipment, but shall not be for the purpose of
reconditioning, refurbishing, repairing, or deferred maintenance.
Personal
Machinery, equipment, tools, shelving or materials eligible under applicable law for tax
Property
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
Advisory
Paris Economic Development Corporation to study, review and recommend tax
Committee
abatements to the applicable Taxing Jurisdictions in the City of Paris and Lamar
County, Texas. The Tax Abatement Advisory Committee will be composed of one
person from each of the Taxing Jurisdictions: the City of Paris (the City Manager or
designee), the County of Lamar (the County Judge or designee), Paris Junior College
(the President or designee), the Chief Appraiser of the Lamar County Appraisal
District, and the Executive Director of the Paris Economic Development Corporation.
Recommendations from the Tax Abatement Advisory Committee shall be decided by
majority vote of the representatives from the three taxing entities referenced above.
PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
APPENDIX B
Abatement Agreement Terms and Conditions
After approval, the Taxing Jurisdictions shall formally pass an order or resolution and authorize
the execution of an agreement with the owner and/or lessee of the authorized facility, which
shall include, but not be limited to the following terms and conditions:
Contract Terms & Conditions
Project
The following project specifics will be included:
Description
1. The base year value.
2. Percent of increased value to be abated each year.
3. The commencement date and the termination date of abatement.
4. Amount of investment and average number of jobs involved during the term of the
agreement.
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.
7. A statement limiting the uses of the property consistent with the general purpose of
encouraging development or redevelopment of the reinvestment zone during the period that
property tax abatement is in effect.
8. That access to the project is provided to allow for the inspection by Taxing Jurisdictions'
inspectors and officials in order to ensure that the improvements or repairs are made
according to the specifications and conditions of the agreement.
9. That property tax revenue lost as a result of the tax abatement agreement will be recaptured by
the Taxing Jurisdictions if the owner of the property fails to make the improvements or
repairs as provided by the agreement.
10. Each term agreed to by the owner of the property.
11. A requirement that the owner of the property shall certify annually to the Taxing Jurisdictions
that the owner is in compliance with each applicable term of the agreement.
12. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture, administration and assignment, or other provisions that may be required by
state law, or in the discretion of the Taxing Jurisdictions' governing body.
13. That the Taxing Jurisdictions may cancel or modify the agreement if the property owner
fails to comply with the agreement.
Default
If the Taxing Jurisdictions determine that the person or entity receiving an abatement is in default
according to the terms and conditions of its agreement, the Taxing Jurisdictions shall notify the
company or individual in writing at the address stated in the agreement, and if such default is not
cured within a reasonable time specified in such notice ( "cure period "), then the agreement may
be modified or terminated without further notice. In the event the company or individual allows
its ad valorem taxes owed to the Taxing Jurisdictions to become delinquent and fails to timely
and properly follow the legal procedures for their protest and/or contest, or violates any of the
terms and conditions of the agreement and fails to cure during the cure period, the agreement then
may be modified or terminated without further notice, and the agreement may provide a formula
for recapture of all or part of the taxes abated. At any time before the expiration, any tax
abatement agreement may be terminated by mutual consent of all parties involved in the same
manner that the agreement was executed.
Confidentiality
Information that is provided to a Taxing Jurisdiction in connection with an application or request
of Proprietary
for tax abatement under these Policies, Criteria and Guidelines, and that describes the specific
Information
processes or business activities to be conducted or the equipment or other property to be located on
the property for which tax abatement is sought is confidential and not subject to public disclosure
until the agreement is executed. Such information in the custody of the Taxing Jurisdictions after
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PARIS, TEXAS ECONOMIC DEVELOPMENT CORPORATION
POLICY STATEMENT
GUIDELINES AND CRITERIA FOR TAX ABATEMENT
(Updated 5- 11 -15)
11
the agreement is executed is not confidential hereunder.
Inspections
The agreement shall stipulate that employees and/ or designated representatives of the Taxing
Jurisdictions will have access to the reinvestment zone during the term of the agreement to inspect
the authorized facility to determine if the terms and conditions of the agreement are being met. All
inspections will be made only after the giving of at least twenty -four (24) hours' prior notice
and will only be conducted in such a manner as to not unreasonably interfere with the
construction and/or operation of the authorized facility. All inspections will be made with one or
more representatives of the company or individual and in accordance with its safety standards.
Upon completion of construction, the Taxing Jurisdictions shall annually evaluate each authorized
facility receiving abatement to ensure compliance with the agreement and report possible
violations of the agreement to the Taxing Jurisdictions governing bodies.
Modifications
At any time before the expiration of an agreement made under these Policies, Criteria and
of Agreement
Guidelines, the agreement may be modified by the parties to the agreement to include other
provisions that could have been included in the original agreement or to delete provisions that
were contained in the original agreement. The modification must be made by the same
procedure by which the original agreement was approved and executed. The original agreement,
however, may not be modified to extend the term of the agreement or the term of the abatement
granted therein beyond the time permitted by State law.
Assignment
An agreement may be assigned to a new owner or lessee of the authorized facility only with the
prior written consent of the Taxing Jurisdictions. Any assignment shall provide that the
assignee shall irrevocably and unconditionally assume all the duties and obligations of the
assignor upon the same terms and conditions as set out in the agreement, and the Taxing
Jurisdictions' approval shall be subject to the determination of the financial capability of such
assignee. Any assignment of an agreement shall be to an entity that contemplates the same
improvements or repairs to the property, except to the extent such improvements or repairs have
been completed. No assignment shall be approved if the assignor or the assignee is indebted to
the Taxing Jurisdictions for ad valorem taxes or other obligations, or if any event of default
under the agreement remains uncured.
Administration,
1. The Paris EDC shall be primarily responsible for the administration, review, and monitoring
Contract
of tax abatement agreements authorized by the 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.
Reporting
2. The Paris EDC shall expeditiously advise the Taxing Jurisdictions in writing of any
instances of contract non - compliance by tax abatement participants. In addition, the Paris
EDC shall, on an annual basis, conduct a performance review of the activities of each tax
abatement participant and report the findings of such review to the leadership and governing
bodies of each taxing entity.
3. The Taxing Jurisdictions' governing bodies shall retain the right to independently review and
audit the activities of tax abatement participants, and shall be responsible for enforcement of
the terms of any tax abatement agreement authorized hereunder.
4. Annually the Paris EDC will report to each of the governing bodies on its monitoring and
compliance activities and the status of all existing abatement agreements.
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