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G-99-10-28-9B3 - 10/28/1999ORDINANCE NO. ' 99-10-Q3- 9 AN ORDINANCE RE -ADOPTING GUIDELINES AND CRITERIA GOVERNING REINVESTMENT ZONES AND TAX ABATEMENT AGREEMENTS WITHIN THE CITY LIMITS OR EXTRATERRITORIAL JURISDICTION OF ROUND ROCK, TEXAS; PROVIDING A SAVINGS CLAUSE AND REPEALING CONFLICTING ORDINANCES AND RESOLUTIONS. WHEREAS, the City of Round Rock must compete with other localities across the nation currently offering tax abatements and other incentives to attract new industry; and WHEREAS, new jobs and industries will benefit the local economy, strengthen the real estate market, and generate future tax revenue; and WHEREAS, pursuant to Section 312.201 of the Tax Code, V.A.T.S., the city may not designate an area as a reinvestment zone and may not enter into a tax abatement agreement unless the City Council has established guidelines and criteria governing tax abatement agreements; and WHEREAS, on the 9th day of October, 1997, the City of Round Rock adopted Ordinance No. G -97-10-09-9F, adopting guidelines and criteria governing reinvestment zones and tax abatement agreements and now desires to re -adopt said guidelines and criteria; Now Therefore BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: K:\WPDOCS\ORDINANC\091028B3.WPD/sc I . That the following Guidelines and Criteria Governing Reinvestment Zones and Tax Abatement Agreements adopted in Ordinance No. G -97-10-09-9F on the 9th day of October, 1997, is re- adopted as follows: SECTION I. AUTHORIZATION OF ABATEMENT A. Economic Oualifications. In order for the owner of property within a reinvestment zone to be eligible to receive tax abatement, the owner must show that the planned project will: 1. if the tax abatement is requested for a commercial or industrial project which will employ five or more people, be a major investment in the zone that will substantially increase the appraised value of property within the zone; and 2. if the tax abatement is requested for a commercial or industrial project which will employ five or more people, contribute to the retention or expansion of primary and secondary employment within the City. 3. if the tax abatement is requested for a residence or commercial project which will employ less than five people, that the project will be feasible and would be of benefit to the land within the zone. 2 B. Creation of New Value. Abatement may be granted for real property in each year covered by an agreement only to the extent its value for that year exceeds its value for the year in which the agreement is executed. Abatement may be granted for tangible personal property located on the real property in each year covered by the agreement other than tangible personal property that was located on the real property at any time before the period covered by the agreement with the City and other than inventory supplies. C. Agricultural Exemptions Denied. No tax abatement shall be granted for any property unless and until full market value taxes have been paid for five years prior to the execution of a tax abatement agreement. D. Industrial Districts. No tax abatement shall be granted for any property included in an Industrial District. E. Eligible Property. Tax abatement agreements may exempt from taxation a portion of the value of the real property or of tangible personal property located on the real property, or other property, as provided by Section 312 of the Tax Code. F. Owned/Leased Facilities. If a leased facility is granted an abatement, the tax abatement agreement shall be signed by both the lessor and the lessee. 3 G. Value and Term of Abatement. Abatement shall be granted effective on January 1 of the year following the date of execution of the tax abatement agreement. The percentage of the increase abated shall be determined in each tax abatement agreement, however, no tax abatement agreement shall exceed ten (10) years. SECTION II PUBLIC HEARING AND APPROVAL A. Prior to entering into any tax abatement agreement, the City may, at its option, hold a public hearing at which interested persons shall be entitled to speak for or against the approval of the tax abatement agreement. B. Before approving any tax abatement agreement, the City must find that the terms of the proposed agreement meet these Guidelines and Criteria and that: 1. there will be no substantial adverse affect on the provision of city services or on its tax base; and 2. the planned use of the property will not constitute a hazard to public safety, health, or welfare. SECTION III AGREEMENT A. In addition to the specific requirement of Section 312.205, Tax Code, the tax abatement agreement shall include the following: 4 1. an estimated increase to be abated and the current assessed value of property; 2. a percent of increase to be abated each year; 3. a commencement and expiration date of abatement; 4. a proposed use of improvement, nature of construction, time schedule, map, and property description; and 5. if the tax abatement is requested for a commercial or industrial project which will employ five or more people, an estimated number of jobs involved per year for the life of tax abatement agreement. SECTION IV ASSIGNMENT A. Tax abatement agreements may be assigned to a new owner or lessee of the improvements with the written consent of the City of Round Rock, which consent shall not be unreasonably withheld. Any assignment shall provide that the assignee shall irrevocably and unconditionally assume all duties and obligations of the assignor as set out in the agreement. No assignment shall be approved if the assignor or assignee are indebted to the City for ad valorem taxes or other obligations. 5 SECTION V AMENDMENTS TO GUIDELINES A. These Guidelines and Criteria are effective upon the date of their adoption and will remain in force for two (2) years, at which time all Reinvestment Zones and tax abatement agreements created pursuant to its provisions will be reviewed by the City of Round Rock to determine whether the goals have been achieved. B. These Guidelines and Criteria are mutually exclusive of existing Industrial District agreements. II. A. All ordinances, parts of ordinances, or resolutions in conflict herewith are expressly repealed. B. The invalidity of any section or provision of this ordinance shall not invalidate other sections or provisions thereof. C. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Ordinance was adopted was posted and that such meeting was open to the public as required by law at all times during which this Ordinance and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open 6 • Meetings Act, Chapter 551, Texas Government Code, as amended, and the Act. Alternative 1. By motion duly made, seconded and passed with an affirmative vote of all the Council members present, the requirement for reading this ordinance on two separate days was dispensed with. READ, PASSED, and ADOPTED on first reading this cQ day of Cd49414.11—) , 1999. Alternative 2. READ and APPROVED on first reading this the day of , 1999. READ, APPROVED and ADOPTED on second reading this the day of , 1999. ATTEST: E LAND, City Secretary ROB RT A. STLUKA,C4R., Mayor City of Round Rock, Texas 7 DATE: October 21, 1999 SUBJECT: City Council Meeting — October 28, 1999 ITEM: 9.B.3. Consider an ordinance re -adopting guidelines and criteria governing reinvestment zones and tax abatement agreements within the city limits or extraterritorial jurisdiction of Round Rock. (First Reading) State law requires that these guidelines and criteria be readopted every two years. There have been no changes to the existing ordinance adopted October 9, 1997. This ordinance is enabling only and does not require the City to grant any abatement. Staff Resource Person: Joe Vining, Planning Director.