HomeMy WebLinkAboutORD 97-40 ORDINANCE NO.
ENTITLED AN ORDINANCE NOMINATING AN AREA AS AN
ENTERPRISE ZONE PURSUANT TO THE TEXAS
ENTERPRISE ZONE ACT (TEXAS GOVERNMENT CODE,
CHAPTER 2303); PROVIDING TAX INCENTIVES;
DESIGNING AN AUTHORIZED REPRESENTATIVE TO ACT
IN ALL MATTERS PERTAINING TO THE NOMINATION AND
DESIGNATION OF THE AREA DESCRIBED HEREIN AS AN
ENTERPRISE ZONE AND REINVESTMENT ZONE (TEXAS
TAX CODE, CHAPTER 312); AND FURTHER DESIGNATING
A LIAISON TO ACT ON ALL MATTERS PERTAINING TO
THE ENTERPRISE ZONE ACT ONCE DESIGNATED BY THE
TEXAS DEPARTMENT OF COMMERCE.
WHEREAS, the City Council of the City of Beaumont, Texas desires to create the
proper economic and social environment to induce the investment of private resources in
productive business enterprises located in severely distressed areas of the city and to
provide employment to residents of such area;
WHEREAS, certain conditions exist in such area which represent a threat to the
health, safety, and welfare of the people of such area; and
WHEREAS, it is in the best interest of the City to nominate such area as an
enterprise zone pursuant to the Texas Enterprise Zone Act (Texas Government Code,
Chapter 2303, the "Act");
NOW, THEREFORE, BE IT ORDAINED BY THE
CITY OF BEAUMONT:
Section 1.
That the City Council hereby nominates the area set forth and attached hereto as
Exhibit A, and made a part hereof for all purposes as an enterprise zone (herein the
"zone").
Section 2.
That the City Council finds the zone area meets the qualifications of the Act.
Section 3.
That the City Council has heretofore adopted a "Uniform Tax Abatement Policy",
attached hereto as Exhibit B.
Section 4.
That the City Council will provide certain tax incentives applicable to business
enterprises in the zone which are not applicable throughout the City as follows:
• The City shall refund to any qualified business located
in the amount of tax paid under the Municipal Sales
and Use Tax Act (Texas Tax Code, Chapter 321) by the
business and remitted to the Comptroller of Public
Accounts up to the maximum extend authorized by
Sections 2303.505 and 2303.506 of the Act, and for a
period determined by the city, but which shall not
exceed five years.
• The City may abate taxes on the increase in value of
real property improvements and eligible personal
property that locate in the zone. The level of
abatement shall be based upon the extent to which the
business either expends funds toward capital
improvements or creates jobs for qualified employees,
in accordance with the attached Exhibit B, and with
qualified employee being defined by the Act.
Other incentives that may be negotiated in the zone on a case-by-case basis
are as follows: (the first three being offered only in the zone):
O Accelerated zoning and permit procedures.
O Transfer of city-owned surplus land at below market
prices for the public purpose of economic development.
• The City will apply for training grants for new
permanent jobs as available and appropriate to the
industry.
• Revolving loan fund to assist business creating new
permanent jobs.
• Capital improvements in water and sewer facilities and
road repair.
Section 5.
That the area described in this ordinance is designated as an enterprise zone,
subject to the approval of the Texas Department of Commerce.
Section 6.
That the City Council directs and designates its City Manager as the City's
authorized representative to act in all matters pertaining to the nomination and designation
of the area described herein as an enterprise zone.
Section 7.
That the City Council further directs and designates its City Manager as liaison for
communication with the Department to oversee zone activities and communications with
qualified businesses.
Section 8.
That a public hearing to consider this ordinance was held by the City Council on
August 25, 1997.
Section 9.
That this ordinance shall take effect from and after its passage as the law and
charter in such case provides.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the -� ,,-/ day of
c , 1997.
-Mayor-
Beaumont / Nederland
Jefferson County
Enterprise Zone
(Proposed)
E
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Enterprise Zones
Enterprise Zone Lines
•Census Traa Boundaries
Census Block Group Boundaries
Major Roads
Other Roads
®Hydrography
Places
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EXHIBIT B
UNIFORM TAX ABATEMENT POLICY
A The City of Beaumont herein("Governmental Entity") adopts this policy of tax abatement
("Policy") for a manufacturer who owns real property ("Real Property Owner")who proposes a
project ("Project") to develop, redevelop and improve taxable qualifying real property("Real
Property"). The Governmental Entity is willing to provide a subsidy to a Real Property Owner in
the form of a special exemption from certain taxes provided the Real Property Owner agrees to
accept and abide by this Policy.
B. Subject to the remaining terms of this Policy, the abatement of ad valorem taxes on Real
Property shall be according to the following formula:
NUMBER OF NEW
PERCENT OF CREATED CAPITAL COST OF FULL-TIME JOBS
VALUE TO BE ABATED THE PROJECT (OR) TO BE CREATED
0% 0 - 1,000,000 Not Applicable
30% 1,000,001 - 2,500,000 26-50
40% 2,500,001 - 5,000,000 51-75
50% 5,000,001 - 10,000,000 76-100
Weighted Average 10,000,001 - 50,000,000 Not Applicable
Individual Case Basis 50,000,001 or more Not Applicable
C. With respect to a Project with a minimum construcbor� �ost of$50,000,001, each tax
abatement request will be indivicually re,iclved Entity and approved or
declined based on the merits of the application. '111 of taxes abated are one hundred
percent abatement until Project Completion, not to exceed the first and second Tax Year. The
percentage of taxes abated for the first through fifth Tax Years next following Project Completion
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EXHIBIT«B„
shall be that percentage of abatement granted by the Governmental Entity at the time of
application. With respect to weighted average, the percentage of taxes abated for a Project with a
minimum construction cost of between $10,000,001 and $50,000,000 are: one hundred percent
abatement until the Project is complete not to exceed the first and second Tax Year; ninety
percent abatement for the first Tax Year next following the timely and successful completion of
the Project ("Project Completion"); seventy-five percent abatement for the second Tax Year next
following Project Completion; sixty percent abatement for the third Tax Year next following
Project Completion; forty-five percent abatement for the fourth Tax Year next following Project
Completion; and twenty percent abatement for the fifth Tax Year next following Project
Completion. With respect to a Project under $10,000,000, the period of abatement is seven years;
limited, however, to no more than five Tax Years next following Project Completion.
The period of time that the Taxes are abated will be referred to as the"Abatement
Period". The"first Tax Year" is defined as the first full calendar year next following the
commencement of construction of the Project. The term"Tax Year"is defined as a calendar year.
D. Prior to beginning the actual construction work on the Project proposed for tax
abatement, the Real Property Owner requesting tax abatement within a lawfully created
reinvestment zone must:
(1) Provide the Governmental Entity with(a) a description of the Project clearly
defining and delineating c v-ork to perform; (b) a statement agreeing to expo, z i , �.sk �g ,:;ted
amount ("Project Cost") for the Project and, if the abatement is based on Requi{eCi:obs a
separate statement agreeing that the required minimum number of full-time jobs will be created
("Required Jobs) and maintained during the term of the Contract; (c) an explanation as to how
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the Project will provide long term significant positive economic benefit to the community, the
Governmental Entity and its taxpayers; (d) information as to what attempt will be made to utilize
Jefferson County contractors and workers; and (e) information as to what attempt will be made to
utilize Jefferson County minority contractors and workers.
(2) Furnish the Governmental Entity with a written statement that tax abatement will
be a significant factor in determining whether the Project for the development, redevelopment or
improvement of the Real Property will take place.
(3) Agree to execute a Contract with the Governmental Entity containing the
covenants and conditions required by the Governmental Entity.
E. Should the Governmental Entity agree to grant an abatement to the Real Property
Owner after compliance with the procedure outlined above, then:
(1) Subject to the terms and conditions of the Contract, a stipulated percentage
as set forth above of those particular ad valorem real property taxes ("Taxes")which are
generated by virtue of fair market value created "("Created Value") solely due to the construction
and completion of the Project on the Real Property will be abated.
(2) The Period of Construction("Construction Period")for the Project shall
not go beyond the end of the second Tax Year. During the Construction Period the Real
Property Owner must actually expend the Project Cost.
(3) Within six months nek—�following the end of tille C mstruc'ion Peii0d, the
must be operational; i.e., it must actively serve the purpose for which it is designed.
(4) In the event the Project is either:
(a) Not complete at the Minimum Cost by the end of the Construction
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Period; or
(b) Is timely completed at the Minimum Cost but is not operational
within six months next following the end of the Construction
Period; or
(c) Is timely completed at the Minimum Cost of less than $10,000,000
but the Required Jobs are not created or maintained as set forth in
paragraph(B); or
(d) Is timely completed at the Minimum Cost, is operational within six
months next following the end of the Construction Period and, if
applicable, meets the job requirements, but its operations are
discontinued for a continuous period of twelve months, then the
Contract shall terminate with respect to the Project and so shall the
abatement of Taxes for the Created Value of the Project. The
Taxes otherwise abated with respect to the Project shall be paid to
the Governmental Entity on the date specified by law, or, if such
date has passed, then within sixty(60) days of the accelerated
termination of the Abatement Period.
(S) .Employees a dior designated representatives of the Governmental Entity
vill have ay:c es s r o tlh i rof oci. the term of the contract for inspection purposes so as to
determine if-b .ter r.s :r.d conditions of the Contract are being met. All inspections will be made
only after the giving of twenty-four(24)hours prior notice and will only be conducted in such a
manner as to not unreasonably interfere with the construction and/or operation of the Project. All
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inspections will be made with one or more representatives of the Real Property Owner, and in
accordance with its safety standards.
(6) In the event that (a) The Real Property Owner allows its ad valorem taxes
owed the Governmental Entity to become delinquent and fails to timely and properly follow the
legal procedures for their protest and/or contest; or(b)the Real Property Owner violates any of
the terms and conditions of the Contract, and fails to cure during the Cure Period (as hereafter
provided), then the Contract may be terminated by the Governmental Entity, and all taxes
otherwise abated by virtue of the Contract will be recaptured and paid to the Governmental Entity
by the Real Property Owner within sixty(60)days of the termination.
(7) The term"Base Year Value" as used herein is the market value of all
industrial realty improvements of the Real Property Owner located within the taxing entity as of
January 1 of the year a contract is executed less the abated value of all projects granted the Real
Property Owner by the taxing entity for that"Base Year". The term"Taxable Value" is
determined by deducting the amount of any abatements granted for that Tax Year from the
appraised market value of all industrial realty improvements of the Real Property Owner located
within that taxing entity. If on January 1 st of any Tax Year all of the legally determined realty
improvements owned by the Real Property Owner within the jurisdiction of the Governmental
Entity is less than the legally determined Base Year Value and/or in the event that the Real
Property Owl-ler reduces their ad ;alorem taxes on personal property otherwise payable .o the
Governmental Entity by parti6pating in a foreign trade zone or by having otherwise taxable
property exempted pursuant to special legislation, e.g., the"Freeport Amendment" ("Special
Treatment"), then the abatement otherwise available shall be reduced by one dollar for each dollar
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that the Taxable Value is less than the Base Year Value and, also, for each dollar of tax reduction
attributable to Special Treatment; provided, however, that in no event shall the offset exceed the
Created Value of the Project otherwise subject to the abatement of Taxes.
(8) Notwithstanding any other provision herein to the contrary in the event that
the Governmental Entity adopting this Policy is required to adopt a tax rate which would subject
the Entity to a tax rollback election under Section 26.07 of the Property Tax Code, and this
increase is caused by requirements set forth by the State; mandated by the judiciary; expenses
required to repair, rebuild or rehabilitate improvements which are damaged or destroyed; or due
to a significant decline in value of a major industrial complex located in the jurisdiction of the
Entity, then the Entity may allocate the taxable value necessary to reduce the actual rate below the
rollback rate to the Owners of abated property based on the Owner's prorata share of the total
abated value for the current tax year.
(9) Should the Governmental Entity determine that the Real Property Owner is
in default in the terms and conditions of the Contract, then the Governmental Entity will notify the
Real Property Owner at the address stated in the Contract of such claimed default, and if such is
not cured within sixty(60) days from the date of such notice("Cure Period"), the Contract may
be terminated by the Governmental Entity. Any notice of default shall be in writing and shall be
given by personal delivery or by certified mail, return receipt requested. In the event the notice is
effected by personal delivery, the date and Dour cif ac iiv& deli r _" shall aye tine time and date of
such notice to the Business. Absent a postal :strike or thy, stoppage of the mails, in the event of
delivery of notice by registered or certified United States mail, the date and hour following 48
hours after the date and hour at which the sealed envelope containing the notice is deposited in
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the United States mail, properly addressed, and with postage prepaid, shall be the time and date of
such notice to the Real Property Owner.
F. The Governmental Entity adopting this Policy shall have the final decision with
respect to its interpretation and, also, as to whether the minimum standards set forth above have
been met by the Real Property Owner.
G. This Policy shall terminate on the second anniversary from the date of its adoption
by the Governmental Entity.
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