06/15/2006-4A-Agenda Packet-RegularAGENDA
4A Sanger, Texas Industrial Development Corporation
Thursday, June 15, 2006
2:00 P.M. -501 BOLIVAR
1. Call Meeting to Order.
2. Approval of Minutes: May 4, 2006
3. Discuss Possible Infrastructure Assistance to Retail Development in the Downtown
Area.
4. Discuss and Consider Incentive Criteria for the City of Sanger.
5. Discuss Amendments to By-Laws of the Corporation.
6. List of Possible Future Agenda Items.
7. Adjournment.
ting was posted on the bulletin board, at the City Hall
1 to the gen::I public at all times, and said Notice was
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u 11 e tin boa rd on ~lJ.nL-9.f-Q.o;:)1(2.a t
This facility is wheelchair accessible and accessible parking spaces are available. Requests
for accommodations or interpretive services must be made 48 hours prior to this meeting.
Please contact the City Secretary's office at (940) 458-7930 for further information.
MINUTES: 4A SANGER TEXAS INDUSTRIAL DEVELOPMENT CORP.
May 4, 2006
MEMBERS
PRESENT: President Richard Muir, Carroll McNeill, Fred Yeasts, Bill Fuller and Vicki
Jenkins.
OTHERS
PRESENT: Cecile Carson, Economic Development Director and Rose Chavez,
City Secretary/Assistant City Manager
1. President Richard Muir called Meeting to Order.
2. Discuss Goals and Objectives for Economic Development
• Creation of Enterprise Zone
Cecile Carson addressed the Board concerning the development of a master plan
which will have a section on Economic Development.
Ms. Carson focused on the importance of an economic development plan and the ability
of being able to sell our city if an economic development plan existed with a
thoroughfare, utility plan, and a public facility plan. She also advised that the City
does have land use and emphasized that the thoroughfare and utility plan need to be
in place. Ms. Carson also indicated that when she receives calls from prospects it is
difficult to answer their questions without some of these elements in place.
Ms. Carson continued her discussion reading the development of a strategy plan and
importance of goal setting. The survey she presented to the 4A members is to help
assist with the development of economic development strategies. She advised that the
Request for Proposal, will be presented to the City Council on May 15th
•
Ms. Carson indicated that there would be public involvement from citizens. She
indicated she has had several meetings with companies who can do this work at a
reasonable financial level. The time frame to prepare would be about 18 months.
Objective is to identify the needs of the community.
Discussion continued regarding strategies and advantages that could lead to further
growth.
Members expressed strength strategies being as follows:
a. Major thoroughfare in regards to development of commercial property.
b. Demographic proximity to DFW Metroplex.
c. The proximity of being within a 10 to 15 mile radius of two hospitals.
e. Distance of at least 15 miles from Alliance Airport
f. Distance of an estimated 10 to 12 miles from two major Colleges, TWU and
University of North Texas.
g. Razor Development-Denton North
h. Adding Schools Neighborhood
The Board discussed the biggest problems/obstacles for the future growth of the area.
a. Transportation circulation
b. Right of Way dedication process
c. Unknown highway setback on FM 455
d. Belz Rd. to FM 455 connect by high school
e. Grocery
f. Incentive -Job Classifications
Board Members identified and ranked these items in order of importance. Attracting new
industry, expand local industry, retail and commercial development, expand tourism, expand
community services, create a sense of community, promoting service boards, downtown
revitalization, lake related development, create home-grown businesses and entrepreneurial
programs, and develop a land plan/code to promote community interest.
Lengthy discussion followed on the importance of large house developments, amenities to
attract development, golf courses, parks (soccer), swimming pools.
Richard Muir and Board Members discussed the letter from the City Secretary concerning the
salary of the Economic Development Director.
City Secretary advised she needed direction as to the amount funds to transfer to salaries in
the Economic development operating budget. The salary that was budgeted from the 4A was
for an entire budget year; however, Ms. Carson started employment in January of 2006. The
city's fiscal year is October 1, 2005 to September 30, 2006.
Discussion.
Motion made by Richard Muir to allocate on a prorated basis for this year and on
October 1, 2006, to allocate the whole amount.
Seconded by Carroll McNeill. Motion carried unanimously.
3. Ms. Carson recommended another meeting needed to be schedule to discuss status of
reports.
4. President Muir adjourned meeting.
-
Overview
Over the years, the economic development sales tax
has become the backbone of local efforts to bring
new jobs and investment to Texas communities.
The tax was created in 1989 by legislation authored by
State Senator Bill Ratliff of Mount Pleasant to give smaller
Texas communities the financial resources to build effective
economic development programs and offer financial
incentives to attract primary jobs.
As of July 2005, voters in 537 Texas communities have
approved the tax-more than half of which have less
than 5,000 residents. The broader 4B tax continues to be
the more popular choice for Texas communities. As of
July 2005, 318 cities have passed the 48 tax, compared to
122 cities with the 4A tax. Nearly 100 cities impose both
the 4A and 48 tax.
KEY TERMS
The Development Corporation Act of 1979 (DCA}
is the law that regulates the use of the economic
development sales tax. The DCA is found in
Article 5190.6 of Vernon's Civil Statutes. Sections
4A, 48, and 4C of the DCA relate to the economic
development sales tax.
Economic Development Corporations are the
legal entities with the statutory authority to
spend economic development sales tax dollars.
The corporations are city-chartered and
governed by a city-appointed board of directors.
Corporations are typically referred to either as
"4A" or "4B" depending on the type of economic
development sales tax uses approved by local
voters.
Primary Jobs are jobs that infuse new dolfars into
the local economy by creating or selling a product
or service that is ultimately exported to regional,
statewide, national, or international markets.
Recent Changes to the Economic
Development Sales Tax
Economic development is about primary jobs and
wealth creation. That's why the Texas Legislature
passed HB 2912 in 2003. The legislation, which was
supported by the TEDC, eliminated loopholes in the DCA
that enabled Texas communities to use 4A and 4B tax
revenues in ways never envisioned, such as building fire
stations and city halls.
In 2005, Texas lawmakers passed legislation (HB 2928),
which reinserted the loopholes that were eliminated
back in 2003. Although the TEDC remained neutral on
language in HB 2928 that granted small, rural communities
additional flexibility to attract retail development, our
members strongly opposed "carve out" language that
gave certain Dallas-Fort Worth area and border communities
their own set of rules.
Changes affecting communities with
fewer than 20,000 residents
Early supporters of the economic development sales tax
never intended that it be used to support retail development.
Nonetheless, over the years, rural communities have
embraced the economic development sales tax as a tool
to attract retail establishments to their communities.
HB 2928 included language that makes it easier for
economic development corporations created by cities
with less than 20,000 residents to spend 48 revenues on
direct incentives to promote new and expanded business
development. The law requires that cities approve by
resolution, after two separate readings, expenditures of
this nature that exceed $10,000. The new rules enable
these small communities to directly finance retail develop-
ment projects, such as offering cash grants or incentives
to a Walmart store or Red Lobster restaurant. Although
the TEDC does not believe this is the most effective use
of economic development sales tax revenues (because
retail is a secondary economic activity}, we remained
neutral on this provision of HB 2928 because we under-
stand the challenges facing rural Texas communities.
Spec/al Interest Carve-Outs
Perhaps the most potentially damaging aspect of HB
2928 are the various geographic carve-outs. Certain
communities in the border region and the Dallas-Fort
Worth area succeeded in winning language that allows
them to play by their own set of rules. For example:
• Certain "land~ocked" economic development corporations
in Dallas and Harris counties are now authorized to
use 4B revenues to finance direct incentives for retail
development projects. Essentially, the provision
enables a handful of suburban communities to operate
under the rules established to address the needs of
rural Texas.
• Certain economic development corporations near the
border are now authorized to spend 4A and 4B revenues
for the development or expansion of general airport
facilities.
• E<0nomic development corporations in Hidalgo County
are now authorized to spend economic development
sales tax revenues on sewer or solid waste disposal
facilities, airports, and ports.
• Economic development corporations in Hidalgo County
may now issue Industrial Revenue Bonds (IRBs) for
infrastructure projects that do not create primary jobs.
Legislative History
The DCA defines a primary Job as a job that is: (1) avail-
able at a company for which a majority of the products
or services of that company are ultimately exported to
regional, statewide, national, or international markets,
infusing new dollars into the local economy; and (2)
included m one of the following sectors of the North
American Industry Classification System (NAICS).
111 Crop Production
112 Animal Production
113 Forert,y and Logging
11411 Commercial Fishing
115 Support Activities for Agrkulture and
Forestry
211-213 Mining
221 UtHlties
311·339 Manufarturin9
42 Whol~alo Trade
48-49 Transponatlon ,and Warahousing
51 Information. cKCluding movie theate~
(51213) ,1nd drive-In th .. t.,n (512132)
securltle,. Commodity Contract$, and Other
523-525 Finanr.ial Investments and Related Activities:
lmur.!nce Carriers. Related Actlvltl~s; Fund~.
Trusts, and Other Fin,incial Vehicfoi
5413, 5415, 5416, St:len1iflc Rt'.!!learc:h and Development Servlce'ii
5417, and 5419551 Management of Companie, and Entcrprim\
56142 Telephone Call Center, (NEW)
922140 Correctional lnrtltu1ion,;
928110 National Securlt.y tNEW)
Over the past 1 S years. Texas lawmakers have passed dozens of laws pertaining to the economic development sales tax,
One of the most significant changes was the creation of the "4B" tax in 1991, which broadened eligible uses of economic
development sales tax revenues from traditional economic development activities to community development.
·rhe Texas Legislature has amended Section 4A otthe DCA 27 times and Section 4B 36 times. Major legislative changes
to the economic development sales tax statute are presented in the timellne belOVv.
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Differences Between the 4A and 48
Economic Develo_ement Sales Tax.
This practitioners guide offers a quick snapshot of what
you can do with economic development sales tax dol-
lars. It is in no way intended to substitute for the
advice and counsel of your local attorney or the in-depth
training materials you receive at one of the TEDC's
regional training seminars.
14A Eligible Pro/ecU
Land, buildings, equipment, facilities. improvements,
and expenditures related to:
• Manufacturing, industrial, research & development,
recycling, small warehouse and corporate headquarter
facillties, and distribution centers.
• Closed or realigned military bases.
• Job training for primary jobs and commercial/retail.
• Business airport facilities and port-related facilities.
• Clean up of contaminated proIect sites (with a special
election and specific ballot language).
• Projects designed to attract new military missions, prevent
the dosure of existing missions, and redevelop a
dosed or realigned military base.~
• General airport facilities for communities located 25
miles from US/Mexico border only. ~
• 4B projects with voter approval. ,'C
( 48 Ellglble Projects
• Everything authorized under 4A of the DCA, including
retail and commercial projec'ts with the same restrictions,
• Water supply facilities (with a special election and
specific ballot language).
• Projects that improve a community's quality of lite,
including parks, professional and amateur sport and
athletic facilities, tourism and entertainment facilities,
affordable housing, and other improvements or
expenditures that promote new or expanded business
activity that create or retain primary jobs.
• Projects designed to attract new military missions, prevent
the cloSL1re of existing missions, and redevelop a
closed or realigned military base, czm)
• Infrastructure assistance to retail or commercial projects. • Solid waste disposal facilities In Hidalgo County. ~
• Business-related sewer utilities and site
improvements. ~
• Direct incentives for retail development in communities
with fewer than 20,000 residents and certain land-locked
cities in Dallas and Harris counties.
• Beach remediation in Gulf of Mexico communities
required or suitable to promote or develop new or
expanded business enterprises. fE)
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The Economic Development Sales Tax:
Working for Texas
T he economic development sales tax is the state's
largest and most effective local revenue source for
economic development. The best way to protect
the tax for years to come is to use it with caution, care,
and common sense_
The Texas Economic Development Council (TEDC) will
continue to advocate, educate, and inform economic
development professionals on developments related to
the tax, including best practices and statutory changes_
TEDC members will also closely monitor special interests
that have their eye on the tax as a funding source for
local projects that fall outside the scope of economic
development, such as hospitals and community colleges_
Other useful resources on the economic
development sales tax can be found at:
• "Handbook on Economic Development Laws for
Texas Cities," 2004_ This publication, produced by the
Intergovernmental Relations Division of the Office of
the Attorney General, provides a comprehensive legal
and technical overview of major economic develop-
ment laws, including the economic development sales
tax_ The full report can be downloaded from publica-
tions page of the Office of the Attorney General's web
site at www_oag.state.tx.us. Note: This version of the
report does not include changes enacted by the 2005
Texas Legislature.
• "Economic Development Sales Tax," June 2004
(Publication #96-302}. This brochure provides a tech-
nical summary of the economic development sales tax,
including detailed information on how communities
must administer the tax. The brochure can be down-
loaded from the Comptroller's web site under tax
information/tax publications.
The Texas Economic
Development Council
has proudly been
the most vocal and
effective supporter
of the economic
development sales tax
since its creation.
• "Economic Development Corporation Report, Fiscal
Years 2002 and 2003," 2004. This report, published
every two years by the Comptroller of Pubic Accounts,
analyzes expenditures made by 4A and 48 develop-
ment corporations. The report is produced to comply
with legislative reporting requirements established by
HB 1410 in 1999. The full report may be downloaded
from Comptroller's web site at:
http://www_window.state.tx.us/lga/edcr0003/.
• "Texas Economic Development Incentives," March
2003. A special report that includes chapters on the
economic development sales tax and public economic
development corporations. The full report may be
downloaded from the Comptroller's web site at:
http://www.cpa.state.tx.us/specialrpt/ecodev03/.
For more information about the economic development sales tax, contact:
• Carlton Schwab, Texas Economic Development Council
Phone: (512) 480-8432. Email: carlton@texasedc.org
• Bob Bearden, Local Government Assistance Division, Comptroller of Public Accounts
Phone: (512) 463-4289. Email: bob.bearden@cpa.state.tx.us
• Julian Grant, Assistant Attorney General for Municipal Affairs, Office of the Attorney General
Phone: (512) 475-4683. Email: julian.grant@oag.state.tx.us
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Sachse EDC I Incentives ........,
CITY OF SACHSE GUIDELINES AND CRITERIA FOR
THE ECONOMIC DEVELOPMENT INCENTIVES PROGRAM
Tax Abatement and Reinvestment Zone Application (PDF Format)
Section 1 PURPOSE
(a) The City of Sachse is committed to the promotion and retention of high quality development within the City
of Sachse and to better the quality of life for its citizens. These objectives can often be attained by the
enhancement and expansion of the local economy. To meet these objectives, the City of Sachse will, on a case-
by-case basis, consider providing tax abatements or other economic development incentives to aid in the
stimulation of economic development in Sachse. The City of Sachse will give said consideration in accordance
with this Guidelines and Criteria document. Nothing herein shall imply or suggest that the City of Sachse is
under any obligation to provide tax abatements or incentives to any applicant. All applicants shall be considered
on a case-by-case basis.
(b) Participation in an abatement or incentive agreement does not remove any obligation to satisfy all codes
and ordinances issued by the City or any affected taxing jurisdiction that may be in effect and applicable at the
time this project is implemented.
Section 2 DEFINmONS
( !\batement" means the full or partial exemption from ad valorem taxes of certain eligible property in a
R_ ... vestment Zone designated for economic development purposes.
"Agreement" means a contractual agreement between a property owner and/or lessee and an eligible
jurisdiction for the purposes of tax abatement and/or economic development incentives."
(b) "Base Year Value" means the appraised value of the unimproved property as certified by the Appraisal
District as of January 1 of the year in which the tax abatement agreement is executed."
(c) "City" means the City of Sachse, Texas.
(d) "Economic Life" means the number of years a property improvement or tangible personal property is
expected to be in service."
(e) "Eligible Jurisdiction" means the City of Sachse, the Garland Independent School District, the Wylie
Independent School District, Collin County, Dallas County, or other special taxing districts that levy ad valorem
taxes upon and provide services to property located within a proposed or existing reinvestment zone.
(f) "Expansion" means the addition or enlargement of buildings, structures, fixed machinery, or equipment for
purposes of increasing production capacity.
(g) "Facility" means property improvements completed or in the process of construction which together
co"lprise an integral whole.
(h) "Improvement" means a building or structure or expansion or modernization of a building or structure.
(i) "Manufacturing Facility" means buildings and structures including machinery and equipment, the primary
purpose of which is or will be the manufacture of tangible goods or material or the processing of such goods or
materials by physical or chemical change, including the assembly of goods and materials from multiple sources
in order to create a finished or semi-finished product.
(j) "Modernization" means the replacement and upgrading of existing facilities which increases the productivity
input or output, updates the technology or substantially lowers the unit cost of the 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 except as may be
integral to or in direct connection with an existing expansion.
(k) "New Facility" means a property previously undeveloped that is placed into service by means other than or
in conjunction with expansion or modernization.
(I) "Other Basic Industry" means buildings or structures including fixed machinery and equipment not
elsewhere describe. Futhermore, "other basic industries" are any industries, businesses or developments that
the City Council deams appropriate and that are used for the production of products or services which result in
the creation of new permanent jobs and create new wealth in the City.
(m) "Project" means any property improvement including expansions, modernization, and new facilities; but
excluding any deferred maintenance.
(n 1 'Regional Distribution Center Facility" means buildings and structures, including machinery and equipment,
used primarily to receive, store, service, or distribute goods or materials owned by the facility operator where a
majority of the revenues generated by activity at the facility are derived from outside Dallas County.
(o) "Regional Entertainment/Tourism Facility" means buildings and structures, including machinery and
equipment, used or to be used to provide entertainment and/or tourism related services, from which a majority
of revenues generated by activity at the facility are derived from outside Sachse.
(p) "Retail Facility" means buildings and structures including fixed machinery and equipment, used or to be
used to provide retail sales and services.
(q) "Regional Service Facility" means buildings and structures, including machinery and equipment, used or to
be used to provide services from which a majority of revenues generated by activity at the facility are derived
from outside of Sachse.
(r) "Reinvestment Zone" means any area of the City that has been designated a reinvestment zone for tax
abatement purposes and which is located within the taxing jurisdiction of the City. It is the intent of the City to
designate reinvestment zones on a case-by-case basis in order to maximize the potential incentives for eligible
enterprises to locate or expand in the City.
(s) "Research Facility" means buildings and structures including fixed machine~ and equipment, u~ed or to be
used primarily for research or experimentation to improve or develop new tangible goods or materials or to
improve or develop the production processes thereto.
cAangible Personal Property" means personal property owned or leased by the applicant, excluding supplies
and inventory which is added to the land after the execution of a tax abatement agreement. 0
SECTION 3 ABATEMENT AUTHORIZED
(a) Authorized Facility. A facility may be eligible for abatement if it is a:
· Retail Facility,
· Manufacturing Facility,
· Research Facility,
· Regional Distribution Center Facility,
· Regional Service Facility,
· Regional Entertainment/Tourism Facility, or
· Other Basic Industry.
(b) Authorized Date. A facility shall be eligible for tax abatement if it has applied for such abatement prior to
the commencement of construction, provided that such facility meets the criteria granting tax abatement in
reinvestment zones created in the City of Sachse pursuant to the guidelines and criteria adopted by the City
Council.
(c) Creation of New Value. Abatement may only be granted for the additional value of eligible property
improvements made subsequent to and listed in an abatement agreement between the City of Sachse and the
property owner and/or lessee, subject to such limitations as the City Council may require.
(d) New and Existing Facilities. Abatement may be granted to new facilities and improvements to existing
facilities for purposes of modernization and expansion.
(e, ... ligible Property. Abatement may be extended to the value of buildings, structures, fixed machinery and
equipment, site improvements plus that office space and related fixed improvements necessary to the
operation and administration of the facility.
(f) Ineligible Property. The following classes of property shall be fully taxable and ineligible for abatement: land,
inventories, supplies, furnishings or other forms of moveable personal property, vehicles, deferred maintenance
investments, residential property, property that is associated with any activity that is illegal under federal,
state, or local law, property owned or used by the State of Texas or its political subdivisions, or property owned
by an organization which is owned, operated or directed by a political subdivision of the State of Texas.
(g) Leased Facilities. If an authorized facility eligible for tax abatement is leased, the agreement shall be
executed with both the lessor and the lessee.
(h) Value and Term of Abatement. Abatement shall be granted commencing with January 1 of the calendar
year immediately following the issuance of a certificate of occupancy unless otherwise provided in the
Agreement. The amount of value or percentage of value and the term of abatement on new eligible property
shall be determined as follows:
(1) The value of the abatement shall not exceed 700 percent of investment by the business in eligible property
described in Section 3(e), above, or such other value as permitted by law. The City Manager, or their
designated representative, shall work with the applicant, prior to the execution of an abatement agreement, to
determine the exact schedule for the abatement.
(?..Jnder no circumstances shall the value of abatement exceed 100 percent of the value of eligible property in
aWgle year, and the duration of an abatement agreement shall not exceed 10 years or one-half (1/2) the
ern'1omic life of the property, whichever is less.
(i) Economic Qualification. In order to be eligible to receive tax abatement the applicant must meet the
following qualifications:
(1) For a new facility (with the exception of a retail or regional entertainment/tourism facility), be reasonably
expected to invest not less than two million dollars ($2,000,000) in the facility (including both eligible and
ineligible property) within three years from the commencement of construction and be expected to create
employment for not less than 10 persons associated with the production of goods and services at the
authorized facility on a full-time permanent basis in the City of Sachse.
(2) For an expanded or modernized facility, be reasonably expected to invest not less than three hundred fifty
thousand dollars ($350,000) in the facility (including both eligible and ineligible property) within three years
from the commencement of construction and be expected to create or retain employment for not less than 10
persons associated with the production of goods and services at the authorized facility on a full-time permanent
basis in the City of Sachse.
(3) For retail and regional entertainment/tourism facilities, be reasonably expected to invest not less than
seven hundred fifty dollars ($750,000) in the facility (including both eligible and ineligible property) within
three years from the commencement of construction and be expected to create employment for not less than 5
persons associated with the production of goods and services at the authorized facility on a full-time permanent
basis in the City of Sachse.
(4) Two or more part-time, permanent employees totaling an average of not less than 40 hours per week may
be considered as one full-time, permanent employee.
(-, _ompanies seeking to qualify for tax abatement on the basis of job retention shall document that without
the creation of a reinvestment zone and/or tax abatement, the company will either reduce or cease operation.
(6) Not be expected to solely and primarily have the effect of transferring employment from one part of the
City of Sachse to another.
(j) Taxability. From the execution of the abatement agreement to the end of the agreement period, taxes shall
be payable as follows:
(1) The value of ineligible property as provided in Section 3(f), above, shall be fully taxable,
(2) The base year value of existing eligible property as determined each year shall be fully taxable, and
(3) The additional value of new eligible property shall be taxable in the manner described in Section 3(h),
above.
(k) Conflict of Interest: Property that is in a reinvestment zone and that is owned or leased by a member of the
City Council of the City of Sachse or the Planning and Zoning Commission of the City of Sachse shall be
ineligible for property tax abatement pursuant to Section 312.204(d) of the Texas Tax Code. Members of the
Sachse Economic Development Corporation Board of Directors are also ineligible for property tax abatements
under this policy.
Section 4 APPLICATION
( .ny present or potential property owner of taxable property in Sachse may request the creation of a
reinvestment zone and tax abatement by filing a written request with the City Manager or his/her designated
r sentative.
(b) The application shall consist of a completed application form accompanied by the following:
(1) A general written description of the proposed use and the general nature and extent of the modernization,
expansion, or new improvements to be undertaken,
(2) A descriptive list of the improvements that will be part of the facility,
(3) A map and property description,
( 4) A time schedule for undertaking and completing the planned improvements,
(5) Such financial and other information as deemed appropriate by the City Manager for purposes of evaluating
the application.
(6) The name, address and phone number of the owner of the real property, the contemplated improvements,
any tangible personal property to be added and any lessee, if applicable, and the type of legal entity if other
than an individual."
(c) Upon receipt of a completed application, the City Manager shall notify, in writing, the presiding officer of the
governing body of each affected jurisdiction. Before acting upon the application, the City Council shall, through
public hearing, afford the applicant and the general public opportunity to show cause why the abatement
shnuld or should not be granted. Notice of the public hearing shall be clearly identified on a City Council Agenda
ti posted in accordance with the Texas Property Redevelopment and Tax Abatement Act and the Texas
Open Meetings Act.
(d) After receipt of an application for creation of a reinvestment zone and application for tax abatement, the
Sachse Economic Development Corporation and the City of Sachse, shall prepare a feasibility study setting out
the impact of the proposed reinvestment zone and tax abatement. The feasibility study shall include, but not be
limited to, an estimate of the economic effect of the creation of the zone and the abatement of taxes and the
cost/benefit to the City and other affected jurisdictions. The Sachse Economic Development Corporation will
then make a formal recommendation to the City of Sachse City Council.
(e) A request for a reinvestment zone for the purpose of tax abatement shall not be granted if the City Council
finds that the request for abatement was filed after the commencement of construction, alteration, or
installation of improvements related to a proposed expansion, modernization, or new facility authorized as
eligible under these guidelines.
(f) Variance. Request for variance from provisions of these guidelines may be made in written form to the City
Manager, or his/her designated representative. Such request shall include a complete description of the
circumstances explaining why the applicant should be granted a variance. The approval of a request for a
variance to any of the Guidelines and Criteria set forth herein shall require a majority vote of the City Council
and shall be reflected in the tax abatement approved thereby.
Section 5 PUBLIC HEARING
(a) Should any affected jurisdiction be able to show cause in the public hearing why the grant of abatement will
h. a substantial adverse affect on its bonds, tax revenue, service capacity, or the provision of services, that
s ing shall be reason for the City to deny any designation of the reinvestment zone, the grant of abatement,
or hoth.
(b) Neither a reinvestment zone nor an abatement agreement shall be authorized if it is determined that:
(1) There would be a substantial adverse effect on the provision of government services or tax base,
(2) The applicant has insufficient financial capacity,
(3) Planned or potential use of the property would constitute a hazard to public safety, health or morals, or
( 4) Planned or potential use of the property violates other codes or laws.
Section 6
AGREEMENT
(a) After approval, the City shall formally pass a resolution and execute an agreement with the owner of the
facility and/or lessee, which shall include the following:
(1) Estimated value to be abated and the base year value,
(2) Percent of value to be abated each year as provided for in Section 3(h), above,
(3) The commencement and termination dates of the abatement,
( .. 71e proposed use of the facility, nature of the construction, time schedule for construction and
c nencement of operations, map, property description, and improvements as listed in the application under
Section 4(b), above.
(5) Contractual obligations in the event of default, violation of terms and conditions, delinquent taxes,
recapture, administration and assignment as provided for in Section 3(a), 3(g), 3(h), 7, 8, and 9 or other
provisions that may be required for uniformity or by state law, and
(6) Amount of investment in, and average number of jobs associated with, the facility during the abatement
period.
(b) Such agreement shall normally be executed within 60 days after the applicant has forwarded all necessary
information and documentation for evaluation of the application to the City.
Section 7 RECAPTURE
(a) Should the City determine that the company or individual is in default according to the terms and conditions
of the abatement agreement, the City shall notify the company or individual, in writing, at the address stated in
the agreement, and if such non-compliance is not resolved within sixty (60) days from the date of such notice,
then the agreement shall be terminated.
(b) In the event that the company or individual:
(1) Allows its ad valorem taxes owed the City or other affected jurisdiction to become delinquent and fails to
tir""'ly and properly follow the legal procedures for their protest and/or contest, or
(2\ Violates any of the terms and conditions of the abatement agreement and fails to resolve such violations
\ ·n sixty (60) days from the date of written notice of such violations.
the agreement then may be terminated and all taxes previously abated by virtue of the agreement will be
recaptured and paid within sixty (60) days of the termination.
Section 8 ADMINISTRATION
(a) The Chief Appraiser of the appraisal district in which the eligible property is located shall, determine the
appraised value of the real and tangible personal property located in the reinvestment zone. Each year, the
company or individual receiving the tax abatement shall furnish the City and the Chief Appraiser with such
information as may be necessary to determine the eligibility and continuation of abatement including the
number of new and/or retained employees associated with the facility."
(b) The agreement shall stipulate that employees and/or designated representatives of the City will have access
to the reinvestment zone during the term of the abatement agreement to inspect the facility to determine if the
company or individual is in compliance with the terms and conditions of the abatement agreement. All
inspections will be made only after notification of not less than twenty four (24) hours and will only be
conducted in such a manner as not to unreasonably interfere with the construction and/or operation of the
facility. All inspections will be made with one or more representatives of the company or individual present and
in accordance with the company's safety standards.
(c) Upon completion of construction, the City shall annually evaluate each facility receiving abatement to
ensure compliance with the agreement and report possible violations to the City Council and City Attorney.
(, II proprietary information required by the City for purposes of monitoring compliance by a company with
tl. __ erms and conditions of an abatement agreement shall be considered confidential as allowed by law.
Section 9 ASSIGNMENT
(a) Abatement may be transferred and assigned by the holder to a new owner or lessee of the same facility
upon the approval by resolution of the City Council subject to the financial capacity of the assignee and
provided that all conditions and obligations in the abatement agreement are guaranteed by the execution of a
new contractual agreement with the City of Sachse.
(b) The expiration date of the new contractual agreement shall not exceed the termination date of the
abatement agreement with the original owner and/or lessee.
( c) No assignment or transfer shall be approved if the parties to the existing agreement, or the new owner or
new lessee are liable to the City of Sachse or any affected taxing jurisdiction for outstanding taxes or other
obligations.
Section 10 OTHER ECONOMIC DEVELOPMENT INCENTIVES
(a) Economic Development Incentives. The City by resolution may enter into an economic devel~pmen~
incentive agreement as permitted by Chapter 380.001 of the Texas Local Government Code. An incentive may
include but is not limited to:
(1) Loans and Grants. The City may provide subsidized loans or grants upon approval of the City Council.
(: rovide Personnel. The City may provide personnel and services of the municipality upon approval of the
Citv Council.
(3) Waiver of Fees. Permit application, utility tap, impact fees and similar fees may be waived upon approval of
the City Council.
(4) Infrastructure. Extension, construction or reconstruction of infrastructure necessary for the development of
a targeted enterprise may be made upon approval of the City Council.
(b) Any agreement will include, but not be limited to, the following specific items:
(1) All appropriate stipulations included in the application, as outlined by the document, for an economic
development incentive agreement,
(2) The amount and type of incentive,
(3) A method for determining the qualifications of meeting the criteria and applicant's promise to meet and
maintain these qualifications over the term of the agreement. This may require the submission of an annual
report to the City Manager demonstrating that the terms and conditions required to receive an incentive have
been met, and the City will be allowed, upon written request and reasonable notice, to inspect and audit such
records of the applicant as are necessary to substantiate that the applicant is meeting the criteria agreed upon
during the term of the incentive,
(4) A provision for recapturing City expenditures and/or cost of labor associated with the agreement, in the
event the company or individual is found to be in default according to the terms and conditions of the incentive
agreement.
(SJ All proprietary information required by the City for purposes of monitoring compliance by a company with
the terms and conditions of an incentive agreement shall be considered confidential.
Section 11 SEVER ABILITY AND LIMITATION
In the event that any section, clause, sentence, paragraph, or any part of these Guidelines and Criteria shall,
for any reason, be adjudged by any court of competent jurisdiction to be invalid such invalidity shall not affect,
impair, or invalidate the remainder of these Guidelines and Criteria.
Incentives -Denison Development Alliance -Denison, Texas Page 1 of2
lncentives
Retail
Sales_Ta_x
Sales tax rebates may be available to qualified retailers. The rebate escalates based on a retailer's sales and
location.
Ad Valorem Tax Reb.ilJes
City property tax rebates may be available to qualified retailers. Depending on a development's size and location,
these rebates can range from 5 to 10 years.
Infrastructure Support
Funds may be available for the installation or improvement of water, sewer, gas, and electric lines.
Skills Develoi:tm~t Fund
This state fund provides grants to community and technical colleges to finance customized job training for local
businesses. Average training cost in $1,000 per trainee.
Revolving Loan Program
The Denison Community Investment Corporation has funds available that can be loaned to businesses for the
acquisition of property or equipment. Rates can be as low as three and a half percent below national prime and
terms can be up to ten years.
lndust~
Cash Grants
Incentive packages are based on the number, quality of jobs created and/or capital investment. Incentives usually
take the form of cash grants to the company spread over a two to five year period, depending on the total amount
of the grant. In the past, grants have ranged from $500 to $5,000 per job, depending on the type of job. A
company which qualifies for a cash grant package employing 200 people at $5,000 per job would receive a total
of $1 million in incentives payable over an agreed upon term.
Ad Valorem Tax Abatements
The city, county and college districts have a strong track record of tax abatement participation on new building
and equipment. Local Governments can enter into agreements with businesses to abate local Ad Valorem taxes
on real and personal property for up to ten years.
Freep_ort Exemption
All taxing entities, the City of Denison, Grayson County, Grayson County College and the Denison Independent
School District offer a freeport inventory tax exemption which exempts certain personal property from property
taxes. Freeport goods are defined as, "goods, wares, merchandise, other tangible property ... are exempt from ad
valorem taxation if: (1) the property is acquired in or imported into this State to be forwarded outside this State ...
(2) the property is detained in this State for assembling, storing, manufacturing, processing, or fabrication
purposes ... and (3) the property is transported outside this State not later than 175 days after the date the person
acquired or imported the property in this State."
http://www.denisontx.com/business/incentives.htm 5/17/2006
Incentives -Denison Development Alliance -Denison, Texas Page 2 of2
Foreign Trade Zone
Denison is served by Foreign Trade Zone #39. The zone is comprised of 18 acres located at the Grayson County
Airport, four miles west of Denison. Businesses engaged in international trade within this zone benefit from
special customs procedures when exporting and warehousing, manufacturing or assembling goods within the
designated areas.
Industrial Revenue Bonds
Denison can issue tax-exempt bonds to finance land and depreciable property for manufacturing facilities. The
maximum bond amount is ten million for tax-exempt issues.
Revolving Loan Program
The Denison Community Investment Corporation has one million dollars available that can be loaned to
businesses for the acquisition of property or equipment. Rates can be as low as three and a half percent below
national prime and terms can be up to ten years.
Skills DevelopJ11ent Fund
This state fund provides grants to community and technical colleges to finance customized job training for local
businesses.
Industrial Property
The Denison Development Alliance owns and manages two industrial parks. Sites in the park are available for
free or below market rates for qualified businesses. The land is valued at $10,000 per acre.
Infrastructure Improvements
Funds are available for the installation or improvement of water and sewer lines and access roads.
Relocation\Moving ExpJ;tnses
Denison may pay for a portion of moving costs incurred when a business relocates or expands to Denison. Funds
are also available to established industries that move new equipment to their Denison location.
utilities I tax_e_s_Linsurance I incentives I home
Denison Development Alliance
311 West Woodard Street
Denison, TX 75020
(903) 464-0883 * (888) 244-1908 phone
(903) 465-6476 fax
ssmather~@denisontx.org e-mail
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