HomeMy WebLinkAbout023869 RES - 12/14/1999RESOLUTION
RATIFYING THE GUIDELINES AND CRITERIA FOR
AUTHORIZING TEMPORARY TAX ABATEMENT
AND AUTHORIZING THE EXECUTION OF AN
AGREEMENT WITH GULF COAST ENTERTAIN-
MENT L.L.C. PROVIDING FOR TEMPORARY
PROPERTY TAX ABATEMENT
WHEREAS, the Texas Property Redevelopment and Tax Abatement Act (the "Act"),
Texas Tax Code, Chapter 312, as amended, authorizes the City of Corpus Christi (the "City") to
enter into Tax Abatement Agreements for projects meeting the guidelines and criteria for granting
tax abatement, as amended, duly adopted by the City; and
WHEREAS, the City desires to ratify its Guidelines and Criteria for Granting Tax
Abatement since the Act provides that the guidelines and criteria only remain in effect for a two-
year period; and
WHEREAS, an application for temporary tax abatement has been filed with the City by
Gulf Coast Entertainment, L.L.C. for the construction of a new Facility in the City; and
WHEREAS, the enterprise zone in the City includes the property to be covered by the
proposed tax abatement agreement and is eligible for such treatment in accordance with the
provisions of the Act;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS THAT:
1. The City finds and determines that the Guidelines and Criteria for Granting Temporary
Tax Abatement in the form attached as Exhibit A are ratified and confirmed as being the
guidelines and criteria for granting abatement as required under the Act.
2. The City finds and determines that the terms of the proposed tax abatement agreement
and the property subject to the proposed agreement meet the applicable guidelines and criteria,
and the City further determines that the proposed project is feasible and the proposed temporary
abatement of taxes will inure to the long term benefit of the City.
3. The execution of the Tax Abatement Agreement attached in substantial form as Exhibit
B is hereby authorized and approved.
F:\I 1\ABATE\Reso-Oulf Coast. doc
021869
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DULY adopted at a regular meeting of the City Council of the City on the 14th day of
December, 1999.
ATTEST:
CITY OF CORPUS CHRISTI, TEXAS
Armando Chapa, City Secretary Samuel L. eal, Mayor
APPROVED AS TO FORM:
December CI
, 1999
By: . 12
James . Bray, City Attoey
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The above resolution was passed by the following vote:
Samuel L. Neal, Jr.
Javier D. Colmenero
Melody Cooper
Henry Garrett
Dr. Arnold Gonzales
Rex A. Kinnison
Betty Jean Longoria
John Longoria
Mark Scott
023869
CORPUS CHRISTI
December 1999
GUIDELINES AND CRITERIA
FOR GRANTING TAX ABATEMENT
WHEREAS, the attraction of long-term investment and the establishment of new jobs in the area
would enhance the economic base of area taxing entities; and
WHEREAS, Corpus Christi must compete with other communities across the nation currently
offering tax inducements to attract new plant and modernization projects, and studies have shown that a
favorable local tax climate and start-up tax concessions rank second on the list of priorities for new
plant installations or expansions; and
WHEREAS, tax abatement is one of the principal means by which the public sector and the
private sector can forge a partnership to promote real economic growth within a community; and
WHEREAS, any tax incentives offered must be strictly limited in application to those new and
existing industries that bring new wealth to the community in order to avoid reducing the needed tax
revenues of area taxing entities; and
WHEREAS, the Property Redevelopment and Tax Abatement Act (the "Act"), Chapter 312 of
the Texas Tax Code authorizes counties, cities and school districts to provide property tax abatement
for limited periods of time as an inducement for the development or redevelopment of a property; and
WHEREAS, the Act requires eligible taxing jurisdictions to establish Guidelines and Criteria as
to eligibility for tax abatement agreements prior to granting any future tax abatement, said Guidelines
and Criteria to be unchanged for a two-year period unless amended by a three-fourths vote; and
WHEREAS, to assure a common, coordinated effort to promote economic development, these
Guidelines and Criteria have been circulated among Nueces County, the City of Corpus Christi and
other governmental entities for consideration as a common policy for all jurisdictions which choose to
participate in tax abatement agreements;
NOW, THEREFORE, BE IT RESOLVED by the City of Corpus Christi that these Guidelines
and Criteria for granting tax abatement be adopted:
Section 1. Definitions.
(a) "Abatement" means the temporary, full or partial exemption from ad valorem taxes of certain
added value to real and personal property in a zone designated for economic development
purposes pursuant to the Act.
(b) "Added Value" means the increase in the assessed value of an eligible property as a result of
"expansion" or "modernization" of an existing facility or construction of a "new facility." It does
not mean or include "deferred maintenance."
(c) "Agreement" means a contractual agreement between a property owner and/or lessee and an
Eligible jurisdiction for the purposes of tax abatement.
(d) "Base Year Value" means the assessed value of eligible property as of the January 1 preceding
the execution of an Agreement plus the agreed upon value of eligible property improvements
made after January 1 but before the execution of the Agreement.
Exhibit A
CORPUS CHRISTI
December 1999
(e) "Basic Manufacturing or Service Facility" means buildings and structures, including fixed
machinery and equipment not elsewhere described, used or to be used for the production of
products or services which derive a majority of revenue from points beyond a 50 -mile radius of
Nueces County.
"Deferred Maintenance" means improvements necessary for continued operations which do not
improve productivity or alter the process technology.
"Economic Lif@" means the number of years a property improvement is expected to be in service
in a Facility.
"Eligible Jurisdiction" means the City of Corpus Christi, Nueces County and any municipality or
school district, the majority of which is located in Nueces County, that levies ad valorem taxes
upon and provides services to property located within the proposed or existing zone designated
pursuant to the Act.
"Expansion" means the addition of buildings, structures, fixed machinery or equipment for the
purposes of increasing capacity.
"Facility" means property improvements completed or in the process of construction which
together compromise an integral whole.
"Modernization" means the replacement and upgrading of existing facilities which increase the
productive input or output, updates the technology or substantially lowers the unit cost of the
operation, and extends the economic life of the facilities. 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, repairing or completion of deferred
maintenance.
"New Facility" means a property previously undeveloped which is placed into service by means
other than or in conjunction with an expansion or modernization.
"Owner" means the owner of a Facility subject to abatement. If the Facility is constructed on a
leased property, the owner shall be the party which owns the property subject to tax abatement.
The other party to the lease shall join in the execution of Agreement but shall not be obligated to
assure performance of the party receiving abatement.
(n) "Petrochemical Facility" means buildings and structures, including fixed machinery and
equipment, the primary purpose of which is or will be the manufacture or processing of
petrochemicals or fuels by physical or chemical change.
(o) "Regional Distribution Center Facility" means buildings and structures, including fixed
machinery and equipment, used or to be used primarily to receive, store, service or distribute
goods or materials owned by the Facility operator where a majority of the goods or services are
distributed to points beyond a 50 -mile radius of Nueces County.
(p) "Regional Telecommunications/Data Processing Center Facility" means buildings and structures
used or to be used primarily for the provision of telecommunication or data processing services
by the Facility operator where a majority of the services are provided to points beyond a 50 -mile
radius of Nueces County.
(q) "Regional Visitor/Amusement Facility" means buildings and structures used or to be used
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CORPUS CHRISTI
December 1999
primarily as a stadium, arena, amusement park or similar attraction or sports venue.
(r) "Enterprise Zone Residential Redevelopment Facility" means buildings and structures used or to
be used primarily for residential purposes and which are located within an enterprise zone.
Section 2. Abatement Authorized.
(a) Authorized Facilities. A Facility may be eligible for abatement if it is a Basic Manufacturing or
Service Facility, Regional Distribution Center Facility, Regional Telecommunications/Data
Processing Center Facility, Regional Visitor/Amusement Facility, Enterprise Zone Residential
Redevelopment Facility or Petrochemical Facility. Abatement may be granted for new facilities
and improvements to existing facilities for the purpose of modernization or expansion.
(b) Creation of New Value. Abatement may only be granted for the additional value of eligible
property improvements made subject to and listed in an abatement Agreement between the
Eligible jurisdiction and the property owner and lessee (if required), subject to such limitations as
said jurisdiction may require. The economic life of the improvements must exceed the term of
the abatement Agreement.
(c)
Eligible Property. Abatement may be extended to the value of the improvements to real
property, including buildings, structures, fixed machinery and equipment, and site improvements,
plus that office space and related fixed improvements necessary to the operation and
administration of the Facility.
(d) Jneligible Property. The following types of property shall be fully taxable and ineligible for
abatement: land; inventories; supplies; tools; furnishings and other forms of movable personal
property; vehicles; vessels; aircraft; housing; hotel accommodations; deferred maintenance
investments; property to be rented or leased except as provided in Section 2(e); improvements for
the generation or transmission of electrical energy not wholly consumed by a New Facility or
expansion; any improvements, including those to produce, store or distribute natural gas, fluids
or gases, which are not integral to the operation of the Facility; improvements to real property
which have an economic life of less than 15 years; property owned or used by the State of Texas
or its political subdivisions or by any organization owned, operated or directed by a political
subdivision of the State of Texas; unless any of the above types of property are specifically
authorized by the Eligible jurisdiction.
(e) Period of Abatement. Abatement shall be granted effective with the January 1 valuation date
immediately following the date of execution of the Agreement. Abatement shall be allowed for a
period of five years following the completion of construction. If the period of construction
exceeds two years, the Facility shall be considered completed for purposes of abatement and in
no case shall the period of abatement, inclusive of the construction period exceed seven years.
(0 Completion of Construction. The completion of construction shall be deemed to occur upon the
earliest of the following events:
(1) when a certificate of occupancy is issued for the project (if it is located within a city),
(2) when commercial production of a product or provision of a service is achieved at the
Facility,
(3) when the architect or engineer supervising construction issues a certificate of substantial
completion, or some similar instrument, or
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(g)
CORPUS CHRISTI
December 1999
(4) two (2) years after the date of the Agreement.
The above determination shall be made by the Eligible jurisdiction offering the abatement, in its
sole and absolute discretion, based upon the above criteria and such other factors as the
jurisdiction may deem relevant. The determination of the completion of construction shall be
conclusive, and any judicial review of such determination shall be governed by the substantial
evidence rule.
Abatement Percentage. For a Facility which provides not less than 50 (but not more than 99)
new permanent jobs, the percentage of tax abated shall be in accordance with the following
schedule:
YS. Percentage of Abatement
Construction Period 100%
(not to exceed 2 years)
Year 1 50%
Year 2 50%
Year 3 50%
Year 4 50%
Year 5 50%
Provided that, for a Facility which provides not less than 100 (but not more than 199) new
permanent jobs, the percentage of tax abatement shall be in accordance with the following
schedule:
Year
Percentage of Abatement Percentage of Abatement
(for first $10 million) (over $10 million)
Construction Period 100% 100%
(not to exceed 2 years)
Year 1 75% 50%
Year 2 75% 50%
Year 3 75% 50%
Year 4 75% 50%
Year 5 75% 50%
Provided that, for a Facility which provides at least 200 new permanent jobs, the percentage of
tax abatement shall be in accordance with the following schedule:
itff
Percentage of Abatement Percentage of Abatement
(for first $10 million) (over $10 million)
Construction Period 100% 100%
(not to exceed 2 years)
Year 1 100% 50%
Year 2 100% 50%
Year 3 100% 50%
Year 4 100% 50%
Year 5 100% 50%
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CORPUS CHRISTI
December 1999
In the event the Added Value caused by the Project is less than $2.0 million, no abatement shall
be granted unless the Facility is a Rehabilitation Project as described in Section 2 (h).
In order to be counted as a permanent job under these Guidelines, the job must be a full-time
position providing regular work schedules of at least 35 hours per week. For compliance
purposes, the determination date shall be January 1 of each year commencing with the January 1
following the date of completion of construction. The percentage of abatement provided each
year under the Agreement shall be based upon the employment information as of January 1 of
such year. As a result, the actual amount of abatement may vary from year to year based upon
employment levels and property valuations.
For example, Company A has an abatement Agreement entered 5/1/95 and projects to create 250
permanent jobs. If the actual experience of Company A involves fluctuating job levels, the actual
abatement under the Agreement could follow the following pattern:
YeaU Employment Abatement (First $10mm) Abatement (Over $10mm1
1/1/96* 0 100% 100%
1/1/97* 0 100% 100%
1/1/98 150 75% 75%
1/1/99 250 100% 75%
1/1/00 150 75% 50%
1/1/01 50 50% 50%
1/1/02 250 100% 25%
*Construction Underway
01) Rehabilitation Projects. The $2 million minimum Added Value requirement for abatement shall
not apply to rehabilitation projects which involve the adaptive reuse of an existing structure or
building for a Facility. In order to qualify as a rehabilitation project under this provision, the
project must involve a minimum capital expenditure of $250,000. Any rehabilitation project
must involve the adaptive reuse of an existing structure or building currently on the property tax
rolls so that the Base Year Value associated with the project will include both the value of the
land and the existing improvements. For such rehabilitation projects, all Eligible Property in
excess of the Base Year Value shall be subject to abatement plus the value of personal property
such as furniture and movable equipment which would otherwise be considered Ineligible
Property for any other type of abatement category. In no event, however, may the total value of
personal property subject to abatement exceed $1 million or the total amount of all property
subject to abatement in a rehabilitation project exceed $5 million.
(i) Estimated Added Value Requirement. At the time of execution of the tax abatement Agreement,
the Owner shall reasonably estimate the Added Value upon completion of construction of any
improvements to real property in connection with the Project. This "Estimated Added Value"
shall be stated in the Agreement. In the event that upon completion of construction of the
improvements, the Added Value, as determined by the Nueces County Appraisal District, shall at
any time thereafter during the term of the abatement Agreement be less than eight -five percent
(85%) of the Estimated Added Value, not due to circumstances beyond the control of Owner, the
Owner agrees to pay an amount equal to the then current tax rate of each Eligible jurisdiction
providing abatement applied to the difference between the actual Added Value from eighty-five
percent (85%) of the Estimated Added Value, multiplied by 100% minus the net percentage of
Abatement provided under the Agreement. For the purposes of this provision, the term
"circumstances beyond the control of Owner" shall include casualty losses, national economic
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CORPUS CHRISTI
December 1999
factors, shutdowns due to governmental regulations, strikes, acts of war, and the like. The
formula for calculating such additional tax is outlined as follows:
[Tax Rate] x [(85% of Est. Added Value - Actual AV) x (100% - Abatement%)] = Additional Tax
(j) Properties in Industrial Districts. For eligible property to be constructed in an area which is
covered by an executed industrial district agreement with the City, the method of calculating
payments in lieu of property taxes for such eligible property shall be as set forth in the industrial
district agreement. As an alternative to an industrial district agreement, an eligible property may
be covered by a tax abatement agreement, but such shall constitute an election by the Owner that
the land and improvements shall not be included within any type of industrial district
arrangement following the expiration of the tax abatement agreement.
(k) Economic Oualification. In order to be eligible for tax abatement, the planned improvement:
(1)
must create no later than the January 1 following the completion of construction and
maintain throughout the remainder of the term of the Agreement the minimum number of
50 permanent jobs in Nueces County;
(2) must not adversely affect competition in the local market with established local businesses.
(1) Taxability. From the execution of the Agreement to the end of the abatement period, taxes shall
be payable as follows:
(1)
The value of Ineligible Property as provided in Section 2(e) shall be fully taxable (except
for personal property added in connection with a Rehabilitation Project);
(2) The Base Year Value of existing Eligible Property as determined each year shall be fully
taxable; and
(3)
The Added Value of new Eligible Property (and certain personal property added in
connection with a Rehabilitation Project) shall be taxable in the manner described in Section
2(g) above.
Section 3. Application.
(a) Written Application. Any present or potential owner of taxable property may request tax
abatement by filing a written application with: (i) the City Manager of the City, if such property
is within the city limits, or (ii) the County Judge of Nueces County, if such property is in the
unincorporated areas of Nueces County.
(b) Contents of Application. The application shall consist of a completed application form
accompanied by: a general description of the new improvements to be undertaken; a descriptive
list of the improvements for which abatement is requested; a list of the kind, number and location
of all proposed improvements of the property; a map and property description; and a time
schedule for undertaking and completing the proposed improvements. In the case of a
modernization or expansion project, a statement of the assessed value of the Facility, separately
stated for real and personal property, shall be given for the tax year immediately preceding the
application. The application form may require such financial and other information as the City,
County or other Eligible jurisdiction, as applicable, deems appropriate for evaluating the
financial capacity and other relevant factors of the applicant.
CORPUS CHRISTI
December 1999
(c) Written Notification to Governing Bodies. Upon receipt of a completed application, the City
Manager or County Judge, as the case may be, shall forward a copy of the application to the
presiding officer of the governing body of each Eligible jurisdiction having jurisdiction of the
property covered by the application.
(d) Feasibility. After receipt of an application for abatement, the City or the County, as applicable,
shall consider the feasibility and the impact of the proposed tax abatement. The study of
feasibility shall include, but not be limited to, an estimate of the economic effect of the abatement
of taxes and the benefit to the Eligible jurisdiction and the property to be covered by such
abatement.
(e) No Abatement if Construction has Commenced. No tax abatement Agreement shall be approved
if the application for the abatement was filed after the commencement of construction, alteration
or installation of improvements related to the proposed Modernization, Expansion or New
Facility.
(1) Variance. Requests for variance from the provisions of Section 2 may be made in written form,
provided, however, that no variance may extend the term of abatement beyond five years after
completion of construction. Such requests shall include a complete description of the
circumstances explaining why the applicant should be granted a variance. Approval of a request
for variance requires a three-fourths (3/4) vote of the governing body of each Eligible jurisdiction
providing abatement.
Section 4. Public Hearing and Approval.
(a) Designation of Zone. A resolution designating a zone for tax abatement under the Act may not
be adopted by the City or the County until a public hearing has been held at which interested
persons are entitled to speak and present evidence for or against the designation. Notice of the
hearing shall be provided to each Eligible jurisdiction and to the public in the manner required by
the Act.
(b) Required Findings. In order to enter into a tax abatement Agreement, the County, the City and
any school district must fmd that the terms of the proposed Agreement meet these Guidelines and
Criteria.
(c) Reservation of Rights. Nothing herein shall be construed to limit the authority of the City, the
County or any other jurisdiction to examine each application for tax abatement before it on a
case-by-case basis and determine in its sole and absolute discretion whether or not the proposed
project should be granted temporary tax abatement and whether or not it complies with these
Guidelines and Criteria, is feasible, and whether or not the proposed temporary abatement of
taxes will inure to the long-term benefit of such Eligible jurisdiction.
Section 5. Agreement.
(a) Contents of Tax Abatement Agreement. The tax abatement Agreement with the Owner of the
Facility shall include:
(1)
(2)
(3)
the estimated value to be subject to abatement and the Base Year Value;
the percentage of value to be abated each year as provided in Section 2(g);
the commencement date and termination date of abatement;
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CORPUS CHRISTI
December 1999
(4) a provision that the term of the Agreement shall extend until five (5) years after the
expiration of the period of tax abatement;
(5)
the proposed use of the Facility, nature of construction, time schedule, map, property
description and improvements list as provided in the application as required;
(6) the contractual obligations in the event of default, delinquent taxes, recapture,
administration and assignment as provided in these Guidelines or other provisions that may
be required for uniformity or by state law; and
(7)
the amount of Added Value and required number of permanent jobs.
(b) Time of Execution. The tax abatement Agreement shall normally be executed within 60 days
after the applicant has provided all necessary information and documentation.
(c) Attorney's Fees. In the event any attorney's fees are incurred by the Eligible jurisdiction in the
preparation of a tax abatement Agreement, said fees shall be paid by the applicant upon execution
of the Agreement.
Section 6. Recapture.
(a) Failure to Commence Operation During Term of Agreement. In the event that the Facility is not
completed and does not begin operation with the minimum number of 50 permanent jobs by the
January 1 following the completion of construction, no abatement shall be given for that tax year,
and the full amount of taxes assessed against the property shall be due and payable for that tax
year. In the event that the Owner of such a Facility fails to begin operation with the minimum
number of 50 permanent jobs by the next January 1, then the abatement Agreement shall
terminate and all abated taxes during the period of construction shall be recaptured and paid
within 60 days of such termination.
(b) Discontinuance of Operations During Term of Agreement. In the event the Facility is completed
and begins operation with the required minimum number of 50 permanent jobs but subsequently
discontinues operations and the minimum number of 50 permanent jobs is not maintained on any
January 1 during the term of the Agreement after the completion of construction, for any reason
except on a temporary basis due to fire, explosion or other casualty or accident or natural
disaster, the Agreement may be terminated by the Eligible jurisdiction providing abatement, and
all taxes previously abated by virtue of the Agreement shall be recaptured and paid within 60
days of such termination.
(c) Delinquent Taxes. In the event that the Owner allows its ad valorem taxes to become delinquent
and fails to timely and properly follow the legal procedures for their protest and/or contest, the
Agreement shall terminate and so shall the abatement of the taxes for the tax year of the
delinquency. The total taxes assessed without abatement, for that tax year shall be paid within 60
days from the date of termination.
(d) Notice of Default. Should the Eligible jurisdiction providing abatement determine that the
Owner is in default according to the terms and conditions of its Agreement, it shall notify the
Owner in writing at the address stated in the Agreement that if such is not cured within 60 days
from the date of such notice (the "Cure Period"), then the Agreement may be terminated. In the
event the Owner fails to cure said default during the Cure Period, the Agreement may be
terminated and the taxes abated by virtue of the Agreement will be recaptured and paid as
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CORPUS CHRISTI
December 1999
provided herein.
(e) Actual Capital Investment. Should the Eligible jurisdiction providing abatement determine that
the total level of capital investment in eligible property is lower than provided in the Agreement,
the difference between the tax abated and the tax which should have been abated based upon the
actual capital investment as determined shall be paid to the taxing agencies within 60 days of
notification to the Owner of such determination.
(0 Reduction in Rollback Tax Rate. If during any year of the period of abatement with respect to
any property any portion of the abated value which is added to the current total value of the
Eligible jurisdiction but is not treated as "new property value" (as defined in Section 26.012(17)
of the Texas Tax Code) for the purpose of establishing the "effective maintenance rate" in
calculating the "rollback tax rate" in accord with Section 26.04(c)(2) of the Texas Tax Code and
if the Eligible jurisdiction's budget calculations indicate that a tax rate in excess of the "rollback
tax rate" is required to fund the operations of the Eligible jurisdiction for the succeeding year,
then the Eligible jurisdiction shall recapture from the taxpayer a tax in an amount equal to the
lesser of the following:
(1) The amount of the taxes abated for that year by the Eligible jurisdiction with respect to
such taxpayer.
(2) The amount obtained by subtracting the rollback tax rate computed without the abated
property value being treated as new property value from the rollback tax rate computed
with the abated property value being treated as new property value and multiplying the
difference by the total assessed value of the Eligible jurisdiction.
If the Eligible jurisdiction has granted an abatement of taxes to more than one taxpayer, then the
amount of the recapture calculated in accord with subparagraph (2) above shall be prorated on the
basis of the amount of the abatement with respect to each taxpayer.
All recaptured taxes must be paid within thirty (30) days after notice thereof has been given to
the affected taxpayer. Penalty and interest shall not begin to accrue upon such sum until the first
day of the month following such thirty (30) day notice, at which time penalty and interest shall
accrue in accord with the laws of the State of Texas.
(g) Continuation of Tax Lien. The amount of tax abated each year under the terms of these
Guidelines and the Agreement shall be secured by a first and prior tax lien which shall continue
in existence from year to year throughout the entire term of the Agreement or until all taxes,
whether assessed or recaptured, are paid in full.
Section 7. Administration.
(a) Annual Assessment. The Nueces County Appraisal District shall annually determine an
assessment of the real and personal property subject to an Agreement. Each year, the Owner
shall furnish the Appraisal District with such information as may be necessary for the abatement.
Once value has been established, the Appraisal District shall notify the affected jurisdictions
which levy taxes of the amount of the assessment and the abatement.
(b) Access to Facility. The Agreement shall stipulate that employees and/or designated
representatives of the Eligible jurisdiction will have access to the Facility during the term of the
Agreement 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 24 hours prior notice and will only be
9
CORPUS CHRISTI
December 1999
conducted in such manner as to not unreasonably interfere with the construction and/or operation
of the Facility. All inspections will be made with one or more representatives of the Owner and
in accordance with its safety standards.
(c) Annual Evaluation. Upon completion of construction, the Eligible jurisdiction individually or in
conjunction with other affected jurisdictions, shall annually evaluate each Facility receiving
abatement to ensure compliance with the Agreement and report possible violations of the
Agreement.
(d) Annual Reports. The Owner shall certify to the governing body of the Eligible Jurisdiction on or
before April 1 each year that the Owner is in compliance with each applicable term of the
agreement. Additionally, during the initial four years of the term of property tax abatement, the
Owner shall provide to the Eligible Jurisdiction approving the abatement an annual report
covering those items listed on Schedule 1 in order to document its efforts to acquire goods and
services on a local basis. Such annual report shall be prepared on a calendar year basis and shall
be submitted to the Eligible jurisdiction no later than ninety (90) days following the end of each
such calendar year. The annual report shall be accompanied by an audit letter prepared by an
independent accounting firm which has reviewed the report.
(e) "Buy Local" Provision. Each recipient of property tax abatement shall additionally agree to give
preference and priority to local manufacturers, suppliers, contractors and labor, except where not
reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in
operating efficiency. In any such exception cases involving purchases over $10,000.00 a
justification for such purchase shall be included in the annual report. Each such recipient shall
further acknowledge that it is a legal and moral obligation of persons receiving property tax
abatements to favor local manufacturers, suppliers, contractors and labor, all other factors being
equal. For the purposes of this provision, the term "local" as used to describe manufacturers,
suppliers, contractors and labor shall include firms, businesses, and persons who reside in or
maintain an office in either Nueces County or San Patricio County. In the event of a breach of
the buy -local provision, the percentage of abatement shall be proportionately reduced equal to the
amount the disqualified contract bears to the total construction cost for the project.
(0
(g)
Right to Modify or Cancel. Notwithstanding anything herein or in any agreement to the
contrary, the governing body of the Eligible Jurisdiction may cancel or modify the agreement if
the Owner fails to comply with the Agreement.
Transition Rule. For any project which obtained an abatement agreement within the twelve
months prior to adoption of these Guidelines, such project may, upon the agreement of the
Owner and the Eligible Jurisdiction, obtain an amendment to its tax abatement agreement to
incorporate the terms and conditions of these Guidelines.
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CORPUS CHRISTI
December 1999
SCHEDULE 1
"Buy Local" Annual Reports
The following information shall be reported to the Govemmental Unit on a calendar -year
basis during the first four years of the tax abatement program:
1. Dollar amount spent for materials* (local).
2. Dollar amount spent for materials* (total).
3. Dollar amount spent for labor** (local).
4. Dollar amount spent for labor** (total).
5. Number of jobs created in the construction project (local).
6. Number of jobs created in the construction project (total).
7. Number of jobs created on a permanent basis (local).
8. Number of jobs created on a permanent basis (total).
* "Materials" is defined to include all materials used in excavation, site improvement, demolition,
concrete, structural steel, fire proofing, piping, electrical, instruments, paintings and scaffolding,
insulation, temporary construction facilities, supplies, equipment rental in construction, small tools
and consumables. This term does not include major items of machinery and equipment not readily -
available locally.
** "Labor" is defined to include all labor in connection with the excavation, site improvement,
demolition, concrete construction, structural steel, fire proofing, equipment placement, piping,
electrical, instruments, painting and scaffolding, insulation, construction services, craft benefits,
payroll burdens, and related labor expenses. This term does not include engineering services in
connection with the project design.
The term "local" as used to describe manufacturers, suppliers, contractors and labor shall include
firms, businesses, and persons who reside in or maintain an office in either Nueces County or San
Patricio County.
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