ORD 1991-25 - Adopting The Tax Policy 08-20-1991ORDINANCE NO 91-25
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS, ADOPTING A TAX ABATEMENT POLICY.
Be it ordained by the City Council of the City of Huntsville, Texas, that:
The City of Huntsville adopts this "TAX ABATEMENT POLICY":
1.
POLICY BASIS
The City of Huntsville recognizes the need for greater economic development
within the City and its extraterritorial jurisdiction, expanding existing
industry, diversifying the economic base, and creating new jobs. In this regard,
the City of Huntsville adopts a Tax Abatement Policy that will encourage growth
to qualified property owners. This Tax Abatement Policy shall apply to approved
present or potential owners of taxable property in the City, who: (1) own or are
in the process of acquiring eligible real property in a Reinvestment Zone
approved by the City; (2) are willing to execute tax abatement agreements on
real property improvement and development designed to provide benefit to the
eligible property and to utilize area contractors and work force to the maximum
extent feasible; and (3) are operators of new or modernized manufacturing,
research, distribution, service, administrative, corporate or other business or
industry facilities on the subject real property.
APPLICATION
Any present or potential taxable property owner in the City or its
extraterritorial jurisdiction may request a tax abatement on particular real
property improvements within a Reinvestment Zone by submitting a written request
to the City Manager. The application shall be on form approved by the Council
and shall include: (1) a general description of the proposed use and the general
nature and extent of the proposed improvements; (2) an estimate of the number
of jobs which will be created by the proposed improvements; (3) a time schedule
for undertaking and completing construction of the proposed improvement; (4) a
statement of the assessed values of the property, separately stated for real and
personal property, for the then current tax year; (5) a financial statement of
each applicant showing financial capacity to complete the proposed improvement;
and (6) a profile of each of the individual applicant(s) or its officers and
directors.
Each tax abatement application will be individually reviewed by the City Council
and approved or disapproved based on the merits of the application and the
guidelines and criteria set forth herein. In addition, in its discretion, the
City Council may appoint a Tax Abatement Review Board including residents of
major taxing entities within the City, to review and make suggested
recommendations to the Council regarding each application.
The City, upon the sole approval of the Council, shall by resolution either
approve or disapprove each application for tax abatement. The City Manager shall
notify the applicant of approval or disapproval. Any disapproved applicant may
re -apply for tax abatement.
The City Manager shall notify in writing the presiding officer of the governing
body of each affected taxing jurisdiction of the receipt of an application, and
effort shall be made to coordinate the requested tax abatement with such other
taxing jurisdictions, if the abatement is approved by the City Council.
III.
GUIDELINES AND CRITERIA
Before approving an application for tax abatement, the City Council must
determine that the proposed improvements meet the following guidelines and
criteria:
A. The proposed abatement will support economic development by expanding
existing business or industry, diversifying the economic base of the City,
creating new jobs, and /or substantially increasing City tax revenue after
the abatement period ends.
B. The proposed tax abatement shall not have a substantially adverse effect
on City tax base or City budget.
C. The proposed improvements and use shall not be adverse to public health,
safety or welfare.
D. Abatement shall only be granted for the additional value resulting from
proposed improvements to eligible property constructed after January 1 of
the year in which the tax abatement is granted by official action of City
Council.
E. Abatement shall be extended only to the improved value of land, building,
structures, fixed machinery and equipment and site improvement.
F. Abatement shall not be granted for any property on which total or partial
ad valorem tax exemption or devaluation currently applies, or is granted
during the term of tax abatement. Granting of total or partial ad valorem
tax exemption or devaluation to any part of the property during the tax
abatement period shall cancel any and all tax abatement on the property,
and render the terms of any tax abatement agreement on the property null
and void.
IV.
DISCRETIONARY CONSIDERATION
The following matters should be considered by the City Council in its
discretionary approval or disapproval of each tax abatement application:
A. The proposed project should increase City property valuations at least
$1,000,000.00.
B. The proposed improvement should create a minimum of 15 new permanent jobs
in the City upon opening for business, and should promote further
employment in the City; or should increase City property valuations
substantially over the minimum $1,000,000.00.
C. Tax abatement will normally be considered for manufacturing or
distribution facilities, corporate office, research parks, or similar
facilities, if it can be demonstrated that their development would create
substantial capital improvements or jobs. Generally, tax abatement is not
designed to encourage speculative office development, retail development,
or other service industries that market primarily in Walker County.
D. The proposed improvement should not have the sole or primary effect of
transferring employment from one part of the City to another.
E. Non compliance with this policy shall cause the applicant(s) to repay the
taxes abated as per the signed agreement.
V.
TAX ABATEMENT PLAN
Tax abatement shall be granted effective with the January 1 valuation date
immediately following the date of completion of improvements. Taxes on
improvements shall be abated according to the following schedule:
Year of Abatement Percentage of Taxes Abated
First Up to 100%
Second Up to 100%
Third Up to 100%
Fourth Up to 80%
Fifth Up to 60%
Sixth Up to 40%
Seventh Up to 20%
Eighth and following no abatement
Additionally, one hundred percent (100%) of the value of eligible improvements
shall be abated for up to two (2) years during the period of construction of such
improvement. Upon completion of improvements, as determined solely by the City
Council, the abatement period shall begin as set forth above. If the period of
construction exceeds two (2) years or other designated construction period,
whichever is less, improvements shall be considered completed for purposes of
beginning the abatement period.
VI.
AGREEMENT
After approval and resolution, the City, through the City Manager, shall execute
an agreement with the present or potential property owner on standard form as
approved by the City Attorney's office. All tax abatement agreements shall be
in writing, and conform to the provisions of Chapter 312 of the Texas Tax Code.
VII.
SUNSET PROVISION
This-policy is effective as of &290,5-74,R016 , 1991, and will remain in
force until qq�s� dCjih , 1993, at which time all reinvestments
zones and tax abatement contracts created by City Council will be reviewed by the
City Council to determine whether the goals have been achieved, and whether the
policy should be continued.
PASSED AND APPROVED this 207/7day of
ATTEST:
haw City ecretary
APPROVED:
s, City At orney
CITY OF HUNTSVILLE
1991.
W. H. Hod es, or