HomeMy WebLinkAboutO-2010-3245 adopting new Guidelines and Criteria Governing Tax Abatement AgreementsREQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: April 26, 2010
Requested By: Stacey Osborne
Department: CMO
Report: _ Resolution: _ Ordinance: x
Exhibits: Tax Abatement Guidelines & Criteria -2010B
Exhibits:
Exhibits:
Appropriation
Source of Funds: SOURCE
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: YES NO
SUMMARY & RECOMMENDATION
We have given three presentations and had three discussions regarding tax abatements. These were workshop items
in the City Council meetings on February 8 and February 22 and at the Council Retreat on April 10.
The tax abatement proposal that we last discussed targets three specific categories of business: (1) Rail -served
Regional and Service Distribution Facilities; (2) Manufacturing Facilities and Other Basic Industry; and (3) Retail,
Commercial Office, and Regional Entertainment Facilities. Each of those facilities is defined in the Tax Abatement
Guidelines and Criteria -2010, which is based on the Tax Abatement Guidelines and Criteria that were previously in
place for the City of La Porte. An amended Guidelines and Criteria, with strike -through, is presented for your
reference.
We propose to offer incentives at rates that will heavily favor businesses in the retail, office, and regional
entertainment industries. To qualify for tax abatements, businesses in all three categories must provide a minimum
capital investment of $3 million (amended from $5 million in our earlier proposal) and be located within the limits
of the City of La Porte. The abatements for all three categories would be applied to property taxes, and would be
averaged over five years. They would also require a job commitment of at least 10 jobs. The rebates for the different
categories would be as follows:
Warehouse/transportation: 10% for rail -served facilities only. (NOTE: Per our discussion at the February 22
workshop we took out the Warehouse /transportation category, but we added rail -served facilities back into
consideration after the Council Retreat on April 10.)
Manufacturing: 10%
Retail/Office: 10% - 50%, depending upon the square footage of the building space. (NOTE: Per the discussion at
our February 22 discussion we added an additional category for retail with 0 — 50k square footage.)
The next steps for offering tax abatements begin with the City adopting a resolution and adopting tax abatement
guidelines and criteria. Then, once a property has requested a tax abatement, the City will hold a public hearing and
designate an area as a "reinvestment zone" (which is not the same thing as a TIRZ). Written notice of the intent to
enter into a tax abatement agreement will be submitted to all other taxing entities (e.g. the County), and the City
approves the agreement by a majority vote. Other taxing entities will have the option to enter into a separate
agreement with the property owner after the City has approved the tax abatement agreement.
We feel that this tax abatement package would serve as a valuable tool for attracting the types of businesses we need
in La Porte, and serve as an important part of our economic development strategy.
Action Required by Council:
Consider approval of an ordinance amending the Code of Ordinances of the City Of La Porte by adding Article V
G}r Iines and Criteria Governing Tax Abatement Agreements by the City Of La Porte.
� J�11 4 (tL I.
Ron Bottoms, City Manager
date
ORDINANCE NO. 3245
AN ORDINANCE AMENDING THE CODE OF ORDINANCES OF THE CITY OF LA
PORTE BY REPEALING ARTICLE V "GUIDELINES AND CRITERIA GOVERNING
TAX ABATEMENT AGREEMENTS BY THE CITY OF LA PORTE", SECTIONS 66-140
THROUGH 66-151 INCLUSIVE, AND REPLACING WITH NEW ARTICLE V
"GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS BY
THE CITY OF LA PORTE", SECTIONS 66-140 THROUGH 66-151 INCLUSIVE, FOR
THE PURPOSE OF ADOPTING NEW REGULATIONS FOR TAX ABATEMENT
AGREEMENTS WITH THE CITY OF LA PORTE; CONTAINING A REPEALING
CLAUSE; CONTAINING A SEVERABILITY CLAUSE; FINDING COMPLIANCE WITH
THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. The City Council of the City of La Porte hereby amends the Code of
Ordinances of the City of La Porte by repealing Article V. "Guidelines and Criteria Governing
Tax Abatement Agreements by the City of La Porte", Sections 66-140 through 66-151 and
replacing with new Article V. "Guidelines and Criteria Governing Tax Abatement Agreements by
the City of La Porte", Sections 66-140 through 66-151 inclusive, as follows, to -wit:
"ARTICLE V. GUIDELINES AND CRITERIA
GOVERNING TAX ABATEMENT AGREEMENTS
Section 66-140. REDEVELOPMENT TAX ABATEMENT AUTHORIZED.
(1) Creation of Reinvestment Zones.
(a) A property tax abatement program is hereby created to be administered in accordance with
V.T.C.A., Tax Code Ch. 312, as amended from time to time. Tax abatement shall only be allowed
in a reinvestment zone.
(b) Reinvestment zones in the city for this purpose will be considered for designation by city
council upon the recommendation of the City Manager's Office. The city council may approve the
creation of these reinvestment zones on a zone -by -zone basis after a public hearing before the city
council. Following the public hearing the city council may consider the ordinance creating a new
reinvestment zone in the proposed area.
(c) The city council may not adopt an ordinance designating a reinvestment zone until it has held
a public hearing at which interested persons are entitled to speak and present evidence for or against
the designation. Notice of the hearing shall be given at least seven days prior to the hearing. The
presiding officers of eligible jurisdictions shall be notified in writing at least seven days prior to the
hearing.
A notice of the public hearing shall be given to other affected taxing jurisdictions, published
in the legal classified section of the local daily newspaper having general circulation, and posted in
other places as deemed appropriate, including notice to civic associations in the area surrounding
the proposed zone, at least seven days prior to the hearing. The notice shall contain the location,
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time, and place of the public hearing and a description of the proposed boundaries of the
reinvestment zone.
(d) The designation of such a zone by ordinance shall constitute an affirmative finding by the city
council that the improvements sought to be constructed or repairs to be made within the zone are
feasible and practical and would be of benefit to the land to be included within a zone and to the
city.
(e) In determining whether an area qualifies as a reinvestment zone for the property tax
abatement program, the city council shall use any one or more of the following criteria as
guidelines:
(1) The area substantially impairs or arrests the sound growth of the city; retards the
provision of housing accommodations, or constitutes an economic or social liability and is a
menace to the public health, safety, morals, or welfare in its present condition and use by
reasons of the presence of substantial number of substandard, slum, deteriorated, or
deteriorating structures, predominance of defective or inadequate sidewalks or street layout;
faulty lot layout in relation to size, accessibility, or usefulness, unsanitary or unsafe
conditions; deterioration of site or other improvements; tax or special assessment
delinquency exceeds the fair value of the land; defective or unusual conditions of title; the
existence of conditions that endanger life or property by fire or other cause; or any
combination of these factors or conditions.
(2) The area is predominantly open and, because of obsolete platting or deterioration of
structures or site improvements or other factors, substantially impairs or arrests the sound
growth of the city.
(3) The area has been designated a local or state -federal enterprise zone under the Texas
Enterprise Zone Act.
(4) The area is located wholly within an eligible blighted area, as identified from time to
time by city council.
(5) There has been a demonstration of community interest and there is evidence that
substantial number of owners of taxable real property in the reinvestment zone will
participate in such a program.
(6) Be reasonably likely as a result of the designation to contribute to the retention or
expansion of primary employment or to attract major investment in the zone that would be a
benefit to the property and that would contribute to the economic development of the city.
(f) The goals and objectives expressed above and the standards and restrictions expressed in
V.T.C.A., Tax Code Ch. 312, as amended, are not exhaustive and shall be supplemented by such
further and additional goals, objectives, rules, standards and restrictions as the city council may
from time to time impose.
(g) The designation of a reinvestment zone hereunder shall expire five years after the date of its
designation and may be renewed for periods not to exceed five years. The expiration of a
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designation, however, shall not affect existing agreements entered into pursuant to section 66-140 or
section 66-145 of this chapter.
(2) Agreement for redevelopment property tax abatement.
(a) Upon designation of a reinvestment zone, the city may enter into property tax abatement
agreements with interested owners of taxable real property located within the reinvestment zone.
The agreement shall be conditioned on the owner of the property making certain improvement or
repairs to the property as outlined in Section 66-143, "Application", of this Article.
(b) In addition to the guidelines and criteria contained herein, to be eligible for tax abatement the
planned improvement:
(1) Should provide an economic benefit to the city, taking all relevant factors into
consideration, including (i) size of the abatement, (ii) income from sales tax and
franchise fees generated by the planned improvement, and (iii) any additional
expense to the city services as a result of the improvement; and
(2) Must be necessary because capacity cannot be provided efficiently utilizing
existing improved property when reasonable allowance is made for necessary
improvements; and
(c) Property in a reinvestment zone that is owned or leased by a member of the city council or by
a member of the city planning commission is excluded from property tax abatement.
(d) The city may enter into a property tax abatement agreement with the interested owners of
taxable real property for improvements or repairs completed before the city's approval of the tax
abatement agreement if.
(1) The applicant has complied with the requirements of section 66-143 of this
Article; and
(2) The applicant provides evidence of good cause as to why the city should grant
tax abatements for improvements or repairs completed before the city's approval of
the tax abatement agreement; and
(3) The agreement is consistent with the requirements of subsections (a) through
(c) above, except as provided in paragraph (2) of this subsection.
Notwithstanding any other provision of this section, for tax abatement agreements approved
under this subsection (d), city council shall determine the year that property tax abatement shall
begin.
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Section 66-141. DEFINITIONS
(a) "Abatement" means the full or partial exemption from ad valorem taxes of certain real property
(including fixed -in-place machinery & equipment) in a reinvestment zone designated for
economic development purposes.
(b) "Eligible Jurisdiction" means the city and any school district, college district or other taxing
district eligible to abate its taxes according to Texas law that levies ad valorem taxes upon and
provides services to property located within the proposed or existing reinvestment zone.
(c) "Agreement" means a contractual agreement between a property owner and/or lessee and an
eligible jurisdiction for the purposes of tax abatement.
(d) "Base Year Value" means the assessed value of eligible property on January 1 preceding the
execution of the agreement plus the agreed upon value of eligible property improvements made
after January 1, but before the execution of the agreement, or the sales price, if the property was
conveyed subsequent to January 1, whichever is greater.
(e) "Commercial Office Facility" means office buildings utilized by or rented primarily to non -
retail users. These buildings are designed as garden, mid -rise or high-rise structures.
(f) "Department" shall mean the department of finance of the city.
(g) "Economic Life" means the number of years a property improvement is expected to be in
service in a facility.
(h) "Employee" means a person whose employment is both permanent and fulltime, who works for
and is an employee of the Owner or an employee of a Contractor, who works a minimum of
1,750 hours per year exclusively within the Zone, who receives industry standard benefits, and
whose employment is reflected in the Owner's (and Contractor's, if applicable) quarterly report
filed with the Texas Workforce Commission; but excluding any direct contract (seasonal, part-
time, and full-time equivalent).
(i) "Expansion" means the addition of buildings, structures, fixed machinery or equipment for
purposes of increasing production capacity.
(j) "Facility" means property improvements completed or in the process of construction which
together comprise an integral whole.
(k) "Manufacturing Facility" means buildings and structures, including fixed -in-place machinery
and equipment, the primary purpose of which is or will be the manufacture of tangible goods or
materials or the processing of such goods or materials by physical or chemical change.
(1) "New Facility" means a property, previously undeveloped, which is placed into service by
means other than or in conjunction with expansion or modernization.
(m) "Other Basic Industry Facility" means buildings and structures including fixed machinery and
equipment not elsewhere described, used or to be used for the production of products or services
which primarily serve a market in the creation of new permanent employment and bring in new
wealth.
(n) "Owner of taxable real property" shall mean the person, corporation, company or other entity
responsible for paying property taxes on certain property or an interest therein including a
leasehold interest or interests.
(o) "Regional Distribution Center Facility" means buildings and structures, including fixed
machinery and equipment, used or to be used primarily to receive, store, service or distribute
goods or materials owned by the facility operator where a majority of the goods or services are
distributed to points outside the city.
(p) "Regional Entertainment Facility" means buildings and structures, including fixed machinery
and equipment, used or to be used to provide entertainment through the admission of the general
public where the majority of users reside outside the city.
(q) 'Regional Service Facility" means buildings and structures, including fixed machinery and
equipment, used or to be used to service goods where a majority of the goods being serviced
originate outside the city.
(r) "Retail Facility" means buildings and structures used or to be used for the conducting and
management of business, including the storing and selling of goods directly to the customer.
Section 66-142. ABATEMENT AUTHORIZED
(a) Authorized Facility. A facility may be eligible for abatement if it is a: Regional Distribution
Center Facility that is rail -served, Regional Service Facility that is rail -served, Manufacturing
Facility, Other Basic Industry, Regional Entertainment Facility, Commercial Office Facility, or
Retail Facility.
(b) Creation of New Value. Abatement may only be granted for the additional value of eligible real
property (including fixed -in-place machinery and equipment) listed in an abatement agreement
between the City and the property owner and lessee (if required), subject to such limitations as
City Council and the property tax code may require.
(c) New and Existing Facilities. Abatement may be granted for new facilities, the expansion of
existing facilities, or the improvement to existing facilities having the effect of improving
current environmental conditions.
(d) Eligible Property. Abatement may be extended to the value of buildings, structures, fixed
machinery and equipment, site improvements plus that office space and related fixed
improvements necessary to the operation and administration of the facility. The value of all
property shall be the Certified Appraised Value for each year, as finally determined by the
County Appraisal District ("HCAD").
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(e) Ineligible Property. The following types of property shall be fully taxable and ineligible for
abatement: land; inventories; supplies; tools; furnishings, and other forms of movable personal
property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred maintenance
investments; property to be rented or leased (except as provided in the Section 66-142(f),
"Owned/Leased Facilities"); property which has an economic life of less than 15 years; property
owned or used by the State of Texas or its political subdivisions or by any organization owned,
operated or directed by a political subdivision of the State of Texas, or any property exempted
by local, state or federal law. When such exempted property includes manufacturing machinery
and equipment listed in the Investment Budget (as required in Section 3, "Application"), then
the value of such property may not be included toward the achievement of the investment or
valuation thresholds set out in the Tax Abatement Agreement.
(f) Owned/Leased Facilities. If a leased facility is granted abatement the agreement shall be
executed by both the lessor and the lessee.
(g) Value and Term of Abatement. A tax abatement shall be granted in accordance with the terms of
a Tax Abatement Agreement, as follows:
1. Either with the January 1st valuation date immediately following the date of
execution of the agreement or a subsequent January 1st valuation date not more than
three years after execution of a tax abatement agreement, but not beyond the
completion of construction. Projects are eligible for abatement of new value. Under
no circumstances will any facility be granted the benefit of a tax abatement for
longer than five (5) years. Value subject to abatement must remain greater than or
equal to the contractually -defined "Minimum Value Requirement."
To determine the amount of each year's exemption, the adjusted cap shall be multiplied
by a sliding scale as follows:
Type of Facility
Regional Distribution/Svc
(rail -served facility)
Manufacturing/
Other Basic Industry
Retail/Office/Regional Entertainment
(0 — 50k s.f.)
Retail/Office/Regional Entertainment
(50k — 100k s.f.)
Retail/Office/Regional Entertainment
(100k — 200k s.£)
Retail/Office/Regional Entertainment
(200k s.f. or more)
Year 1 Year 2 Year 3 Year 4 Year 5
Abatement Abatement Abatement Abatement Abatement
20% 15% 5% 5% 5%
20%
15%
5%
5%
5%
20%
15%
5%
5%
5%
50%
25%
10%
10%
5%
50%
50%
25%
25%
25%
50%
50%
50%
50%
50%
2. No tax abatement shall be given in any year in which the facility fails to meet the
contractually defined "Minimum Value Requirement."
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3. All Tax Abatement Agreements shall set out in detail the exact method to be used in
computing each year's exemption.
4. No tax abatement shall be given in any year in which the facility fails to meet the
employment minimum set forth in Section 66-142(h), "Basic Qualifications for Tax
Abatement" of this Article.
(h) Basic Qualifications for Tax Abatement. To be eligible for designation as a reinvestment zone
and receive tax abatement the planned improvement:
1. must be shown to increase the assessed value of the property at least $3.0 million
upon completion of the contractually -defined "Construction Period;"
2. must be shown to directly create or prevent the loss of permanent full-time
employment for at least 10 people within the reinvestment zone upon completion of
the contractually -defined "Employment Period;"
3. must be shown not to solely or primarily have the effect of transferring employment
from one part of City to another.
4. the City may, at its discretion, take into account alternative or competing site
information provided with the application for tax abatement.
(i) Taxability. From the execution of the abatement to the end of the agreement period, taxes shall
be payable as follows:
1. value of ineligible property (as provided in Section 66-142 (e), "Ineligible
Property,") shall be fully taxable;
2. the non abatable real property within the reinvestment zone shall be fully taxable
each year;
3. additional value of new eligible property shall be taxable in the manner described in
Section 66-142 (g), "Value and Term of Abatement;"
4. when due to the employment formula (as described in Section 66-142 (g), "Value
and Term of Abatement,"), the maximum amount eligible for abatement ("the cap")
is less than the total value of the new facility, the amount of the cap will be reduced
each year at the same rate as the taxable improvements are reduced in value from the
previous year's value; and
5. each year's exemption will be computed by HCAD in the following manner:
(a) The Base Property Value will be the current value of all real property plus fixed -
in -place machinery and equipment within the zone that is not subject to
abatement.
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(b) The Base Year Value will be subtracted from the value of the Abated Property
plus the Base Property Value, the result to be called Current Amount Eligible for
Abatement. In no case can this amount exceed the cap set out in the abatement
contract.
(c) The Current Amount Eligible for Abatement is then multiplied by the abatement
schedule set out in section 66-142 (g) to determine the amount of each year's
exemption.
(j) Environmental and Worker Safety Qualification. In determining whether to grant a tax
abatement, consideration will be given to compliance with all state and federal laws designed to
protect human health, welfare and the environment ("environmental laws") that are applicable to
all facilities in the State of Texas owned or operated by the owner of the facility or lessee, its
parent, subsidiaries and, if a joint venture or partnership, every member of the joint venture or
partnership ("applicants"). Consideration may also be given to compliance with environmental
and worker safety laws by applicants at other facilities within the United States.
Section 66-143. APPLICATION
(a) Timely application: Any current or potential owner or lessee of taxable property in
City must request a tax abatement by filing a completed application with the City prior to any
public expression of a siting decision or any commitment (legal or financial) to the proposed
project.
(b) A complete application package for consideration of a tax abatement shall consist of:
• a completed City Application form;
• a completed narrative prepared in accordance with the template provided with
the City Application and its instructions;
• an "Investment Budget" detailing components and costs of the real property
improvements and fixed -in-place improvements for which tax abatement is
requested, including type, number, economic life, and eligibility for a tax
exemption granted by the Texas Commission on Environmental Quality
("TCEQ") (if known);
• a map and legal description of the property;
• a time schedule for undertaking and completing the proposed improvements;
• a ten-year environmental and worker safety compliance history for all facilities
located within the State of Texas and owned in whole or in part by applicants (as
defined in Section 66-142(k), "Environmental and Worker Safety Qualification");
• copies of the immediately preceding quarterly report(s) filed with the Texas
Workforce Commission, documenting the current number of permanent full-
time employees, and full-time Contractor employees, if any, at the time the
application is submitted;
• financial and other information, as the City deems appropriate for evaluating
the financial capacity and other factors of the applicant;
• certification prepared by City Tax Assessor -Collector stating that all
tax accounts within City are paid on a current basis;
• for a leased facility, the applicant shall provide with the application the name
and address of the lessor and a draft copy of the proposed lease, or option
contract. In the event a lease or option contract has already been executed with
owner of site, the document must include a provision whereby abatement
applicant may terminate such contract without penalty or loss of earnest money,
in the event that City does not grant a tax abatement.
(c) Upon receipt of a completed application, the City shall notify in writing and
provide a copy of the application to the presiding officer of the governing body of
each eligible taxing jurisdiction.
(d) After receipt of an application for creation of a reinvestment zone and application for
abatement, the City shall determine whether the application qualifies for a tax
abatement under the terms of these guidelines and criteria. Such determination may
be delegated to an employee or City department. If it is determined that an
application qualifies for abatement, it shall be recommended to the City Council
that the applicant be notified in writing that subject to a public hearing, if applicable,
and approval of a contract by City Council, the project qualifies for abatement.
(e) The City shall not establish a reinvestment zone or enter into an abatement
agreement if it finds that the request for the abatement was filed after the
commencement of construction, alteration, or installation of improvements related to
a proposed modernization, expansion or new facility. Property eligible for abatement
includes only the new improvements that occur after the completion of an abatement
agreement with City.
Section 66-144. PUBLIC HEARING AND APPROVAL
(a) The City Council may not adopt an ordinance designating a reinvestment
zone for the purposes of considering approval of a tax abatement until it has held a public
hearing at which interested persons are entitled to speak and present evidence for or
against the designation. Notice of the hearing shall be clearly identified on the City
Council agenda at least 10 days prior to the hearing. The presiding officers of
eligible Jurisdictions shall be notified in writing at least 7 days prior to the hearing.
(b) At the public hearing, interested persons shall be entitled to speak and present written
materials for or against the approval of the proposed project or tax abatement agreement.
(c) In order to enter into a tax abatement agreement, the City Council must find that
the terms of the proposed agreement meet these Guidelines and Criteria and that:
1. there will be no substantial adverse effect on the provision of the
jurisdictions' service or tax base; and
2. the planned use of the property will not constitute a hazard to public safety,
health or morals.
Any variance to these guidelines must be approved by a vote of at least three-fourths (3/4)
of the City Council.
Section 66-145. AGREEMENT
After approval the City shall formally pass an ordinance and execute an agreement with the owner
of the facility and lessee as required which shall include:
(a) estimated value to be abated and the base year value;
(b) percent of value to be abated each year as provided in Section 66-142 ("Abatement Authorized);
(c) the commencement date and the termination date of abatement;
(d) the proposed use of the facility; nature of construction, time schedule, survey, property
description and improvement list;
(e) contractual obligations in the event of default, violation of terms or conditions, delinquent taxes,
recapture, administration and assignment as provided in Section 66-142 ("Abatement
Authorized"), Section 66-146 ("Recapture"), Section 66-147 ("Administration"), and Section
66-148 ("Assignment"), or other provisions that may be required for uniformity or by state law;
(f) amount of investment, increase in assessed value and number of jobs involved, as provided in
Section 66-142 ("Abatement Authorized");
(g) a requirement that the applicant annually submit to HCAD and City, a January employee count
for the abated facility which corresponds to employment counts reported in the facility's
Employer's Quarterly Report to the Texas Workforce Commission for the quarter most recently
ended at calendar year-end, and a separate notarized letter certifying the number of jobs created
or retained as a direct result of the abated improvements and the number of employees in other
facilities located within the City and the compliance with the environmental and worker safety
requirements in the agreement for the preceding calendar year, for as of January 1. Submission
shall be used to determine abatement eligibility for that year and shall be subject to audit if
requested by the governing body. Failure to submit will result in the ineligibility to receive an
abatement for that year; and
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(h) A requirement that the owner or lessee will (a) obtain and maintain all required permits and
other authorizations from the United States Environmental Protection Agency and the TCEQ for
the construction and operation of its facility and for the storage, transport and disposal of solid
waste; and (b) seek a permit from the TCEQ for all grandfathered units on the site of the abated
facility by filing with the TCEQ, within three years of receiving the abatement, a technically
complete application for such a permit.
(i) Amount of investment and total permanent employees to be retained or created and total full-
time equivalent jobs to be retained or created.
(j) A requirement that the company, on or before February 1 of each year the tax abatement
agreement is in effect, provide the director a sworn statement that includes a delineation of the
number of permanent employees, contract employees and part-time employees of the applicant
company as of the immediately preceding January 1, who report to work in the reinvestment
zone at each site covered by the agreement.
(k) A requirement that the company annually file the Form 111.28 with the appropriate County
appraisal district to qualify for the abatement.
(1) Limit the uses of the property consistent with the general purpose of encouraging development
or redevelopment of the zone during the period that property tax exemptions are in effect.
(m)Contain each term agreed to by the owner of the property.
(n) Require the owner of the property to certify annually to the governing body of each taxing unit
that the owner is in compliance with each applicable term of the agreement.
(o) Provide that the governing body of the municipality may cancel or modify the agreement if the
property owner fails to comply with the agreement.
Such agreement normally shall be executed within 60 days after the applicant has forwarded
all necessary information and documentation to the City
Section 66-146. RECAPTURE
(a) If the facility is completed and begins producing product or service, but subsequently
discontinues producing product or service for any reason for a period of 180 days
during the abatement period, or one year in the event of natural disaster, then the
agreement shall terminate and so shall the abatement of the taxes for the calendar year
during which the facility no longer produces. The taxes otherwise abated for that
calendar year shall be paid to the City within sixty (60) days from the date of
termination. The company or individual shall notify the City in writing at the address
stated in the agreement within ten (10) days from any discontinuation, stating the
reason for the discontinuation and the projected length of the discontinuation. If the
City determines that such requirement has not been complied with, the agreement
may be terminated immediately and all taxes previously abated by virtue of the
agreement may be recaptured and paid within sixty (60) days of the termination.
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(b) If the company or individual is in default according to the terms and conditions of its
agreement, the company or individual shall notify the City in writing at the address
stated in the agreement within ten (10) days from the default, and cure such default
within sixty (60) days from the date of the default ("Cure Period"). If the City
determines that such requirement has not been complied with, the agreement may be
terminated immediately and all taxes previously abated by virtue of the agreement
may be recaptured, together with interest at 6% per annum calculated from the
effective date of the agreement and paid within sixty (60) days of the termination. If
the City does not receive full payment within said sixty (60) days, a penalty may be
added, equal to 15% of the total amount abated.
(c) If the company or individual allows its ad valorem taxes owed the City to become
delinquent and fails to timely and properly follow the legal procedures for its protest
and/or contest, the agreement then may be terminated, and all taxes previously abated
by the agreement may be recaptured and paid within sixty (60) days of the
termination, and penalties and interest may be assessed as set out in Section 66-146
("Recapture").
Section 66-147. ADMINISTRATION
(a) The Chief Appraiser of the County annually shall determine an assessment of the real
and personal property comprising the reinvestment zone. Each year, the company or
individual receiving abatement shall furnish the assessor with such information as
may be necessary for the abatement. Once value has been established, the Chief
Appraiser shall notify the affected jurisdictions, which levies taxes of the amount of
the assessment.
(b) The agreement shall stipulate that employees and/or designated representatives of the
City will have access to the reinvestment zone during the term of the abatement to
inspect the facility to determine if the terms and conditions of the agreement are being
met. All inspections will be made only after giving twenty-four (24) hours prior
notice and will only be conducted in such manner as to not unreasonably interfere
with the construction and/or operation of the facility. All inspections will be made
with one or more representatives of the company or individual and in accordance with
the facility's safety standards.
(c) Upon completion of construction, the City or the jurisdiction creating the
reinvestment zone annually shall evaluate each facility receiving abatement to ensure
compliance with the agreement and report possible violations to the contract and
agreement to the City Council and the City Attorney and the affected jurisdictions which
levy taxes.
Section 66-148. ASSIGNMENT
A tax abatement agreement may be assigned to a new owner or lessee of a facility with the written
consent of the City Council, which consent shall not be unreasonably withheld. Any assignment
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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. Any
assignment of a tax abatement agreement shall be to an entity that continues the same improvements
or repairs to the property (except to the extent such improvements or repairs have been completed),
and continues the same use of the facility as stated in the original Tax Abatement Agreement with
the initial applicant. No assignment shall be approved if the assignor or the assignee is indebted to
the City for past due ad valorem taxes or other obligations.
Section 66-149. SUNSET PROVISION
(a) These Guidelines and Criteria are effective, and will remain in force until
, at which time all tax abatement contracts created pursuant to these provisions
will be reviewed by the City to determine whether the goals have been achieved. Based on
that review, the Guidelines and Criteria will be modified, renewed, or eliminated.
(b) This policy is mutually exclusive of existing Industrial District Contracts and owners
of real property in areas deserving of special attention as agreed by the affected
jurisdictions.
Section 66-150. LIMITATIONS
The adoption of the guidelines and criteria by the city council of the City of La Porte
does not:
(1) Limit the discretion of the city council of the City of La Porte to decide
whether to enter into a specific tax abatement agreement;
(2) Limit the discretion of the city council of the City of La Porte 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
(3) Create any property, contract, or other legal right in any person to have the city
council of the City of La Porte consider or grant a specific application or request for
tax abatement.
Section 66-151. NONAPPLICABLE AREAS; EXCEPTION
The city council of the City of La Porte hereby establishes the policy of the City of La Porte,
that tax abatement agreement applications will not be accepted for areas within any existing
Industrial District or Tax Increment Reinvestment Zone of the City of La Porte or any Industrial
District or Tax Increment Reinvestment Zone, which may be created. However, as to any portion of
such areas which are not within the corporate limits of the City of La Porte, Harris County
Commissioners Court may establish tax abatement agreements for the benefit of itself, and taxing
units other than the City of La Porte having jurisdiction over said area."
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Section 2: All ordinances or parts of ordinances inconsistent with the terms of this ordinance are
hereby repealed; provided, however, that such repeal shall be only to the extent of such
inconsistency and in all other respects this ordinance shall be cumulative of other ordinances
regulating and governing the subject matter covered by this ordinance.
Section 3. Should any section or part of this ordinance be held unconstitutional, illegal, or invalid,
or the application to any person or circumstance for any reasons thereof ineffective or inapplicable,
such unconstitutionality, illegality, invalidity, or ineffectiveness of such section or part shall in no
way affect, impair or invalidate the remaining portions thereof; but as to such remaining portion or
portions, the same shall be and remain in full force and effect and to this end the provisions of this
ordinance are declared to be severable.
Section 4. The City Council officially finds, determines, recites, and declares that a sufficient
written notice of the date, hour, place and subject of this meeting of the City Council was posted at
a place convenient to the public at the City Hall of the City for the time required by law preceding
this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code; and
that this meeting has been open to the public as required by law at all times during which this
ordinance and the subject matter thereof has been discussed, considered and formally acted upon.
The City Council further ratifies, approves and confirms such written notice and the contents and
posting thereof.
Section 5. This Ordinance shall be effective from and after its passage and approval.
PASSED AND APPROVED this 26th day of April, 2010.
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ATTEST:
Martha A. Gillett
City Secretary
APPROVED:
ox W. Askins
City Attorney
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CITY OF LA PORTE
CONFLICT OF INTEREST AFFIDAVIT
THE STATE OF TEXAS I
COUNTY OF HARRIS §
I, v\N N 1 � L� as a member of the City of La Porte i �J
(Lc -I \ , make this affidavit and hereby on oath state the foIlowing: I have a
substantial interest in a business entity or real property as defined in Chapter 171, Texas Local
Government: Code, and a vote is to be taken or a decision is to be made that will have a special
economic effect on this business entity or real property.
The agenda item on � C) r t +i.� , 20 D I , affecting this business entity or real
Ply is: \ (It 5C
COMPLETE (A) OR (B):
(A) The business entity ist f ��� 1J CC4C 01,,; (name); or
(B) The real property is located at:
I have a substantial interest for the following reasons: (check all which are applicable)
Ownership of 10% or more of the voting stock or shares of the business entity.
Ownership of 10% or more or $15,000 or more of the fair market value of the
business em ity.
Funds received from the business entity exceed 10% of gross income for the
Previous year.
Real property is involved and I have an equitable or legal ownership of the
property with, a fair market value of at least $2,500.
A relative of mine has a substantial interest in the business entity or real
property flat would be affected by a decision of the public body of which I
am a member.
Upon filing of this affidavit with the City Secretary, I affirm that I will abstain from voting on any
decision involving this business entity or real property and from any further participation on this
matter by discussion or debate.
(� r
Singed this U�v day of C , 20,t Li
Signature of Official
THE STATE OF TEXAS $
COUNTY OF HARRIS $
Before me C '1 i ' i� on this day personally qpmrd
known to me to be the person whose name is mbscn'bed to the
foregoing instrument and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this Lk��day of , 20
(sem-) -
` q, LL rq, 1 jy
1:t 1
N lic in and Tor the Stale of Teras
MARTHA SILLETT
MP Corr wabn Ercpkri
timet 91, 2013