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HomeMy WebLinkAbout027477 RES - 11/13/2007Page 1 of A RESOLUTION ADOPTING THE TEXAS ENTERPRISE P ISE ZONE POLICY BE IT RESOLVED ED BY THE CITY COUNCIL CIL of THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the Texas Enterprise Zone Policy, attached hereto, is hereby adopted. Armando Chapa City Secretary CITY 0 CORPUS CHRISTI Henry Garr Mayor APPROVED AS TO FORM: DI: f ovember 7, 2007 tik.) r Smith Assistant City Attorney For the City Attorney 027477 1-1 -DIk \hared\ ry lagenda\2007\11-1 1Res-AdaptTexasEnterprise efePeliey.d0 Page 2 of Corpus Christi, Texas of NijiL__ 2007 The above resolution was passed by the following vote: Henry Garrett Melody Cooper Larry Elizondo, Sr. Mike Hummell Bill Kelly Priscilla G. Leal John E. Marez Nelda Martinez Michael McCutchon A.106aTy- 027477 H:1L-DIRIShaced\ ary \agenda\ 0 7111-1 \ e - doptTexa Enterpri a OfePeli Y.de City of Corpus Christi Texas Enterprise Zone Policy I. Policy The City of Corpus Christi (the City) is committed to improving the quality of life for its citizens by the promotion of quality development in all parts of the City. This policy and procedures are established in an effort to sustain, develop and expand the local economy by promoting and encouraging development and redevelopment projects that enhance the City's economic base, diversify and/or expand job opportunities which create additional local and regional revenue and enhance the City's fiscal ability to provide high quality municipal services for the safety, comfort and enjoyment of residents throughout the City. The Texas Enterprise Zone program is an economic development tool for local communities to partner with the State of Texas to encourage job creation and capital investment in economically distressed areas of the state. A qualifying business is nominated by its local city or county to receive state sales tax refunds. By granting these incentives to businesses in need, the City of Corpus Christi seeks to encourage improvements and progress and at the same time adhere to the rules and regulations set forth by the State. Each applicant must be nominated for Enterprise Zone designation by the Corpus Christi City Council. An applicant may request a meetings) with appropriate City staff prior to submitting a request for nomination in order to obtain information and seek clarification. The meeting will be scheduled through the Economic Development Office. A preliminary review will be completed by City staff within approximately 20 working days to ensure compliance with these guidelines. If the application does not meet the criteria the applicant will be notified and will have approximately 14 working days to supply required information. All applicants that apply and qualify for participation will be scored and presented to the City Council. Alt project information provided to or developed by the City may be subject to disclosure under the Texas Public Information Act. Nothing in this policy shall imply that the City is under any obligation to nominate a project for Enterprise Zone designation. Each applicant will be evaluated on the basis of individual merits. The decision to approve or deny economic nomination shall be at the sole discretion of the City Council. The City Council may vary, alter, and/or waive any of the criteria ser forth herein when such variance, alteration and/or waiver is in the public interest and does not conflict with rules and regulations set forth by the state. 11. Applicability Several criteria exist for an area to be recognized as an enterprise zone in the State of Texas. To be considered an enterprise zone one of the following must be met: • A block group determined by the U.S. Census Bureau decennial census to have a poverty rate of 20% or more. The block group will remain an enterprise zone until it no longer qualifies upon subsequent decennial census results. • Any distressed county in Texas is ars enterprise zone. The State of Texas defines distressed as meeting certain requirements. The county has a poverty rate above 15.4 according to the most recent census decennial data. At least 25.4% of the adult population does not hold a high school diploma or high school equivalency certificate. The unemployment rate is 4.9% or higher and has been for the preceding five years. Nueces county does not qualify as a distressed county as of 2006 due to an improvement in the unemployment rate. • Federally defined renewal community, empowerment zone, or enterprise community may function as an enterprise zone. Renewal Community census tracts 1, 3, 4, 10, and 11 in Corpus Christi and the expanded Renewal Community census tracts 5, 7, 13, 35, and 50 in Corpus Christi are designated as Enterprise Zones. For a business to qualify for the Enterprise Zone program the business does not have to be physically located in an enterprise zone. However to qualify for incentives the business will be required to hire at least 35% new employees who reside in an enterprise zone or who are economically disadvantaged as outlined by the State. 111. Authority A. Local Authority. The City of Corpus Christi adopted this policy by Resolution No on 2007. The policy is intended to provide guidelines to City Staff and interested parties regarding benefits and incentives to business under the Texas Enterprise Zone program. B. Statutor uthorit rte. Tax incentives will be provided in accordance with the procedures and criteria outlined in the policy as authorized by Chapter 2303 of the Texas Government Code. IV. Benefits to Participation Designated projects are eligible to apply for state sales and use tax refund on taxable items. The level and amount of refund is related to the capital investment and jobs created at the qualified business site Level of Capital Investment. Maximum number obs allocated Maximum potential refund Maximum refund per b allocated $40,000to$399,999 1 $25,000 $2,500 $400,000 to $999,999 2 $62,500 $2,500 _ $1,000,000to$4,999,999 _ 125 $312,500 $1,250,000 $2,500 $2,500 $5,000,000to$149,999,999 500 Double Jumbo Project $150,000,000 to $249,999,999 500 $2,500,000 $5 #000 Triple Jumbo Project $250,000,000 or more 500 $3,750,000 $7,500 V. Selection Criteria Every two years the State of Texas can designate up to 105 slotsto qualifying businesses for enterprise zone program benefits. The City of Corpus Christi can nominate up to 6 slots every two years. A single business is allowed up to three slots. The number of slots selected is based on the size of the investment and jobs created. Binding commitments from a future biennium may be made at the sole discretion of the City Council. The State provides authority to local jurdictionsto determine how slots are to be allocated. Upon City Council approval of an advanced commitment to a business, the business must meet the selection criteria at the time of official nomination. If selection criteria are not met at the time of official nomination, the business will not qualify for benefits under the Texas Enterprise Zone policy. Businesses must meet certain requirements to qualify for enterprise zone status. If the business is physically located in an enterprise zone, then no further conditions are needed. Otherwise the following three criteria r=ust be met: • The person is engaged in, or has provided substantial commitment to initiate the active conduct of a trade or business at a qualified business site; and • At least 25% of the business' new employees are either economically disadvantaged or enterprise zone residents (ED/EZR) if the qualified business site is located in an enterprise zone, or at least 35% of the business' new employees are ED/EZR if the qualified business site is located outside of an enterprise zone; and • A franchise or subsidiary of a new or existing business may be certified by the governing jurisdiction as a qualified business if the franchise or subsidiary is located entirely at the qualified business site and maintains separate books and records of the business activity conducted at the qualified business site. Participation requirements outlined by the state are asfollows: • Enterprise project designation is up to a five year period, in addition to a 90 -day window prior to the quarterly deadline application/designation date as shown on page 5 of this policy. Employment and capital investment commitments must be incurred and met within the 90 -day window to the designation expiration date. • Projects may be physically located in or outside of an Enterprise Zone. • If located within a zone, the company commits that 25% of their new employees will meet economically disadvantaged or enterprise zone residency requirements. • If located outside of a zone, the company commits that 35% of their new employees will meet economically disadvantaged or enterprise zone residency requirements. See Appendix A for further information. • Jobs must provide employment of at least 1,820 hours annually. • Jobs must exist through the end of the designation period, or at least three years after the date on which a state benefit is received, whichever is later. • Retained jobs may count towards benefit status under certain circumstances. See Appendix A for further information. Upon meetlig all state required criteria proiects will be selected for recommendation to the City Council based upon thollorlr_ rioritis; 1. The project creates or retains a significant number of full-time jobs 2. The capital investment is no less than $200,000. 3. The project is located in an Enterprise Zone or Renewal Community Census Tract, 4. The project develops or redevelops in the Downtown area. . The project generates economic development in the surrounding area. The chart below provides a point value for scoring Enterprise Zone projects, Enterprise Zone Project Selection Criteria Significant number of full-time created or retained jobs Capital investment of no less than $200,000 Point Value 20 25 Project location is in Enterprise Zone or Renewal Community Development or redevelopment in the Downtown area lenerates economic development in the surrounding area 20 20 15 VI. Application Process Applications are accepted in the Office of the Governor from nominated businesses quarterly. Applications must be in the office of the Governor by the first working day of March, June, September, and December and no earlier than five business days prior to the deadlines. Quarterly Application Deadline 90 -Day Window Designation Expiration 09104/07 04/23/07 09/04112 _ 12/03107 _ 07/23107 12/03/12 _ 03/03/08 10/17/07 03/03/13 _ 06/02/08 _ 01/23/08 06/02/13 09/02/08 04/22/08 _ 09/02/13 _ 12/01/08 07/18/08 _ 12/01/13 _ _ 03/03/09 10/14/08 03/03/14 _ 06/01/09 01/20/09 06/01/14 90 working days; excludes weekends and state and federal holidays The City shall not grant any incentive unless the business submits a full and complete application and provides additional information as may be requested. The accuracy of the information in the application is the sole responsibility of the applicant. Upon request the applicant shall provide supporting documentation. Any misstatement of or error in fact may render an application null and void and may be cause for repeal of any ordinance adopted in reliance of said information. It is the sole responsibility of the applicant to meet the State guidelines and requirements. Vii. Fees State Fees A nonrefundable fee will be assessed for each application. A fee of $750 will be charged for enterprise project status. A fee of $1,500 will be charged to double jumbo enterprise project status and $2,250 for triple enterprise project status. Enterprise projects will be assessed 3% on the amount of any refund benefit received under the state enterprise zone program. Lora/ Fees A nonrefundable fee will be assessed for each application made payable to the City of Corpus Christi in the amount of $200. This is an addition to the state assessed fees for application. Appendix A 1. According to the State of Texas economically disadvantaged is defined as: An individual who at the time of hire: a. was unemployed for at least three months before obtaining employment with a qualified business; or b. receives public assistance benefits, such as welfare or food stamp payments, or a member of an employee's immediate family receiving Supplemental Security Income or Aid to Families with Dependent Children payments. (Food Stamps must be received by the employee only, not a member of the employee's immediate family.); or c, has a physical or mental disability (a disability that constitutes or results in a substantial barrier to employment and can reasonably be expected to benefit in terms of employability from vocational rehabilitation services. NOTE: Individuals must be certified by an authorized agency or doctor.); or d. is homeless (lacks a fixed or regular nighttime residence or whose residence is a supervised public or private shelter providing temporary living accommodations; or e. is a foster child (an individual on behalf of whom state or local government payments are made and for whom a court order removing the child from the custody of the parent and specifying a manager conservator exists); or f, is on parole or entering the workplace after being confined in a unit or correctional facility of the institution division of the Texas Department of Criminal Justice or the Texas Youth Commission; or g. is an individual whose total family income meets the low income or moderate income limits developed under Section 8, United States Housing Act of 1937. Includes all income by employee, spouse, all dependents, and family members living with employee as of the employment date. 2. According to the State of Texas job retention projects are available under limited circumstances. To qualify for a job retention project, a business must present documentation to the applicant jurisdiction supporting any one of the following circumstances: a, that permanent employees will be permanently laid off; b. the business will permanently close down; c. the business will relocate out of state; d. the business is able to employ individuals in accordance with Section 2303.402; or e, the business facility has been legitimately destroyed or substantially impaired due to fire, flood, tornado, hurricane, or any other natural disaster and that at least 60 percent of the capital investment is being spent to repair damages resulting from the disaster, All of the retained jobs must be certified by the Comptroller of Public Accounts before any benefits for jobs can be obtained. 3. Chapter 2303 of the Texas Government Code § 2303.406 (a) (4) (D) Enterprise Project Designation The bank [Texas Economic Development Bank] may designate a project or activity of a business as an Enterprise project only if the bank receives all of the information required by Section 2303. 052 and determines that the business is seeking job retention benefits and 10 percent increase in the production capacity of the business will occur. 2303.401 (2) Definitions "Retained job" means a job that existed with the qualified business before designation of the business's project or activity as an Enterprise Project that: A. has provided employment to a qualified employee of at least 1,820 hours annually; and B. is intended to be an employment position for at least three years after the date on which a state benefit is received as authorized by this chapter.