(a) 
Guidelines and criteria adopted.
The guidelines and criteria for granting tax abatements in reinvestment zones created in the city set out in division 2 of this article are hereby approved and established as the city’s guidelines and criteria governing eligibility for tax abatement agreements, pursuant to state law.
(b) 
Change or repeal of guidelines and criteria.
The city council shall not change or repeal the guidelines and criteria from the date of adoption of this section unless the city council approves the change or repeal by a three-fourths vote, unless otherwise provided by state law.
(c) 
Election to participate in tax abatement.
Pursuant to state law, the city hereby elects to become eligible to participate in tax abatement.
(d) 
Payment of filing fees.
Each applicant must pay the appropriate filing fees before the city may grant him or her a tax abatement.
(e) 
Payment of consulting and professional fees.
Each applicant must pay all consulting and professional fees that the city incurs.
(1995 Code, sec. 29.042)
These guidelines and criteria shall be known and may be cited as the tax abatement ordinance.
(1995 Code, app. 7, sec. 1)
These guidelines and criteria are promulgated under the direction and authority of chapter 312 of the Texas Tax Code (the “code”). To the extent that the guidelines and criteria of this division conflict with the code, the code shall govern. The city adopted Resolution No. 96-R-171 stating that the city elects to become eligible to participate in tax abatement.
(1995 Code, app. 7, sec. 2)
The guidelines and criteria are effective for two years from the date the city adopts them, unless, during that period, the city council approves an amendment or repeal by a three-fourths vote. No action that the city takes regarding the guidelines and criteria will impact any agreements or obligations already in place under these guidelines and criteria.
(1995 Code, app. 7, sec. 3)
When used in this division, the following definitions shall apply unless the context clearly indicates otherwise:
Abatement.
The full or partial exemption from ad valorem taxes of certain real and tangible personal property in a reinvestment zone that the city has designated for economic development purposes.
Agreement.
A tax abatement agreement.
Applicant.
The individual or company that files with the city an application to enter into a tax abatement agreement.
Application.
A tax abatement application.
Base year value.
The assessed value (as determined by the Travis Central Appraisal District) of eligible property as of January 1 before the parties entered a tax abatement agreement plus the agreed-upon value of eligible property improvements made after January 1 but before the parties entered the tax abatement agreement.
Code.
The Texas Tax Code Annotated (Vernon 1992) and all more recent amendments or repeals subsequently added.
Deferred maintenance.
Improvements necessary for continued operation that do not improve productivity or alter the process technology.
Expansion.
The addition of buildings, structures, machinery, equipment, or payroll for purposes of increasing production capacity.
Guidelines and criteria.
The guidelines and criteria for granting tax abatements in reinvestment zones created in the city.
Modernization.
The replacement and upgrading of existing property that increases the productive output, updates the technology, or substantially lowers the unit cost of operation. Modernization may result from the construction, alteration, or installation of buildings, structures, machinery, or equipment. It shall not be for the sole purpose of reconditioning, refurbishing, or repairing.
New property.
Previously undeveloped property that is placed into service by means other than or in conjunction with expansion or modernization.
Notify.
Placing a written notice in the mail with the correct postage and address. A return receipt is prima facie proof that the sender delivered notice.
Productive life.
The number of years a property improvement is expected to be in service.
Property.
Facilities, buildings, structures, equipment, etc., that are eligible for tax abatements. Property shall not mean land alone.
Recipient.
The individual or company that enters into a tax abatement agreement with the city.
Zone.
A reinvestment zone that the city designates by ordinance.
(1995 Code, app. 7, sec. 4)
(a) 
Eligible property.
The city may grant a tax abatement for eligible property, which is limited to:
(1) 
Property that is within the boundaries of a designated zone;
(2) 
Property for which the applicant has filed an application;
(3) 
Either new property or the expansion or modernization of existing property;
(4) 
Buildings, structures, fixed machinery and equipment, site improvements, or related fixed improvements necessary to the operation and administration of the property;
(5) 
Property that is reasonably likely to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would benefit the property and contribute to the economic development of the city;
(6) 
Property on which the owner will make specific improvements or repairs;
(7) 
The additional value of eligible property improvements made after the city and the recipient enter an agreement;
(8) 
Property on which the city expects the planned improvement:
(A) 
To have an increased appraised ad valorem tax value of at least $100,000.00 for each separate tract of property in the zone based on the Travis Central Appraisal District’s assessment of the eligible property or to add 5 employees; and
(B) 
To prevent the loss of payroll or retain, increase, or create payroll on a permanent basis in the city;
(9) 
Leased or rented property only if the city obtains the written consent of both the lessor and the lessee (if the lessor is not the owner of the property, the city must also obtain the written consent of the property owner); and
(10) 
Property that conforms to the city’s comprehensive zoning ordinance.
(b) 
Ineligible property.
The following types of property are not eligible for tax abatement and shall be subject to the city’s full tax rate:
(1) 
Land;
(2) 
Inventory;
(3) 
Supplies;
(4) 
Tools;
(5) 
Any form of tangible personal property that was located on the real property at any time before the period covered by the agreement;
(6) 
Deferred maintenance;
(7) 
Rented or leased property unless both the lessor and the lessee consent in writing (if the lessor is not the owner of the property, the property owner must also provide written consent);
(8) 
Property that has a productive life of less than ten (10) years;
(9) 
Property that is in an improvement project financed by tax increment bonds;
(10) 
Property that is owned or leased by a member of the city council or a member of the planning and zoning commission; and
(11) 
Real property for which the property’s value for any year covered by the agreement is less than its value for the year in which the city and the recipient entered the agreement.
(1995 Code, app. 7, sec. 5)
(a) 
Notice.
At least seven (7) days before the hearing, the city must:
(1) 
Publish notice of the hearing in the official city newspaper; and
(2) 
Deliver written notice of the hearing to the presiding officer of the governing body of each of the other taxing units that has real property in the proposed zone.
(b) 
Required findings.
The city council must make and approve several findings at the public hearing, noting them in the minutes for that meeting, including:
(1) 
That the improvements are feasible and practical and would benefit the property and the city even after the agreement expires, and that it is in the best interest of the city to provide a tax abatement to the applicant;
(2) 
That the zone meets one of the applicable criteria for zones as provided by section 312.202 of the code.
(c) 
Ordinance establishing zone.
The city council may adopt an ordinance designating the property as a zone. The ordinance must contain a metes and bounds description of the property included in the zone and state whether the zone is eligible for residential tax abatement, commercial-industrial tax abatement, or tax increment financing as provided in chapter 311 of the code.
(d) 
Duration of zone.
The designation of the zone lasts for five years from the date the city designates the zone by ordinance. The city council may renew the zone an unlimited number of times for successive periods of up to five years. The expiration of the designation of a zone does not affect an existing agreement.
(1995 Code, app. 7, sec. 6)
(a) 
Generally.
Any present or potential owner or lessee of taxable property in the city may request the city to create a zone and/or to enter an agreement by filing a written application. If the applicant’s property is not in a designated zone, the city must designate a zone by the proper procedures, and then consider entering an agreement to abate the taxes for the applicant’s property. If the applicant’s property is in a designated zone, the applicant may ask to enter an agreement.
(b) 
Application form and contents.
To request a tax abatement, the owner/lessee of the property must file a written application with the city on the tax abatement application form that the city secretary provides. The application must include:
(1) 
The name, address, and telephone number of the applicant and date of the application;
(2) 
The estimated value and duration of the tax abatement that the applicant is requesting;
(3) 
A list of the kind, number, value, location, and productive life of all proposed improvements to the property, and a time schedule for beginning and completing the proposed improvements;
(4) 
A map and legal property description;
(5) 
A general description of the effect of the proposed improvements on the local economy, including those of the following factors that are relevant:
(A) 
The number of existing jobs and/or the number of types of new jobs that the proposed improvements will create;
(B) 
Whether persons residing or projected to reside within the affected taxing jurisdictions will fill the new jobs;
(C) 
The amount of local sales taxes that the improvements will generate directly;
(D) 
The cost the city will incur to provide facilities or services that are a direct result of the new improvements;
(E) 
The population growth in the city that will occur as a direct result of the new improvements;
(F) 
Whether the proposed improvements will compete with existing businesses to the detriment of the local economy or existing businesses;
(G) 
Whether the proposed improvements will attract other new businesses to the area;
(H) 
Any other financial information that the city may deem appropriate;
(6) 
For applicants wanting to modernize or expand existing property, a statement of the assessed value of the property in the tax year immediately preceding the year in which the applicant files the application;
(7) 
Evidence that the proposed improvements are compatible with the city’s zoning ordinances and comprehensive plan;
(8) 
A statement describing the impact that the proposed improvements will have on the environment and on the residents’ quality of life.
(c) 
Waiver of application requirements.
The city may waive application requirements when it deems such requirements unnecessary to properly evaluate the request.
(d) 
Representations by applicant to be conditions of abatement.
All representations, whether oral or written, that the applicant makes on or in connection with an application under this division must be true and correct and become conditions upon which the city issues the tax abatement. The city secretary shall reduce all these oral representations to writing and include them with the application.
(1995 Code, app. 7, sec. 7)
If the city has not already established a zone that includes the applicant’s property, the city council shall schedule a public hearing on the issue of designating the property as a zone within sixty (60) days after receiving the application. If the city has established a zone that includes the applicant’s property, the city council shall deliver the proper notice of its intent to consider the application within thirty (30) days after receiving the application.
(1995 Code, app. 7, sec. 8)
(a) 
Notice of intent to enter into agreement.
At least seven (7) days before the city council signs an agreement, it must deliver to the presiding officer of the governing body of each of the other taxing units that has real property in the proposed zone:
(1) 
Written notice of the city’s intent to enter into the agreement; and
(2) 
A copy of the proposed agreement.
(b) 
Action on application.
The city council shall by resolution either approve or disapprove the application. The city council shall notify the applicant of the city’s approval or denial of the application within five (5) days after reaching a decision.
(c) 
Adoption of agreement.
To approve an agreement, the city council must adopt the agreement by an affirmative vote of the majority of the members at a regularly scheduled meeting.
(d) 
Denial of agreement.
The city council shall not enter into an agreement if the city determines:
(1) 
The agreement would have a substantial adverse effect on the tax base or on the provision of government services;
(2) 
The applicant has insufficient financial capacity;
(3) 
The planned or potential use of the property would constitute a hazard to public safety, health, or morals;
(4) 
The agreement violates other codes or laws;
(5) 
Any other reason to deny approval of the agreement.
(e) 
Mandatory contents of agreement.
Should the city council choose to approve the tax abatement, every agreement must:
(1) 
List the kind, number, and location of all proposed improvements to the property;
(2) 
Authorize access for the city to inspect the property to ensure that the applicant has made the improvements or repairs according to the specifications of the agreement;
(3) 
Provide for recapturing the property tax revenues that are lost if the owner fails to make the improvements or repairs according to the specifications of the agreement;
(4) 
Limit the use of the property for purposes consistent with encouraging development or redevelopment of the zone;
(5) 
Contain each term on which the city and the property owner agree, including attachment of all written consents to the agreement;
(6) 
Require the property owner to certify annually to the governing body of each taxing unit that the owner is in compliance with each applicable term of the agreement;
(7) 
Provide that the city council may cancel or modify the agreement if the property owner fails to comply with the agreement; and
(8) 
Meet all other mandatory provisions prescribed by section 312.205(a) of the code.
(f) 
Optional contents of agreement.
Each agreement may, at the option of the city council, include the following provisions for:
(1) 
Improvements or repairs by the city to streets, sidewalks, and utility services or facilities associated with the property as long as the charges or rates are not lower than the rates for other services or properties of a similar character;
(2) 
An economic feasibility study, including a detailed list of estimated improvements costs, a description of the methods of financing all estimated costs, and the time when the applicant will incur all related costs or monetary obligations;
(3) 
A map showing existing uses and conditions of real property in the zone;
(4) 
A map showing proposed improvements and uses of the property in the zone; or
(5) 
Proposed changes of zoning ordinances, the master plan, the map, building codes, and city ordinances.
(g) 
Requirements if previous agreements exist.
If agreements already exist with other property owners in the zone, the agreement with the new applicant must have identical provisions regarding the portion of the value of the property that will be exempt and the duration of the exemption.
(h) 
Duration of agreement.
All agreements into which the city enters shall be for a term of ten (10)years or less. The term shall begin on the date that the city or the applicant signs the agreement, whichever is later.
(1995 Code, app. 7, sec. 9)
(a) 
From the time the parties execute the agreement until the end of the agreement period, the city shall tax the recipient as follows:
(1) 
The city shall fully tax all ineligible property;
(2) 
The city shall fully tax the base year value of all eligible property; and
(3) 
The city shall abate the taxes in accordance with the terms of the agreement for the additional value of eligible property during the tax abatement period.
(b) 
The city shall fully tax the additional value of eligible property at the end of the tax abatement period.
(1995 Code, app. 7, sec. 10)
(a) 
Cure period.
The “cure period” for the purposes of this section shall be thirty (30) days from the date the city notifies the recipient of such default in writing at the address stated in the agreement. The parties may mutually agree to extend the cure period.
(b) 
Default and recapture of delinquent taxes.
If the recipient:
(1) 
(A) 
Allows its ad valorem taxes that the recipient owes the city to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest; or
(B) 
Is in default according to the terms and conditions of the agreement; and
(2) 
Fails to cure during the cure period;
the city may terminate the agreement. All taxes previously abated by the agreement will become a debt to the city and will be due and payable not later than thirty (30) days after the city terminates the agreement. The city shall have all remedies for the collection of the recaptured tax revenue as the code provides for collection of delinquent property taxes.
(c) 
Definition of breach.
Any breach by the recipient of the terms and conditions of the agreement, whether material or not, shall be considered a default of the agreement. The recipient must strictly comply with all provisions of the agreement.
(d) 
Discontinuation of operations.
After the recipient finishes building, expanding, or modernizing the property subject to the tax abatement and begins operating that property, any discontinuation of operations for a period of twelve (12) consecutive months for any reason other than fire, explosion, or other disaster shall constitute a default of the agreement.
(e) 
Relocation of operations.
If the recipient, during the duration of the tax abatement time period, decides to relocate to a location outside the designated zone, the city shall have the right to recapture all or a portion of the abated taxes, depending on when the relocation occurs.
(1995 Code, app. 7, sec. 11)
(a) 
Annual appraisal required.
The Travis Central Appraisal District shall annually determine the value of the real and personal property in the zone. Each year, the recipient receiving a tax abatement shall furnish the Travis Central Appraisal District all information as may be necessary for the administration of the tax abatement.
(b) 
Inspections.
The recipient shall provide authority and access to the city to inspect the property improvements to ensure that the recipient made the improvements according to the agreement. The recipient may attend the inspection. The city shall give the recipient twenty-four (24) hours’ notice of the inspection, and shall conduct the inspection so as not to interfere with the business operations or the reasonable safety standards of the recipient.
(1995 Code, app. 7, sec. 12)
(a) 
Approval required.
The recipient may assign the agreement to a new owner or lessee of the same property only if the recipient obtains prior written approval from the city. Within thirty (30) days after receiving the recipient’s request to assign the agreement, the city shall grant or deny in writing the recipient’s request.
(b) 
Refusal of assignment.
The city shall not approve any assignment if the parties to the existing agreement, the new owner, or the new lessee are liable to any jurisdiction for outstanding taxes or other obligations.
(1995 Code, app. 7, sec. 13)
(a) 
Termination.
If the city and the recipient mutually agree that the development or use of property is no longer appropriate or feasible, or that a higher or better use is preferable, the parties may agree in writing to terminate the agreement without any recapture, reimbursement, or further rights or obligations. The city must use the same procedure to terminate the agreement as it used to approve and execute the original agreement.
(b) 
Modification.
The city or the recipient may amend or modify the agreement only by written instrument signed by both the city and the recipient. The amendments or modifications may only contain provisions that could have been included in the original agreement. The city must use the same procedure to modify the agreement as it used to approve and execute the original agreement.
(1995 Code, app. 7, sec. 14)