97-T-4 Tax Abatement
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ORDINANCE NO. 97- -r - ~
AN ORDINANCE
BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS, ADOPl'ING GUIDELINES AND CRITERIA FOR
TAX ABATEMENT AND RE- INVES'lMENT ZONES
WHEREAS, the Texas Property Tax Code, Section 312,
allows governing mrits to provide ad valorem tax abatements in
the interests of econanic develo};meIlt; and
WHEREAS, the City' Cotmcil desires to support the
establishment of re-investrnent zones and provide tax abatements
in the interests of econanic developnent; NCM THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF saiERTZ, TEXAS:
THAT the City Cotmcil adopts the City of Schertz
Guidelines and Criteria for Tax Abatement and Re-Investrnent
Zones, as attached and made a part hereof.
THAT this ordinance replaces Ordinance No. 94-T-33 in
its entirety and will be effective on 1 January, 1997, and will
expire on 31 December, 1998, a period of two years.
Approved on first reading th...?b<day of a 1997
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Mayor, City of Schertz, Texas
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City Secretary, City of Schertz
(SEAL OF CITY)
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CITY OF SCHERTZ GUIDELINES AND CRITERIA FOR
TAX ABATEMENT AND REINVESTMENT ZONES
1. Introduction
a. Under the Authority of the Property Redevelopment and
Tax Abatement Act (Section 312 et. seq. Texas Property Tax
Code), the City of Schertz hereby establishes Guidelines and
Criteria for Tax Abatements and Reinvestment Zones.
b. The intent of this abatement program is to provide an
incentive to current and future commercial property owners to
invest in the City of Schertz. These guidelines are but a
part of the overall incentive program of the City of Schertz.
Abatements granted under this program must take into account
any other incentives provided by the City in order to assure
the overall incentive package is in the best interests of the
citizens of Schertz.
c. Nothing in this policy shall imply or suggest
the City of Schertz is under any obligation to provide
incentive to any applicant. All such applications for
abatement and other economic development incentives shall
considered on an individual basis. The City Council of
City of Schertz has final approval or disapproval on
application, at its discretion.
that
any
tax
be
the
any
2. Definitions
a. "Abatement" means the full or partial exemption from
ad valorem taxes of certain real property in a reinvestment
zone designated for economic development purposes.
b. "Reinvestment Zone,i is an area where the City has
decided to influence development patterns and attract major
investments that will contribute to the development of the
City through the use of tax abatement.
c. "Modernization" means the replacement and upgrading
of existing facilities which increases the productive input or
output, updates the technology or substantially lowers the
cost of operation. Modernization may result from the
construction, alteration, or installation of buildings,
structures, fixed machinery or equipment. It shall not be for
the purpose of reconditioning, refurbishing, or repairing.
d. "Base Year Value" means
eligible property on the 1st of
execution of the agreement.
the assessed value of
January preceding the
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(3) should not have the effect of merely
transferring existing employment from one part of the
City of Schertz to another without demonstration of
increased future investment (Dollars or Jobs) or unusual
circumstances whereby without such a move employment is
likely to be reduced.
b.
if, the
Abatement
expansion
The City shall not enter into an abatement agreement
City Council finds that the Application for Tax
was filed after the commencement of construction,
or modernization.
c. No abatement will be approved that exceeds 90% of new
appraised value or that will reduce current ad valorem
revenues. If the computed percentage from a standard
abatement in Table I, and any additive percentage as defined
below, exceeds 90% of appraised new value, an extension of the
abatement term beyond 5 years may be considered, up to a
maximum of 10 years.
6. Standard Abatement
a. The standard tax abatement is for a period of 5 years
and is based so~ely on capital improvements to real property.
Table 1 below establishes the level of capital improvements
required and the percentages to be allowed.
Table 1
STANDARD FIVE-YEAR ABATEMENT
Percent Abatement
0%
Capital Cost of the
Projected Improvements
o - Less than double
the current assessed value
5%
10%
Double the assessed value
1%
$75,000 of approved
capital improvements.
For each additional $45,000
of approved Capital
Improvements.
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b. In all cases, in order to be considered for the
optional abatement, the applicant must meet the initial
$75,000.00 capital improvement criteria of the standard
abatement as outlined in Table 1. In addition, the period of
the abatement of each of the optional additives will run
concurrently with the approved rate from the standard criteria
in Table 1, subject to paragraph 6b.
terms
that,
these
c. These optional abatements will be included in the
of the abatement agreement. The agreement will provide
other taxing entities mayor may not choose to allow
abatements, in the same amounts.
8. Special Abatements
a. Research has indicated the City of Schertz has
special qualifications for certain industries, as well as
needs for certain industries. These industries are those we
believe to be critical to our future development and as such
should receive special consideration. The underlying
philosophy is to diversify/expand the commercial tax base.
(1) Hotel/Motel Operations. With an additional
hotel, the city would derive considerable additional
revenues in several areas. The development of a
hotel/motel complex would also upgrade the image of the
city.
(2) Industries in a Foreign Trade Zone. With the
approval of the Tri-County business park asa Foreign
Trade Zone, consideration should be given to increase
incentives for companies that deal in international
trade.
(3) Recycling Industries. Recycling is considered
by many to be an industry of the future. Providing
incentives to develop such an industry in Schertz is a
prudent course. Such industry however, should not in
and of itself cause pollution beyond that of the light
industry. category outlined in current zoning
regulations.
(4) Enterprise Zones. Companies that locate in
approved Enterprise Zones, that meet the requirements of
a "qualified business" as defined in the Enterprise Zone
Act, may qualify for the special abatement criteria as
defined below.
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(4) If an abatement request is based on the
tax, briefly describe the products or services
taxed and an estimate of taxes to be collected.
sales
being
(5) The tax I.D. of the property.
(6) A site plan that shows the building footprint,
landscaping, fencing, etc. A site plan approved (or
proposed) by the City of Schertz Planning and Zoning
Commission will satisfy this requirement.
d. The completed application will be presented to the
City's Economic, Development Department. A copy of the
application will be provided to the City Manager.
e. The application may be forwarded to appropriate City
departments (Planning and Zoning, Building Inspections, Fire,
Public Works, POlice, etc.) for staff review and comments.
f. After staff review, the City's Economic Development
Commission will review the application for policy
implications, and make a recommendation to the City Council
(through the City Manager) to approve, modify, or disapprove
the requested abatement. The Economic Development Commission
may also return the application to the Economic Development
Department for additional information without action.
g. If the Economic Development Commission recommends
approval, the City's Economic Development Department shall
notify in writing the presiding officer of the governing body
of each taxing jurisdiction.
h. The City Manager will forward the application to City
Council with Comments and/or recommendations. The City
Manager may also return the application to staff or the
Commission for additional information if necessary.
i. City Council will consider the application and all
comments and recommendations. If the City Council concludes
that the application has merit, the City Council will approve
the original or modified application for abatement by
ordinance and authorize the City Manager to enter into an
abatement agreement within the guidelines established within
the ordinance. If a variance was requested, City Council must
adopt the ordnance by a three-fourths vote of the entire
council.
j. In order to enter
City Council of Schertz
proposed agreement meet
that:
into a tax abatement agreement, the
must find that the terms of the
these Guidelines and Criteria and
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(2) the commencement date and the termination date
of abatement;
(3) the proposed use of the facility, the proposed
construction/modernization time schedule;
(4) a map or approved plat of the property and a,
property description;
(5)
violation
recapture,
provisions
law;
contractual obligations in the event of default,
of terms or conditions, delinquent taxes,
administration and assignment, or other
that may be required for uniformity or state
(6) amount of investment and average number of jobs
involved;
(7) percent to be abated as provided by paragraphs
5, 6, and 7 above.
(8) , City Council may approve the Tax Abatement
the abatement agreement in a single ordinance if
other statutory and evaluation requirements have
met.
and
all
been
b. The agreement shall stipulate the employees and/or
designated representatives of the City of Schertz will have
access to the applicants property/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 of 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.
c. The agreement shall indicate, within the terms of the
agreement, those portions of the abatement amounts that are
optional for other taxing entities.
d. The agreement shall also include a statement by the
company, that on or prior to January 15th of each year during
the term of the abatement, they will provide the Economic
Development Department a letter certifying the company meets
or exceeds the criteria upon which the abatement was approved.
Failure to do may constitute a default by the company, and
cause termination of the agreement.
13. Defaul t and Recapture
a. In the event that the facility is completed and
begins producing products or services, but SUbsequently
discontinues producing products or services for any reason
excepting fire, explosion or other casualty or accident or
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. '
15. Assignment.
Tax abatement agreements may be assignable to a new owner
only with City Council approval.
16. Sunset Provision.
a. These Guidelines and Criteria are effective upon the
date of their adoption and will remain in force for two years,
at which time all reinvestment zones and tax abatement
contracts pursuant to it's provisions will be reviewed by the
City of Schertz to determine whether the goals of Guidelines
and Criteria have been achieved and Guidelines and Criteria
have been followed. Based on that review, the Guidelines will
be modified, renewed or eliminated as necessary.
b. During the two year period, the
Criteria may be amended or repealed only
three-fourths of the City Council.
Guidelines
by a vote
and
of
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L.A. R3YNOLDS known
PUBLISHER's'AFFIDAVIT
THE STATE OF TEXAS,
County of Guadalupe
Before me, the undersigned authority, on this date personally appeared
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to me, who, being by me duly sworn, on his oath deposes and says that he is the Publisher of The Seguin
Gazette-Enterprise, a newspaper published in said county; that a copy of the within and foregoing
AD
was published in said newspaper 2
times before the return day named therein, such
publications being on the following dates:
FEBRUARY 9, 1997
FEBRUARY 13, 1997
and a newspaper copy of which is hereto attached.
Sworn to and subscribed before me, this 18th
FEBRUARY
97
A.D., 19
day of
/Jftv~\"~
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g ~~y*~\O\ RUTH AYERS
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Notary Public, Guadalupe County, Texas
OFiDINANCENO. 97~T-4
By;th~J~i~ Council of the
City of Schertz, Texas,
adopting guidelines and cri-
teria for Tax Abatement and
Re-investment zones.
Passed, Approved and
Adopted the 4th day of Fe~
bruary, 1997.
Norma Althouse
City Secretary.
..
11 0 Le!, 'I Jotlr:s
ORDINANCE NO. 97-T-4
By the City Council of the
City of Schertz, Texa~,
adoptil'1g guidelin~s and cn-
teria for Tax Abatement and
Re-investment zones.
Passed, Approved and
Adopted the 4th day of Fe-
bruary, 1997. .
Norma Althouse
City Secreta!:,!
PUBLISHER'S AFFIDAVIT
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THE STATE OF TEXAS,
County of Guadalupe
Before me, the undersigned authority, on this date personally appeared L . A. REYNOLDS
known
to me, who, being by me duly sworn, on his oath deposes and says that he is the Publisher of The Seguin
Gazette-Enterprise, a newspaper published in said county; that a copy of the within and foregoing
AD was published in said newspaper 2 times before the return day named therein, such
publications being on the following dates:
J ANIJARY /.4. 1 qcn
JANUARY 30, 1997
and a newspaper copy of which is hereto attached.
Sworn to and subscribed before me, this 31st day of JANUARY
AD., 19 97
..........~Y).~..
!~~;*~''''''.''''~~\ RUTH AYERS
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\,~\, /", J MyCommissionExpiresl2-21-1999
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Notary Public, Guadalupe County, Texas
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11 0 Legal Notices
AN ORDINANCE
By the City Council of the
City of Schertz, Texa~,
adopting guidelines and cn-
teria for Tax Abatement and
Re-investment zones. .
Approved' on First reading
the 21st day of January,
1997.
Norma Althouse
City Secretary
AN ORDINANCE
By the City Council of the '
City of Schertz, Texas,'
adoptirlQJluidel~s and cri-.
teria for Tax Abatement and,
Re-investment Zones.
Approved on First reading
the 21st day of January,
1997.
Norma Althouse
City Secretary