1999-026 Cr RESOLUTION NO. 99-26
A RESOLUTION OF THE CITY OF SOUTHLAKE, TEXAS, ADOPTING A
TAX ABATEMENT POLICY; ESTABLISHING GUIDELINES AND
CRITERIA FOR TAX ABATEMENT AGREEMENTS; ELECTING TO
BECOME ELIGIBLE TO PARTICIPATE IN TAX ABATEMENT; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the future economic viability of the City of Southlake depends on the
ability to attract new investments through the location of new businesses and the expansion
and modernization of existing businesses; and
WHEREAS, the City Council has determined that the creation and retention of job
opportunities that result from new economic development is in the best interest of the City
of Southlake; and
WHEREAS, the establishment of economic development incentives such as tax
abatements may encourage enhancement of the local economy; and
WHEREAS, the City Council wishes to adopt guidelines and criteria governing tax
abatement agreements; and
WHEREAS, the guidelines and criteria adopted herein authorize tax abatement for
both new facilities and structures and for the expansion or modernization of existing
facilities and structures.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS, THAT:
SECTION 1.
The City Council does hereby adopt a Tax Abatement Policy, attached hereto as
Exhibit "A" and incorporated herein for all purposes. This Tax Abatement Policy shall
govern all tax abatement matters considered by the City from and after the date of this
Resolution, until said policy expires or is repealed or amended as provided by law.
SECTION 2.
The Tax Abatement Policyis effective for two (2) years from the date of adoption.
During that period, the Tax Abatement Policy may be amended or repealed only by a vote
of 3/4 of the members of the City Council. Said Tax Abatement Policy is intended as a
guide for use in developing tax abatement programs and agreements under the provisions
of Chapter 312 of the Texas Tax Code.
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SECTION 3.
The City of Southlake hereby elects to become eligible to participate in tax
abatement.
SECTION 4.
The adoption of the Tax Abatement Policy and the City's election to become eligible
to participate in tax abatement as provided herein shall not be construed to require the City
of Southlake to approve any proposed tax abatement agreement which meets the
requirements of the policy. Tax abatements shall be reviewed on a case by case basis and
shall be granted only where the City Council determines in its sole discretion that the tax
abatement is in the best interest of the citizens of Southlake.
SECTION 5.
This Resolution shall become effective upon passage.
PASSED AND APPROVED this the day of MAY, 1999.
Rick Stacy, Mayor
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EXHIBIT A
(Iv TAX ABATEMENT POLICY
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City of Southlake, Texas
Tax Abatement Policy
May 4, 1999
Section I. General Purpose and Objectives
A. The City of Southlake, Texas, is committed to the promotion and retention of high
quality development in all parts of the City; and to an on-going improvement in the quality of
life for its citizens. Insofar as these objectives are generally served by the enhancement and
expansion of the local economy, the City of Southlake will, on a case-by-case basis, give
consideration to providing tax abatements as stimulation for economic development in
Southlake. It is the policy of the City of Southlake that said consideration will be provided in
accordance with the criteria outlined in this document. Nothing herein shall imply or suggest
that the City of Southlake is under any obligation to provide tax abatement to any applicant.
All applicants shall by considered on a case-by-case basis.
Section II. Applicability
A. This tax abatement policy establishes guidelines and criteria for tax abatement programs
and agreements under the provisions of Chapter 312 of the Texas Tax Code.
Section III. Abatement Criteria
A. Any consideration for a tax abatement shall be reviewed by the City of Southlake City
Council. The review process will examine the "value added" terms of the project.
Considerations by the City Council shall be for new construction, whether it is a new facility
or an expansion of an existing building.
B. Specific considerations will include the degree to which the individual project furthers
the goals and objectives of the community, as well as the relative impact of the project,
including costs to the City for providing services, impact on the environment and the local
housing market, and required infrastructure.
C. Value and Term of Abatement. Abatement shall be granted effective with the execution
of the agreement. The amount of the abatement will be determined based on the merits of the
project, including, but not limited to, total capital investment, added employment, and average
annual salary. Abatement will be granted for a maximum of ten years. Abatement may be
granted only for the additional value of eligible property improvements made subsequent to and
listed in a tax abatement agreement.
1.) For new businesses, the project must be reasonably expected to produce a minimum
added value of Ten Million Dollars ($10,000,000) in real and personal property improvements
within the City of Southlake, and create a minimum of 1,000 full-time jobs, with an average
annual total compensation of$50,000.
Tax Abatement Policy - Adopted by City Council Resolution No. 99-26 on May 4, 1999 - Page 1 of 3
r 2.) For expansion or modernization of existing businesses, the project must be reasonably
expected to produce a minimum added value of Five Million Dollars ($5,000,000) in real and
personal property improvements within the City of Southlake, and create a minimum of 500
new full time jobs with an average annual total compensation of$50,000.
D. Consideration will also be given for direct sales tax that is generated by the applicant.
Section IV. Recapture
A. If the terms of the tax abatement agreement are not met, the City Council has the right
to cancel or amend the abatement agreement. In the event of cancellation, the recapture of
abated taxes shall be limited to the year(s) in which the default occurred or continued.
Section V. Inspection and Financial Verification
A. The terms of the agreement shall include the City of Southlake's right to (1) review and
verify the applicant's financial statements in each year during the life of the agreement prior to
granting a tax abatement in any given year, and (2) conduct an on-site inspection of the project
in each year during the life of the abatement to verify compliance with the terms of the tax
abatement agreement.
Coe Section VI. Evaluation
A. Upon completion of the construction of the facilities, the City shall no less than
annually evaluate each project receiving abatement to insure compliance with the terms of the
agreement. Any incidents of non-compliance will be reported to all affected taxing units.
Section VII. Severability and Limitation
A. In the event that any section, clause, sentence, paragraph or any part of this Tax
Abatement Policy 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 the guidelines
and criteria in this Tax Abatement Policy.
Section VIII. Expiration and Modification
A. This Tax Abatement Policy is effective upon the date of its adoption and will remain in
force for two years, at which time all reinvestment zones and tax abatement contracts created
pursuant to its provisions will be reviewed by the City Council to determine whether the goals
of the abatement program have been achieved. Based upon that review, the Tax Abatement
Policy may be modified, renewed or eliminated.
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Tax Abatement Policy - Adopted by City Council Resolution No. 99-26 on May 4, 1999 - Page 2 of 3
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B. Prior to the date for review, as defined above, the Tax Abatement Policy may be
modified by a three fourths vote of the City Council, as provided for in Chapter 312 of the
Texas Tax Code.
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