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HomeMy WebLinkAboutOrdinance - 2000-O0001 - Adopting New Guidelines And Criteria - 02/10/2000First Reading Second Reading Jan. 13, 2000 February, 2000 Item No. 9$ Item No. 44 ORDINANCE NO.2000-00001 AN ORDINANCE ADOPTING NEW GUIDELINES AND CRITERIA WITH REGARD TO TAX AND OTHER INCENTIVES APPLICABLE TO BUSINESS ENTERPRISES IN LUBBOCK'S ENTERPRISE ZONES WHICH ARE NOT APPLICABLE THROUGHOUT THE CITY; PROVIDING FOR A PUBLIC HEARING AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Lubbock has heretofore established three (3) Enterprise Zones as provided by law, including a North Enterprise Zone, a South Enterprise Zone and a Lubbock International Airport Enterprise Zone (Ordinances No. 9591, No. 9657, No. 10039 and Resolution No. 4287; and WHEREAS, it is desirable to adopt new guidelines and criteria with regard to tax and other incentives applicable to business enterprises in Lubbock's enterprise zones; NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1. THAT City of Lubbock Ordinances No. 9591, No. 9657, and No. 10039 are hereby amended by replacing the Exhibit B originally attached to said ordinances and made a part thereof by reference with the "Guidelines and Criteria for City of Lubbock Enterprise Zones" attached hereto. Further, Exhibits A through D of Resolution No. 4287 shall be replaced by the "Guidelines and Criteria for City of Lubbock Enterprise Zones" attached hereto. SECTION 2. THAT a public hearing to consider this ordinance was held by the City Council on January 13, 2000. SECTION 3. THAT this ordinance shall take effect from and after its passage as the law and charter in such cases provides. AND IT IS SO ORDERED. Passed by the City Council on first reading this 13th day of January , 2000. Passed by the City Council on second reading this loth day of February , 2000. i� �- _ Max Ince, Mayor Pro Tem A' City Secretary CONTENT: Kevin Waller, Business Liaison Officer APPROVED AS TO f G. Vandiver, First Assistant City Attorney ddord/Ezoneguide.ord.doc December 16, 1999 I' M� _ Ordinance No. 2000-0 0001 SECTION 1 QUALIFIED JOB CREATION SALES TAX REFUND IN DESIGNATED ENTERPRISE ZONES The City of Lubbock will make a one-time refund of a part of the local portion of Sales and Use Taxes collected, to qualified businesses, in designated enterprise zones. The refund will be made based on the new permanent jobs created on a full-time basis for the qualified business submitting an application. The maximum amount of the refund will be $250 per qualified employee and a maximum of $2,500 per qualified business. A portion of this refund may be paid by Lubbock County. At no time shall the refund amount exceed the amount of local sales tax paid by the qualified business. Definitions: A. Economically Disadvantaged — An individual who: (1) was unemployed for at least 3 months before obtaining employment with a qualified business; or (2) received public assistance benefits, such as welfare or food stamp payments, or a member of an employee's immediate family receiving Supplemental Security Income or Aid to Families with Dependent Children payments; or (3) has a physical or mental disability; or (4) is homeless; or (5) is a foster child; or (6) is on parole or entering the workplace after being confined in a unit or correctional facility of the institution division of the Texas Department of Criminal Justice or the Texas Youth Commission; or (7) is an individual whose total family income meets the "low income or moderate income limits developed under Section 8, United States Housing Act of 1937. Includes all income by employee, spouse, all dependents, and family members living with employee as of the employment date. B. Local Portion of Sales and Use Tax — that portion of the Sales and Use Tax collected by the State of Texas Comptroller's Office for the City of Lubbock, and amounting to one cent per dollar of purchases of selected items designated in the State law. C. New Permanent Job — A new employment position created over and above the company's current baseline that provides a qualified employee of a qualified business with employment of at least 1,820 hours of work annually. f Qualified Job Creation — Sales Tax Refund in Designated Enterprise Zones 01 /03/00 Page 2 D. Qualified Employee — An employee that works at least 50% of his/her time for the qualified business in the enterprise zone. E. Qualified Business — is a person, including a corporation or other entity that the governing body certifies to have met the following criteria: 1. The person is engaged in or has provided substantial commitment to initiate the active conduct of a trade or business in the zone; and 2. At least 25% of the businesses new employees in the zone are residents of any zone within the governing body's or bodies' jurisdiction or economically disadvantaged individuals; and 3. A franchise or subsidiary of a new or existing business may be certified by the governing body of an enterprise zone as a qualified business if the franchise or subsidiary is located entirely in the zone and maintains separate books and records of the business activity conducted in the zone. Criteria: A. Any firm locating in a designated enterprise zone that meets the requirements for designation as a qualified business as specified above in the definitions section. B. The business must file an application for refund based on employment with the Zone Administrator which includes: 1. Name and address of the business, 2. Name and contact address of the owner/manager making application, 3. Telephone and fax numbers, 4. Date the operation was started in a designated enterprise zone, 5. Total number of employees, 6. List of employees with addresses sorted by zipcode, 7. Time sheets showing hours worked by each employee during the previous year. 8. Documentation of local vendors used during the previous year with proof of purchase. 9. Amount of refund applying for. C. The business must show that twenty five (25) percent of its employees are residents of a designated enterprise zone or economically disadvantaged, and that each resident - employee worked a minimum of 1,820 hours during the previous year. Qualified Job Creation — Sales Tax Refund in Designated Enterprise Zones 01 /03/00 Page 3 D. The business property must be properly zoned. Process: A. The business owner/manager obtains an application from City of Lubbock, Business Development Department: 1625 13`h Street, 2nd Floor, 775-2980 or 775-2019. B. The business owner/manager completes the application and returns it to the Business Liaison Officer (Zone Administrator), Business Development Department, with backup documentation that includes the following: ❑ List of employees with addresses sorted by zipcode ❑ Timesheets showing hours worked by each employee during the previous year. ❑ Documentation of local vendors used during the previous year with proof of purchase. ❑ Amount of refund that the business is applying for. C. Zone Administrator verifies that application is complete and all required documentation is present. D. Zone Administrator verifies that the applicant is a qualified business as specified in the definitions section. E. Zone Administrator verifies documentation (employment, zone employment, local vendors used) through audit and spot checks. F. Once all information is verified, Zone Administrator forwards a certification of the business' eligibility and the number of qualified jobs on which the refund is to be made to Market Lubbock, Inc for a recommendation. G. Market Lubbock forwards its recommendation to the City Manager. H. City Manager approves the designation and jobs and authorizes the Zone Administrator to draw a check for the amount to be refunded (out of the General fund). Qualified Job Creation — Sales Tax Refund in Designated Enterprise Zones 01 /03/00 Wage 4 The Zone Administrator then does a DPR and Invoice for the amount to be refunded and forwards to accounting. Once the check is received it is copied and the copy put in the file and then the check is forwarded to the business. Ordinance No. 2000-0 0001 SECTION 2 SALES TAX REFUND ON LOCAL PURCHASES FOR ENTERPRISE ZONE EMPLOYERS Sales tax refunds on purchases of eligible items from local (City of Lubbock) suppliers will be provided by the City of Lubbock to qualified businesses that have been designated as an enterprise project by the Texas Department of Economic Development, and may be applied for in Lubbock County. Refunds will be made by the City of Lubbock at the beginning of the next fiscal quarter after the completion of the company's first (1s), second (2"d), and third (3rd) years in operation in a designated enterprise zone. A refund of one hundred (100) percent of local sales taxes paid on eligible purchases will be made by the City after the first year of operation. A refund of fifty (50) percent of local sales taxes paid on eligible purchases will be made by the City during the first fiscal quarter after the second and third years of operation in a designated enterprise zone. Definitions: A. Department — Texas Department of Economic Development B. Economically Disadvantaged — An individual who: (1) was unemployed for at least 3 months before obtaining employment with a qualified business; or (2) received public assistance benefits, such as welfare or food stamp payments, or a member of an employee's immediate family receiving Supplemental Security Income or Aid to Families with Dependent Children payments; or (3) has a physical or mental disability; or (4) is homeless; or (5) is a foster child; or (6) is on parole or entering the workplace after being confined in a unit or correctional facility of the institution division of the Texas Department of Criminal Justice or the Texas Youth Commission; or (7) is an individual whose total family income meets the low income or moderate income limits developed under Section 8, United States Housing Act of 1937. Includes all income by employee, spouse, all dependents, and family members living with employee as of the employment date. C. Enterprise Project - is a business that is nominated by an enterprise zone governing body and approved by the Department for state and local benefits. The business must commit to create or retain permanent jobs, make capital investment in the enterprise zone, fill at Sales Tax Refund on Local Purchases For Enterprise Zone Employers 01/03/00 Page 2 least 25% of its new jobs with individuals who are either economically disadvantaged or residents of an enterprise zone within the governing body(ies) jurisdiction, and maintain a level of employment from the date jobs are certified by the Department for at least three years. Criteria A. The business applying for refund must be located in a designated enterprise zone in the City of Lubbock. B. Any firm locating in a designated enterprise zone that has been designated an enterprise project as specified above in the definitions section. C. The property must be properly zoned. D. The business must file an application for refund of local sales taxes collected for the City of Lubbock by the Texas Comptroller's Office. The application must contain the following information: 1. Name and address of the business, 2. Name and contact address of the owner/manager making application, 3. Telephone and fax numbers, 4. The date of the start of the operation in a designated enterprise zone, 5. The date the business was designated an enterprise project by the Texas Department of Economic Development, 6. Employment information, including: ❑ Total number of employees, ❑ Number of employees that are zone residents, ❑ Documentation such as names, address, and zipcodes, and ❑ Employee time sheets 7. List of vendors from whom eligible purchases were made. 8. Documentation of amount of local sales tax paid, such as paid invoices or other proof of payment from vendors. Sales Tax Refund on Local Purchases For Enterprise Zone Employers 01/03/00 Page 3 A. Supplies purchased from local vendors and used in an office operation, such as, but not limited to, paper, writing instruments, incidentals, computers, software and peripherals. B. Supplies purchased from local vendors and used in furnishing the business such as, but not limited to, desks, chairs, cabinets, display cases, and safes. C. Materials purchased from local vendors and used in constructing or renovating facilities such as base materials and finishes. Process: A. The business owner/manager obtains an application from City of Lubbock, Business Development Department: 1625 13'h Street, 2nd Floor, 775-2980 or 775-2019. B. Enterprise Zone Administrator discusses with owner/manager of business the requirement that the business be an enterprise project and the procedure for obtaining that designation. This project designation must be complete before filing for this local sales tax rebate. C. The business owner/manager completes the application and returns it to the Business Liaison Officer (Zone Administrator), Business Development Department, with backup documentation that includes the following: ❑ List of employees with addresses sorted by zipcode ❑ Timesheets showing hours worked by each employee during the previous year. ❑ List of vendors from whom eligible purchases were made with proof of purchase. ❑ Documentation of amount of local sales tax paid. ❑ Copy of Enterprise Zone Project Designation from the Texas Department of Economic Development. D. Zone Administrator verifies that application is complete and all required documentation is present. E. Zone Administrator verifies that the applicant is an enterprise zone project as specified in the definitions section. Sales Tax Refund on Local Purchases For Enterprise Zone Employers 01 /03/00 Page 4 F. Zone Administrator verifies documentation (employment, zone employment, local vendors used, and amount of local sales tax paid) through audit and spot checks. G. Once all information is verified, Zone Administrator forwards a certification of the business' eligibility and the amount of the refund that is to be made to Market Lubbock, Inc. for recommendation. H. Once Market Lubbock, Inc. has made its recommendation, it is forwarded to the City Manager. I. City Manager approves the designation and amount of refund and authorizes the Zone Administrator to draw a check for the amount to be refunded (out of the Community Development fund). J. The Zone Administrator then does a DPR and Invoice for the amount to be refunded and forwards to accounting. Once the check is received it is copied and the copy put in the file and then the check is forwarded to the business. Ordinance No. 2000-00001 SECTION 3 REFUND OF BUILDING PERMIT FEES FOR BUSINESSES LOCATED IN DESIGNATED ENTERPRISE ZONES The City of Lubbock may, at its sole discretion, refund building permit fees paid by businesses that locate within a designated enterprise zone. To qualify for this refund the business must create and retain at least twenty (20) new permanent jobs for a period of one year or add at least one million dollars ($1,000,000) in real estate assessed valuation. This refund will be in the amount of the fee originally paid by the business for the construction or renovation of business facilities within a designated enterprise zone. This refund would be made upon the business' attainment of the job or investment requirement and submittal of an application and necessary documentation within a three-year period of the business' start of operation in a designated enterprise zone. Definitions: A. Building Permit Fees - those fees paid to the City of Lubbock to obtain a permit to construct or renovate facilities located in a designated enterprise zone. B. Economically Disadvantaged - An individual who: (1) was unemployed for at least 3 months before obtaining employment with a qualified business; or (2) received public assistance benefits, such as welfare or food stamp payments, or a member of an employee's immediate family receiving Supplemental Security Income or Aid to Families with Dependent Children payments; or (3) has a physical or mental disability; or (4) is homeless; or (5) is a foster child; or (6) is on parole or entering the workplace after being confined in a unit or correctional facility of the institution division of the Texas Department of Criminal Justice or the Texas Youth Commission; or (7) is an individual whose total family income meets the low income or moderate income limits developed under Section 8, United States Housing Act of 1937. Includes all income by employee, spouse, all dependents, and family members living with employee as of the employment date. C. New Permanent Job - A new employment position created over and above the company's current baseline that provides a qualified employee of a qualified business with employment of at least 1,820 hours of work annually. Building Permit Fee Refunds 01/03/00 Page 2 D. Qualified Business — A person, including a corporation or other entity that the governing body certifies to have met the following criteria: (1) the person is engaged in or has provided substantial commitment to initiate the active conduct of trade or business in the zone; and (2) at least 25% of the businesses new employees in the zone are residents of any zone within the governing body's or bodies' jurisdiction or economically disadvantaged individuals; and (3) a franchise or subsidiary of a new or existing business may be certified by the governing body of an enterprise zone as a qualified business if the franchise or subsidiary is located entirely in the zone and maintains separate books and records of the business activity conducted in the zone. E. Qualified Employee — An employee who works for a qualified business and who performs at least 50% of his service for the business within the enterprise zone. Criteria: A. The business applying for refund must be located in a designated enterprise zone in the City of Lubbock. B. Building permit fees to be refunded must have been paid for construction or renovation of facilities within a designated, enterprise zone. C. The business must meet one of the following criteria: (1) The business applying for this refund is a qualified business and will create and retain twenty (20) new permanent jobs for at least one year. (2) The business will add at least one million dollars ($1,000,000) in real estate assessed valuation. D. The business must file an application for the refund of fees which must contain the following information: 1. Name and address of the business, 2. Name and contact address of the owner/manager making application Building Permit Fee Refunds 01 /03/00 Page 3 3. Telephone and fax numbers, 4. The date of the start of the operation in a designated enterprise zone, and 5. Employment information, including: ❑ Total number of employees, ❑ Number of employees that are zone residents, ❑ Documentation such as names, address, and zipcodes, and Q Employee time sheets 6. Amount of investment to be made, and 7. The date of building permit from the City of Lubbock Process: A. Within three years, after the business' start of operation, the business owner/manager obtains an application from City of Lubbock, Business Development Department: 1625 13"' Street, 2"d Floor, 775-2980 or 775-2019. B. The business owner/manager completes the application and returns it to the Business Liaison Officer (Zone Administrator), Business Development Department, with backup documentation that includes the following: Employment option: ❑ List of employees with addresses sorted by zipcode ❑ Timesheets showing hours worked by each employee during the previous year. Investment option: ❑ Documentation of the addition of at least one million dollars ($1,000,000) in real estate assessed valuation. C. Zone Administrator verifies that application is complete and all required documentation is present. Building Permit Fee Refunds 01/03/00 Page 4 D. Zone Administrator verifies documentation (employment, zone employment, investment, and amount of building permit fee paid) through audit and spot checks. E. Once all information is verified, Zone Administrator forwards a certification of the business' eligibility and the amount of the refund that is to be made to Market Lubbock, Inc. for a recommendation. F. Market Lubbock, Inc. forwards a recommendation to the City Manager on the designation. G. City Manager approves the designation and amount of refund and authorizes the Zone Administrator to draw a check for the amount to be refunded (out of the General fund). H. The Zone Administrator then does a DPR and Invoice for the amount to be refunded and forwards to accounting. Once the check is received it is copied and the copy put in the file and then the check is forwarded to the business.