2006-03-27 Regular Meeting and Workshop Meeting

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These agreements can require that the applicant meet certain requirements such as employment, building or infrastructure improvements etc. If agreement is not met, there can be re-capture provisions Limitations Sales Tax Abatements . The amount generated by sales tax abatement is difficult to predict since the City does not have access to this information on either a site specific or defined area. This type of abatement would be more appealing for high volume businesses that would generate significant sales tax. Property Tax Abatements . Since the municipal tax abatement provisions are tied to Chapter 312 of the tax code, the abatement only pertains to the incremental value over the existing or base value at the time of agreement. . The abatement agreement is also subject to the rights of holders of the municipality's outstanding bonds. Chapter 380 Chapter 380 of the Local Government Code To promote state and local economic development and to stimulate business and commercial activity in the municipality, a city may . Provide loans and/or grants of city funds . Offer discounted or free city staff, city facilities, or city services . Use city staff to administer the program or; . Contract with federal, state, other political subdivision, a non-profit organization, or any other entity for administration To utilize Chapter 380 the City must . Ensure that the public purpose of economic development is served by the incentive . City should enter into an agreement with the recipient that outlines the steps and lor targets must be met to justify the public funding such as; . Creation of jobs . Expansion of tax base by construction or enhancement of facilities . Etc. . The agreement should include a tangible means for determining if the recipient met its obligations . The agreement should include recapture provisions in case the recipient does not meet its obligations