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HomeMy WebLinkAboutResolution - 4287 - Adopt Enterprise Zone Incentive Criteria & Guidelines - 10_14_1993Resolution No. 4287 October 14, 1993 Item #46 RESOLUTION WHEREAS, the City Council of the City of Lubbock heretofore on February 18, 1993, enacted Ordinance No. 9591, which created two enterprise zones within the City of Lubbock; and WHEREAS, such ordinance provided for certain tax and other local incentives to be available within such enterprise zones which are not available generally throughout the City of Lubbock; and WHEREAS, the City Council of the City of Lubbock hereby adopts certain guidelines and criteria for application to such local incentives within said enterprise zones; NOW THEREFORE: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the City Council of the City of Lubbock hereby approves and adopts guidelines and criteria for the application of the following named local incentives within designated City of Lubbock Enterprise Zones which guidelines and criteria are attached hereto as Exhibits A through D and are made a part hereof for all intents and purposes. A) Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock. B) Sales Tax Refund on Local Purchases for Enterprise Zone Employers. C) Qualified Job Creation Sales Tax Refund in Designated Enterprise Zones. D) Refund of Building Permit Fees for Businesses located in Designated Enterprise Zones. Additional local incentives may be added or deleted by the governing body during the life of the enterprise zones as required to obtain the best possible mix of incentives to insure the success of the enterprise zone program. Passed by the City Council this 14th day of October 1993. ATTEST: C�o Retty-M.—John-sop, City Secretary APPRO}GEQ AS TO CONTENT: ,,uirector of business Dev APPROVED AS TO FORM: ffina a ever, trst ssis City Attorney DGV:dj/AGENDA-D2/ENTRPRSE.RES rev. 09/13/93 - 2 - RESOLUTION WHEREAS, a joint committee composed of members of the Lubbock County Commissioners Court, Lubbock Independent School District and the Lubbock City Council was formed in August, 1992, to evaluate the potential of enterprise zone creation in Lubbock, Texas; and WHEREAS, there have been created two enterprise zones within the Lubbock County; and WHEREAS, the joint committee has recommended a proposed set of incentives to spur investment in the proposed enterprise zones; and WHEREAS, such zones provide for certain tax and other local incentives to be available within such enterprise zones which are not available generally throughout the Lubbock County; and WHEREAS, the Board of Trustees of Lubbock Independent School District hereby approve certain guidelines and criteria for application to such local incentives within said enterprise zones; NOW THEREFORE: BE IT RESOLVED BY THE BOARD OF TRUSTEES OF LUBBOCK INDEPENDENT SCHOOL DISTRICT: THAT the Board of Trustees of Lubbock Independent School District hereby approve the attached uniform guidelines and criteria for the application of the local incentives within designated Enterprise Zones which guidelines and criteria are attached hereto as Exhibits A through D and are made a part hereof for all intents and purposes. Additional local incentives may be added or deleted as needed during the life of the enterprise zones as required to obtain the best possible mix of incentives to insure the success of the enterprise zone program. Passed b 4th ATTEST: the Board of Trustees of An of 8epf;etaber, 1993. October September 22, 1993 Lubbock Independent School District this RESOLUTION WHEREAS, a joint committee composed of members of the Lubbock County Commissioners Court, Lubbock Independent School District and the Lubbock City Council was formed in August, 1992, to evaluate the potential of enterprise zone creation in Lubbock, Texas; and WHEREAS, there have been created two enterprise zones within the Lubbock County; and WHEREAS, the joint committee has recommended a proposed set of incentives to spur investment in the proposed enterprise zones; and WHEREAS, such zones provide for certain tax and other local incentives to be available within such enterprise zones which are not available generally throughout the Lubbock County; and WHEREAS, the County Commissioners of the Lubbock County hereby approve certain guidelines and criteria for application to such local incentives within said enterprise zones; NOW THEREFORE: BE IT RESOLVED BY THE COUNTY COMMISSIONERS OF LUBBOCK COUNTY: THAT the County Commissioners of the Lubbock County hereby approve the attached uniform guidelines and criteria for the application of the local incentives within designated Enterprise Zones which guidelines and criteria are attached hereto as Exhibits A through D and are made a part hereof for all intents and purposes. Additional local incentives. may be added or deleted as needed during the life of the enterprise zones as required to obtain the best possible mix of incentives to insure the success of the enterprise zone program. Passed by the Lubbock County Commissioners Court this lath day of :October , 1993. ATTEST: ecretary - Ann Davidson DG7:dw/agenda-D2/Entr%one.res rev. September 20, 1993 C O M M I S S I O N E R S' C 0 U R T R E G L A R M E E T I N G 0 C T 0 B E R 1 1, 1 9 9 3 i BE IT REMEMBERED that on the lath day of October, 1993, there was held a Regular Meeting of the Lubbock County Commissioners' Court in and for the County of Lubbock, the following members present: DON MCBEATH COUNTY JUDGE, PRESIDING KENNY MAINES COMMISSIONER, PRECINCT #1 JAMES KITTEN COMMISSIONER, PRECINCT #2 GILBERT FLORES COMMISSIONER, PRECINCT #3 ALTON BRAZELL COMMISSIONER, PRECINCT #4 RESOLUTION APPROVED TWO- ENTERPRISE ZONES - LUBBOCK COUNTY Upon a motion by James Kitten, seconded by Gilbert Flores, the Court unanimously voted approving a Resolution supporting two enterprise zones within Lubbock County. STATE OF TEXAS COUNTY OF LUBBOCK I, Ann Davidson, County Clerk and Ex-Officio Clerk of the Lubbock County Commissioners' Court, do hereby certify that the above and foregoing and the attached one page are true and correct copies of a portion of the minutes of the Lubbock County Commissioners' Court meeting in regular session on the llth day of October, 1993. Witness my hand and seal of office, this the 12th day of October, 1993. ANN DAVIDSON, COUNTY CLERK AND EX-OFFICIO CLERK OF THE LUBBOCK COUNTY COMMISSIONERS' COURT, LUBBOCK COUNTY, TEXAS. Ann Davidson, County Clerk Lubbock County, 1Texas CITY OF LUBBOCK AGENDA ITEM SUMMARY ITEM #/SUBJECT: #46 Consider a resolution to adopt enterprise zone incentive criteria and guidelines. BACKGROUND/DISCUSSION: On February 18, 1993, the City Council created two enterprise zones within the City of Lubbock. These zones provided for certain incen- tives to be available within the enterprise zones which are not avail- able throughout the City of Lubbock. After months of careful evalua- tion, the enterprise zone incentive committee chaired by Councilman Randy Neugebauer recommends to the Council the following criteria and guidelines for local incentives within the enterprise zones. 1. Commercial tax abatement (applies in enterprise zones only). Eligible uses are: commercial facilities classified as office, service or retail. Types of uses which may be abated: Improvements made as a part of the construction, expansion or renovation of a new or existing facility. Economic criteria for eligibility are: No dollar amounts are specifically required. Company constructing, expanding or renovating a facility must create at least five new jobs. Term and amount of abatement are: Term is up to five years as determined by negotiation. Amount is up to 100 per cent of the value of improvements as determined by negotiation. 2. Sales tax refund on local purchases. Criteria are: Business must be located in a designated enterprise zone. Business must have 25 per cent of its workforce made up of zone residents. Business must complete and submit an application and supporting material to claim refund. Only locally made purchases are eligible for refund. Eligible purchases are: Office equipment, office furnishings, and building materials. Term and amount of refund are: Year one, 100 per cent of locally purchased eli- gible materials. Year two, 50 per cent of locally purchased eligible materials; year three, 50 per cent of locally purchased eligible materials. 3. Sales tax refund on employment of zone residents. Criteria are: Business must be located in a designated enterprise zone. Twenty-five per cent or more of the businesses' work- force must be composed of zone residents. Business must prove residency and full-time status of employees on application for refund. Eligibility: Any type of business entering or located within a designated enterprise zone which constructs or renovates facilities and hires new employees. -2- Term and amount of refund are: Two -hundred fifty ($250) dollars per full-time employee who is a zone resident. Maximum of $2,500 to any one business. Available to busi- nesses when they reach required employment of zone residents. 4. Refund of building permit fees to businesses in an enterprise zone. Criteria are: Business must be located in a designated enterprise zone. Business must have employed at least ten zone residents for one year. Application for refund must be made within three years of issuance of building permit. Eligibility: Any type of business. Term and amount of refund are: Full refund of building permit fee paid to City when constructing, remodeling or expanding facilities in a designated enterprise zone. Must be applied for within three years of issuance of permit. SUMMARY/RECOMMENDATION: This proposed set of criteria and guidelines is the result of the Enter- prise Zone committee's work on zone incentives. The committee worked on the project for approximately one year, and accomplished the designation of two zones located in the City of Lubbock as well as the incentive proposals. The criteria and guidelines for zones' specific incentives were dis- cussed in two public hearings, and adjusted as necessary. The com- mittee now requests that Council review these incentives for formal adoption. The City staff recommends adoption of the Enterprise Zone Incentive guidelines. -3- GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT FOR COMMERCIAL PROJECTS IN DESIGNATED ENTERPRISE ZONES IN THE CITY OF LUBBOCK SECTION I. General Puraose: The City of Lubbock is committed to the promotion of high quality commercial development in designated Enterprise Zones within the City; and to an ongoing improvement in the quality of life for citizens resid- ing in designated Enterprise Zones. The Affected Jurisdictions recog- nize that these objectives are generally served by enhancement and expansion of the local economy. The Affected Jurisdictions will, on a case -by -case basis, give consideration to providing tax abatement, as authorized by V.T.C.A., Tax Code, Chapter 312, as stimulation for eco- nomic development within the designated Enterprise Zones in the City of Lubbock. It is the policy of the Affected Jurisdictions that said con- sideration will be provided in accordance with the guidelines and crite- ria herein set forth and in conformity with the Tax Code. Nothing contained herein shall imply, suggest or be understood to mean that the Affected Jurisdictions are under any obligation to provide tax abatement to any specific applicant (V.T.C.A. Tax Code, Section 312.002(d)). With the above rights reserved, all applicants for tax abatement will be considered on a case -by -case basis. SECTION II. Definitions: As used within these guidelines and criteria, the following words or phrases shall have the following meaning I. Abatement of Taxes: To exempt from ad valorem taxation all or part of the value of certain Improvements placed on land located in a designated Enterprise Zone for commercial development purposes for a period of time not to exceed five (5) years. 2. Affected Jurisdiction: The City of Lubbock, the County of Lubbock, and the Lubbock Independent School District. 3. Abatement Agreement: (1) A contract between a property owner and the Affected Jurisdictions for the abatement of taxes on qualified property located within a designated Enterprise Zone as authorized by V.T.C.A., Tax Code, Section 312.204(e). 4. Base Year Value: The assessed value of property eligible for tax abatement as of January 1 preceding the execution of an Abatement Agreement as herein defined. "Final Version --October 1993" Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 2 5. Renovation of Existing Facilities or Structures: The addi- tion of buildings, structures, machinery or equipment to a Facility after the date of execution of an Abatement Agree- ment. 6. Existing Facility or Structure: A Facility as of the date of execution of the Tax Abatement Agreement, located in or on Real Property eligible for tax abatement. 7. Facility: The improvements made to Real Property eligible for tax abatement and including the building or structure erected on such Real Property and/or any Tangible Personal Property to be located in or on such property. 8. Improvements to Real Property or Improvements: Shall mean the construction, addition to, structural upgrading of, replacement of, or completion of any facility located upon, or to be located upon, Real Property, as herein defined, or any Tangible Personal Property placed in or on said Real Property. 9. New Facility: The construction of a Facility on ;previously undeveloped real property eligible for tax abatement. 10. Owner: The record title owner of Real Property or the legal owner of Tangible Personal Property. In the case of land leased from an Affected Jurisdiction, the lessee shall be deemed the owner of such leased property together with all improvements and Tangible Personal Property located thereon. 11. Productive Life: The number of years a Facility is expected to be' in service. 12. Real Property: Land on which Improvements are to be made or fixtures placed. 13. Tangible Personal Property: Any Personal Property, not oth- erwise defined herein, and which is necessary for the proper operation of any type of Facility. SECTION III. Intent of Criteria and Guidelines: The intent of the criteria and guidelines, as herein set forth, is to establish the minimum standards which an applicant for tax abatement must meet in order to be considered for such status by the Affected Jurisdictions. Guidelines and Criteria Governing Tax.Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 3 SECTION IV. Criteria and Guidelines for Tax Abatement: 1. Any type of Facility will be eligible for tax abatement con- sideration provided such Facility meets the following guide- lines and criteria: 2. Creation of new value: Abatement may only be granted for the additional value resulting from any of the following: (a) modernization of a facility of any type as herein defined; (b) construction of a new facility of any type as herein defined; (c) expansion of a facility of any type as herein defined. 3. New or existing facilities, of any type herein defined, located in a reinvestment zone or upon Real Property eligi- ble for such status will be eligible for consideration for tax abatement status provided all other criteria or guide- lines are satisfied. 4. Improvements to Real Property are eligible for tax abatement status. 5. The following types of property shall be ineligible for tax abatement status and shall be fully taxed: (a) Real Property; (b) inventories or supplies; (c) tools; (d) furnishings and other forms of movable personal prop- erty; (e) vehicles; (f) aircraft; (g) housing; (h) boats; (i) hotel accommodations; Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 4 (j) motel accommodations; (k) property owned by the State of Texas or any state agency; and, (1) property owned or leased by a member of the affected Jurisdiction. 6. In order for a Facility to qualify for abatement, the fol- lowing conditions must apply: (a) The Real Property and eligible improvements and Tangi- ble Personal Property must be owned by the same per- son, corporation, partnership or other business entity; or, (b) In the case of Real Property leased from Affected Jurisdiction all improvements placed thereon together with all Tangible'Personal Property used in conjunc- tion with said improvements must be owned by the same person, corporation, partnership or other business entity, and said owner must have a lease commitment of at least 15 years. (c) Property must be properly zoned for the'use stated by the owner in the application. 7. The amount and term of abatement shall be determined on a case -by -case basis, however, in no event shall taxes be abated for a term in excess of five (5) years. The amount of the taxable value of Improvements to be abated and the term of the abatement shall be determined by the municipal- ity in all cases. The authority of all other taxing units shall be as set forth in V.T.C.A., Tax Code, Section 312.206. 8. No commercial property shall be eligible for tax abatement under these guidelines and criteria unless such property is located in a designated Enterprise Zone in accordance with V.T.C.A., Tax Code, Section 312.202. 9. The economic qualification for tax abatement shall be as follows: (a) The creation of at least five new jobs. (b) New Facility: Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 7 (a) Establish and set forth the Base Year assessed value of the property for which tax abatement is sought. (b) Provide that the taxes paid on the Base Year assessed value shall not be abated as a result of the execution of said Tax Abatement Agreement. (c) Provide that ineligible property as subscribed in Sec- tion IV, Subsection 5, hereinabove shall be fully taxed. (d) Provide for the exemption of Improvements in each year covered by the agreement, only to the extent the value of such Improvements for each such year exceeds the value for the year in which the agreement is executed. (e) Fully describe and list the kind, number and location of all of the improvements to be made in or on the Real Property. (f) Set forth the estimated value of all improvements to be made in or on the Real Property. (g) Clearly provide that tax abatement shall be granted only to the extent: (1) The improvements to Real Property increase the value of the Real Property for the year in which the Tax Abatement Agreement is executed; and, (2) That the Tangible Personal Property improvements to Real Property were not located on the Real Property prior to the execution of the Tax Abatement Agreement. (h) Provide for the portion of the value of the improve- ments to Real Property or improvements to be abated. This determination is to be made consistent with the provisions of Section IV, Subsection 5, of these guidelines and criteria as hereinabove set forth. (i) Provide for the commencement date and the termination date. In no event shall said dates exceed a period five (5) years. (j) Describe the type and proposed use of the improvements to Real Property or improvements including: Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 8 (1) The type of facility. (2) Whether the improvements are for a new facility or renovation of a facility. (3) The nature of the construction, proposed time table of completion, a map or drawings of the improvements above mentioned. (4) The amount of investment and the commitment for the creation of new jobs. (5) A list containing the kind, number and location of all proposed improvements. (6) Any other information required by the Affected Jurisdiction. (k) Provide a legal description of the Real Property upon which improvements are to be made. (1) Provide access to and authorize inspection of the Real Property or improvements by employees of the Affected Jurisdiction; who have executed a Tax Abatement Agree- ment with owner to insure improvements are made according to the specifications and conditions of the Tax Abatement Agreement. (m) Provide for the limitation of the uses of the Real Property or improvements consistent with the general purpose of encouraging development or re -development of the zone during the period covered by the Tax Abatement Agreement. (n) Provide for contractual obligations in the event of default by owner, violation of the terms or conditions by owner, recapturing property tax revenue in the event the owner defaults or otherwise fails to make improvements as provided in said Tax Abatement Agree- ment, and any other provision as may be required or authorized by State law. 2. Not later than the seventh day before the City of Lubbock (as required by V.T.C.A., Tax Code, Section 312.204 or Sec- tion 312.402) enters into an agreement for tax abatement under V.T.C.A., Tax Code, Section 312.204, the governing body or a designated officer or employee thereof shall deliver to the presiding officer of the governing body of Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 5 (1) The creation of a new Facility, which has not previously existed within the Affected Jurisdic- tion, and,will be a totally new business opera- tion. (c) Renovation of Existing Facility: (1) The structural addition to a Facility. (d) Notwithstanding any of the requirements set forth in Section 9, the governing body of an Affected Jurisdic- tion upon the affirmative vote of three -fourths of its members may vary any of the above requirements when variation is demonstrated by the applicant for Tax Abatement that variation is in the best interest of the Affected Jurisdiction to do so, and will enhance the economic development of the Affected Jurisdiction. By way of example only, and not by limitation, the governing body of an Affected Jurisdiction may con- sider the following or similar terms in determining whether a variance shall be granted: (1) That the increase in productivity of the Facil- ity will be substantial, and hence directly ben- efit the economy. (2) That the increase of goods or services produced by the Facility will be substantial, and directly benefit the economy. (3) That the employment maintained at the Facility will be increased. (4) That the waiver of the requirement will con- tribute, and provide for the retention of exist- ing jobs within the Affected Jurisdiction. (5) That the applicant for tax abatement has demon- strated that if tax abatement is granted to his Facility, even though his Facility will not employ additional personnel that, nevertheless, due to the existence of said Facility, new jobs will be created as a direct result of his Facil- ity in other facilities located within the Affected Jurisdiction. (6) Any other evidence tending to show a direct eco- nomic benefit to the Affected Jurisdiction. Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 6 10. Taxability: (a) The portion of the value of.Improvements to be abated shall be abated in accordance with the terms and pro- visions of a Tax Abatement Agreement executed between the Affected Jurisdiction and the owner of the Real Property and/or Tangible Personal Property, (which agreement shall be) in accord with -the provisions of V.T.C.A., Tax Code, Section 312.205. (b) All ineligible property, if otherwise taxable as herein described, shall be fully taxed. 11. The governing body of each Affected Jurisdiction shall have total discretion as to whether tax abatement is to be granted. Such discretion, as herein retained, shall be exercised on a case -by -case basis. The adoption of these guidelines and criteria by the governing body of an Affected Jurisdiction does not: (a) Limit the discretion of the governing body to decide whether to enter into a specific tax abatement agree- ment; (b) Limit the discretion of the governing body to delegate to its employees the authority to determine whether or not the governing body should consider a particular application or request for tax abatement; or, (c) Create any property, contract, or other legal right in any person to have the governing body consider or grant a specific application or request for tax abate- ment. 12. The burden to demonstrate that an application for tax abate- ment should be granted shall be upon the applicant. Each Affected Jurisdiction to which the application has been directed shall have full authority to request any additional information`from'the applicant that the governing body of such Affected Jurisdiction deems necessary to assist it in considering such application. SECTION V. Tax Abatement Agreement: 1. The Tax Abatement Agreement may be executed between the owner and the municipality. A Tax Abatement Agreement shall: Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 9 each of the taxing units in which the property to be subject to the agreement is located, a written notice that the City intends to enter into the agreement. The notice must include a copy of the proposed Tax Abatement Agreement. 3. A notice, as above described in Subparagraph 2, is presumed delivered when placed in the mail, postage paid and properly addressed to the appropriate presiding officer. A notice properly addressed and sent by registered or certified mail for which a return receipt is received by the sender is con- sidered to have been delivered to the addressee. 4. Failure to deliver the notice does not affect the validity of the agreement. SECTION VI. ARRlication: 1. Any present owner of taxable commercial property located within the designated Enterprise Zone of the City of Lubbock may apply for tax abatement by filing an application with the City of Lubbock. 2. The application shall consist of a completed application form accompanied by: (a) A general description of the improvements to be under- taken. (b) A descriptive list of the improvements for which tax abatement is requested. (c) A list of the kind, number and location of all pro- posed improvements of the Real Property Facility of Existing Facility. (d) A map indicating the approximate location of improve- ments on the Real Property Facility or Existing Facil- ity together with the location of any or all Existing Facilities located on the Real Property or Facility. (e) A list of any and all Tangible Personal Property presently existing on the Real Property or located in an existing facility. (f) A legal description of property. (g) Address of property. Guidelines and Criteria Governing Tax Abatementfor Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 10 (h) A proposed time schedule for undertaking and complet- ing the proposed improvements. (i) A general description stating whether the proposed improvements are in connection with: (1) the renovation of a facility; or, (2) construction of a new facility. (j) A statement of the additionalvalue to the Real Prop- erty or Facility as a result of the proposed improve- ments. (k) A statement of the assessed value of the Real Prop- erty, Facility or Existing Facility for the Base Year. (1) Information concerning the number.of new jobs that will be created or information concerning the number of existing jobs'to be retained as result of the improvements undertaken. (m)` Any other information,which. he City of Lubbock deems appropriate for evaluating the financial capacity of the applicant and compatibility of the proposed improvements with these guidelines and criteria. (n) Information that is provided to an Affected Jurisdic- tion in connection with an application or request for tax abatement, and which describes the specific pro- cesses or business activity to be conducted or the equipment or other property to be located on the prop- erty for which tax abatement is sought is confidential and not subject to public disclosure until the Tax Abatement Agreement is executed. Information in the custody of an Affected Jurisdiction after the agree- ment is,executed is not'confidential. (V.T.C.A., Tax Code, Section 312.003). (o)., The City of Lubbock shall determine if the property described in said application is, within a designated '`Enterprise Zone. If the City determines that the property described is not within a current Enterprise Zone, then they shall so notify the applicant and said application shall then be returned to,the applicant. Guidelines and Criteria Governing Commercial Projects in Designated October 15, 1993 PAGE 11 SECTION VII. Recapture: Tax -Abatement for Enterprise Zones 1. In the event that any type of facility, (as defined in Sec- tion I, Subparagraphs 5, 6, 7, 8, 10, 11,.12, 13, 17, 18) is completed and begins producing goods or services, but subse- quently discontinues producing goods or services for any reason, excepting fire, explosion or other casualty or acci- dent or natural disaster or other event beyond the reason- able control of applicant or owner for a period of 180 days during the term of a tax abatement agreement, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. The burden shall be upon the applicant or owner to prove to the satisfaction of the Affected Juris- diction to whom the application for tax abatement was directed that the discontinuance of producing goods or ser- vices was as a result of fire, explosion, or other casualty or accident or natural disaster or other even beyond the control of applicant or owner. In the event the applicant or owner meets this burden, and the Affected Jurisdiction is satisfied that the discontinuance of the production of goods or services was the result of events beyond the control of the applicant or owner, then such applicant or owner shall have a period of one year in which to resume the production of goods and services. In the event that the applicant or owner fails to resume the production of goods or services within one year, then the Tax Abatement Agreement shall ter- minate and the Abatement of all taxes shall likewise termi- nate. Taxes abated during the calendar year in which termi- nation takes place shall be payable to each Affected Juris- diction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. The one year time period, hereinabove mentioned, shall commence upon written notifica- tion from the Affected Jurisdiction to the applicant or owner. 2. In the event that the applicant or owner has entered into a tax abatement agreement to make improvements to a facility of any type described in Section 1 above, but fails to undertake or complete such improvements, then in such event the Affected Jurisdiction to whom the application for tax Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones' October 15, 1993 PAGE 12 abatement was directed shall give the applicant or owner sixty (60) days notice of such failure. The applicant or owner shall,demonstrate to the satisfaction of the Affected Jurisdiction, above mentioned, that the applicant or owner has commenced to cure such failure within the sixty (60) days above mentioned. In the event that the applicant or owner fails to demonstrate that he is taking affirmative action to cure his failure, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination takes place shall be payable to each Affected Jurisdiction by no later than Jan- uary 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 3. In the event that the Affected Jurisdiction to whom applica- tion for tax abatement was directed determines that the applicant or owner is in default of any of the terms or con- ditions contained in the Tax Abatement Agreement, then in such event the Affected Jurisdiction shall give the appli- cant or owner sixty (60) days written notice to cure such default. In the event such default is not cured to the sat- isfaction of the Affected Jurisdiction within the sixty (60) days notice period, then the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise termi- nate. Taxes 'abated during the calendar year in which termi- nation takes place shall be payable to each Affected Juris- diction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 4. In the event that the applicant or owner allows ad valorem taxes on property ineligible for tax abatement owed to any Affected Jurisdiction, to become delinquent and fails to timely and properly follow the legal procedures for their protest or contest, then in such event the Tax Abatement Agreement shall terminate and all abatement of taxes shall likewise terminate. Taxes abated during the calendar year in which termination, under this subparagraph, takes place shall,be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termination shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. i Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 13 5.. In the event that the applicant or owner, who has executed a tax abatement agreement with any Affected Jurisdiction, relocates the business, for which tax abatement has been granted, to a location outside of the designated reinvest- ment zone, then in such event, the Tax Abatement Agreement shall terminate after sixty (60) days written notice by the Affected Jurisdiction to the Owner/Applicant. Taxes abated during the calendar year in which termination, under this subparagraph takes place shall be payable to each Affected Jurisdiction by no later than January 31st of the following year. Taxes abated in years prior to the year of termina- tion shall be payable to each Affected Jurisdiction within sixty (60) days of the date of termination. 6. The date of termination as that term is used in this Subsec- tion VIII shall, in every instance, be the 60th day after the day the Affected Jurisdiction sends notice of default, in the mail to the address shown in the Tax Abatement Agree- ment to the Applicant or Owner. Should the default be cured by the Owner or Applicant within the sixty (60) day notice period, the Owner/Applicant shall be responsible for so advising the Affected Jurisdiction and obtaining a release from the notice of default from the Affected Jurisdiction, failing in which, the abatement remains terminated and the abated taxes must be paid. 7. In,every case of termination set forth in Subparagraphs 1, 2, 3, 4 and 5 above, the Affected Jurisdiction to which the application for tax abatement was directed shall determine whether default has occurred by Owner (Applicant) in the terms and conditions of the Tax Abatement Agreement and shall so notify all other Affected Jurisdictions. Termina- tion of the Tax Abatement Agreement by the Affected Juris- diction to which the application for tax abatement was directed shall constitute simultaneous termination of all Tax Abatement Agreements of all other Affected Jurisdic- tions. 8. In the event that a tax abatement agreement is terminated for any reason whatsoever, and taxes are not paid within the time period herein specified, then in such event, the provi- sions of V.T.C.A., Tax Code, Section 33.01 will apply. SECTION IX. Miscellaneous: 1. Any notice required to be given by these criteria or guide- lines shall be given in the following manner: Guidelines and Criteria Governing Tax Abatement for Commercial Projects in'`Designated Enterprise Zones October 15, 1993 PAGE 14 (a) To the Owner or Applicant: written notice shall be sent to the address appearing on the Tax Abatement Agreement. (b) To an Affected Jurisdiction: written notice shall be sent to the address appearing on the Tax Abatement Agreement. 2. The Chief Appraiser of the Lubbock Central Appraisal Dis- trict shall annually assess the Real and Personal Property comprising the reinvestment zone. Each year, the Applicant or Owner receiving tax abatement shall furnish the Chief Appraiser with such information as may be necessary for the abatement. Once value has been established, the Chief Appraiser` shall notify the Affected Jurisdictions which levy taxes of the amount of assessment. 3.' Upon the `completion `of improvements made to Facility as set forth in Section VIII, Subparagraph 1 of these criteria and guidelines, a designated employee or employees of any Affected Jurisdiction having executed a tax abatement agree- ment with Applicant or Owner shall have access to the Facil- ity to ensure compliance with the Tax Abatement Agreement. 4. A Tax Abatement Agreement may be assigned to,a new owner, but only after written consent has been obtained from all Affected Jurisdictions which have executed such an agreement with the Applicant or Owner. 5. These guidelines and criteria are effective upon the date of their adoption by an Affected Jurisdiction and shall remain in force for two years. At the end of the two-year period, these guidelines and criteria may be re -adopted, modified, amended or re -written as the conditions may warrant. 6. Each Affected Jurisdiction shall determine whether or not said Affected Jurisdiction elects to become eligible to par- ticipate in tax abatement. In the event the Affected Juris- diction elects by resolution to become eligible to partici- pate in tax abatement, then such Affected Jurisdiction shall adopt these guidelines and criteria`by separate resolution forwarding a copy of both resolutions to all other Affected Jurisdictions. 7. In the event of a conflict between these guidelines and cri- teria and V:T.C.A., Tax Code, Chapter 312, then in such event, the Tax Code shall prevail, and these guidelines and criteria interpreted accordingly. Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones October 15, 1993 PAGE 15 8. The guidelines and criteria, once adopted by an Affected Jurisdiction, may be amended or repealed by a vote of three - fourths of the members of the governing body of an Affected Jurisdiction during the two-year term in which these guide- lines and criteria are effective. 9. The Property Re -development and Tax Abatement Act is subject to review as provided by the Texas Sunset Act (Section 325.0082 Government Code). If not continued in effect, this statute expires September 1, 1995. 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 employment of residents of a designated zone who work at least 1,040 hours per year on a full-time basis. The maximum amount of the refund will be $250 per qualified employee and a maximum of $2,500 per quali- fied business. A portion of this refund M be paid by Lubbock County. f ailml A. Qualified Employee - one who is a resident of a designated enter- prise zone and who works a minimum of 1,040 hours per year for a business located with a designated enterprise zone. B. Qualified Business - one that employs twenty-five (25) percent of its total workforce from residents of a designated enterprise zone. C. 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 pur- chases of selected items designated in the State lawn. Eligibility: A. Any firm locating in a designated enterprise zone that meets the requirements for designation as a qualified business as specified in State Enterprise Zone Regulations. B. The business must file an application for refund based on employ- ment with the Zone Administrator which includes: 1. Name and address of the business, 2. Name and contact address of the owner/manager making appli- cation, 3. Telephone and fax numbers of the business, 4. Date the operation was started in a designated enterprise zone, 5. Total number of employees, 6. Employment broken down by zip code, "Final Version --October 19930 1 Qualified Job Creation - Sales Tax Refund in Designated Enterprise Zones October 15, 1993 PAGE 2 7. Time sheets showing hours worked by each employee during the previous year, and 8. Documentation of local vendors used during the previous year. C. The business must show that 25 percent of its employees are resi- dents of a designated enterprise zone, and that each resident - employee worked a minimum of 1,040 hours during the previous year. D. The business property must be properly zoned. Process: A. The business owner/manager files the proper application and docu- mentation with the Enterprise Zone Administrator. B. The Zone Administrator verifies documentation through audit and spot checks. C. Once the information is verified, the Zone Administrator forwards a certification of the business' eligibility and the number of qualified jobs on which refund is to be made to the Assistant City Manager for Financial Services. D. The Assistant City Manager for Financial Services verifies the designation and jobs, and then draws a check for the amount to be refunded and forwards it to the business. N REFUND OF BUILDING PERMIT FEES FOR BUSINESSES LOCATED IN DESIGNATED ENTERPRISE ZONES The City of Lubbock will refund building permit fees paid by businesses that locate within a designated enterprise zone, and create and retain at least ten (10) jobs for a period of one year which can be defined as being filled by "Qualified Employees.' 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 requirement, and submittal of an application and necessary documen- tation 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. Qualified Employee - one that is a resident of a designated enter- prise zone, and works at least 1,040 hours per year for a specific business located in a designated enterprise zone. Eligibility: A. A business must be physically located within the boundaries of a designated enterprise zone. B. Building Permit Fees to be refunded must have been paid for con- struction or renovation of facilities within a designated enter- prise zone. C. The business must hire and retain at least ten (10) "qualified employees" for at least one year within a three-year period of the start of business operations in a designated enterprise zone. D. The business must file an application for the refund of fees which includes the following: 1. Name and address of the business, 2. The owner's name and contact address, 3. Telephone and fax numbers, 4. The date of the start of operations in a designated enter- prise zone, and "Final Version --October 1993" i Refund of Building Permit Fees for Businesses Located in Designated Enterprise Zones October 15, 1993 PAGE 2 5. Employment information, including: a. Total employment, b. Number of employees who are zone residents, C. Documentation on residents, d. Employee time sheets. 6. The date of building permit from the City of Lubbock. E. The business property must be properly zoned. Process: A. The business applies to Zone Administrator providing required information and documentation. B. The Zone Administrator verifies statements made in the applica- tion, and certifies the amount of the refund due. C. The Zone Administrator forwards certification to the Assistant City Manager for Financial Services. D. The Assistant City Manager for Financial Services causes check to be drawn, and forwards refund to the business.. SALES TAX REFUND ON LOCAL PURCHASES FOR ENTERPRISE ZONE EMPLOYERS Sales Tax Refunds on purchases of eligible items from local (Lubbock County) suppliers will be provided by the City of Lubbock, and may be applied for in Lubbock County. Refunds will be made by the City of Lub- bock at the beginning of the next fiscal quarter after the completion of the company's first (1st), second (2nd), and third (3rd) years in opera- tion in a designated enterprise zone. A refund of one hundred (100) percent of local sales taxes paid on eli- gible purchases will be made by the City after the first year of opera- tion. A refund of fifty (50) percent of local sales taxes paid on eli- gible 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. Criteria• A. The business applying for refund must be located in a designated enterprise zone in the City of Lubbock. B. The business must be qualified under a definition promulgated in the State of Texas Enterprise Zone Regulations which states that a qualified business is one which has twenty-five (25) percent of its workforce composed of residents of a designated enterprise zone. 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. Business name and address, 2. The owner's name and contact address, 3. Telephone and fax numbers, 4. The date of the start of operation in a designated enter- prise zone, and "Final Version --October 1993" Sales Tax Refund on local Purchases for Enterprise Zone Employers October 15, 1993 PAGE 2 5. Employment information, including: a. Total employment, b. Number of employees that are zone residents, c. Documentation such as names and zip codes, and d. Employee time sheets. 6. list of vendors from whom eligible purchases were made. 1. Documentation of amount of local sales tax paid, such as paid invoices or other proof of payment from vendors. Eligible Purchases: A. Supplies purchased from local vendors and used in office opera- tion, 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. A business makes application to Zone Administrator and provides documentation of employment and purchases from vendors. B. The Zone Administrator reviews the application and conducts any audit or investigation necessary to verify the information pro- vided. C. The Zone Administrator certifies the amount of refund due to the business to the Assistant City Manager of Financial Services. D. The Assistant City Manager of Financial Services verifies the information and causes a check to be drawn at the beginning of the fiscal quarter after the verification, which will be mailed to the business.