§ 30-5. Guidelines and criteria governing tax abatements.
[Adopted.] In accordance with the requirements in section 312.002 of the Texas Tax Code, the city hereby adopts the "Guidelines and Criteria Governing Tax Abatements by the City" attached hereto as exhibit "A" and incorporated for all purposes.
No limits. Adoption of the guidelines and criteria stated herein above does not:
(1)
Limit the discretion of the city council to decide whether to enter into a specific tax abatement agreement;
(2)
Limit the discretion of the city council to delegate to its employees the authority to determine whether or not the city council should consider a particular application or request for tax abatement; or
(3)
Create any property, contract, or other legal right in any person to have the city council consider or grant a specific application or request for tax abatement.
Effectiveness of guidelines. The guidelines and criteria adopted herein shall be effective for two (2) years from the effective date of this section [March 7, 2003]. During that period, the said guidelines and criteria governing tax abatements may be amended or repealed only by a vote of three-fourths (¾) of the members of the city council.
Guidelines and Criteria Governing Tax Abatements by the City
The Basic FormulaNumber of New Jobs Required Additional Investment Percent of Abatement Term 50—100 $1.0 mill.—$2.5 mill. 25 5 years 101—150 Over $2.5 mill.—$5.0 mill. 50 5 years 151—200 Over $5.0 mill.—$10.0 mill. 75 5 years Over 200 jobs Over $10.0 mill. 100 5 years The basic requirements of tax abatement agreements.
(a)
They must contain the provision that companies shall pay employees wages at a minimum level which is equal to two dollars ($2.00) above the U.S. minimum wage in effect at the time of the agreement. Additional compensation, such as commissions and mileage, will be taken into consideration and will be included in the wages. However, overtime will not be considered. Companies shall also provide all employees with health benefits.
(b)
They must be offered to local companies for the expansion of existing facilities as well as new facilities.
(c)
They must be "performance-based" to provide cost benefit advantages to Laredo and Webb County.
(d)
They must not permit outside companies to unfairly compete with local companies in the same business in the local market; competing companies may be considered if seventy-five (75) percent of their customers are outside Laredo/Webb County, or if any other measures are offered which are judged to make the companies compatible with Laredo interests.
(e)
They must be negotiated quickly and in good faith by representatives of all concerned local entities.
(f)
They must be contractual and fully and accurately disclosed to the public.
(g)
The contracts must be effectively protected by cancellation, recalibration and "claw-back" provisions which would insure the return of the community's funds if the companies default on their part of the agreement. There should however, be no levy of penalties above repayment of actual local costs.
Type of industries. In keeping with the broad-based approach to economic development, agreements will not be restricted to any particular type of industry. Preference will, however, be given to manufacturing and any other type of industry which provides relatively higher wages. In keeping with obtaining the highest cost-benefit, tax abatements will be granted on the basis of (a) new jobs and (b) additional investments, for a maximum term of five (5) years.
Other considerations. Depending upon the applicant, tax abatement agreements may be negotiated with consideration of cost benefit, company's financial statements or D&B rating, past business history, nature of the production process, environmental hazards, cost breakdown of the investment into land, building, equipment, probable project status at the end of five (5) years, participation in JTPA programs, percent of hiring of local workers, and benefits to be paid to local workers.
(Ord. No. 2003-O-090, §§ 1—3, Exh. A, 3-7-03)