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G-93-12-09-9G - 12/9/1993ORDINANCE NO. ( - 4 - - C C1- AN ORDINANCE 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 § 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, Now Therefore BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: That the following guidelines and criteria governing tax abatement agreements within the city limits and extraterritorial jurisdiction of the City are hereby adopted. 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: KS\ORDINANCE OR12093G 1. be a major investment in the zone that will substantially increase the appraised value of property within the zone; and 2. contribute to the retention or expansion of primary and secondary employment within the City. 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 and 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 both, as provided by § 312.204, 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. 2. 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 § 312.205, Tax Code, the tax abatement agreement shall include the following: 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; 3. 4. a proposed use of improvement, nature of construction, time schedule, map, and property description; and 5. 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. 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. SECTION VI. A. All ordinances, parts of ordinances, or resolutions in conflict herewith are expressly repealed. 4. B. The invalidity of any section or provision of this ordinance shall not invalidate other sections or provisions thereof. 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 (4 '("k day of ���F \\v-- , 1993. Alternative 2. READ and APPROVED on first reading this the day of , 1993. READ, APPROVED and ADOPTED on second reading this the day of , 1993. ATTEST: irlirIL NE LAND, City Secretary CHARLES CULPEP/PE ' Mayor City of Round R c , Texas 5. DATE: December 7, 1993 SUBJECT: City Council Meeting, December 9, 1993 ITEM: 9.G. Consider an ordinance readopting guidelines and criteria governing reinvestment zones and tax abatement agreements within the City limits or extraterritorial jurisdiction of Round Rock, Texas. STAFF RESOURCE PERSON: STAFF RECOMMENDATION: Joe Vining Approval Ordinance No. 2556 which established criteria and guidelines for Reinvestment Zones expires December 12, 1993. This ordinance will replace the expiring ordinance. State law requires the City to establish Criteria and Guidelines for Reinvestment Zones prior to establishing such a zone or approving a tax abatement agreement. The ordinance proposed contains the same provisions as the previous ordinance. This ordinance is enabling only and does not require the city to grant any abatement.