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COMMISSIONERS' COURT AGENDA REQUEST
PLEASE F[JRNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE
REVIEWED BY THE COURT.
MADE BY: Fred Henneke
MEETING DATE: May 10, 1999
SUBJECT: (PLEASE BE SPECIFIC)
OFFICE: County Jude
TIME PREFERRED:
Consider and discuss participation in Tax Abatement Program with City of Kerrville.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
iF PERSONNEL MATTER -NAME OF EMPLOYEE:
County Judge
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
SSI and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:
5:00 P.M. previous Tuesday.

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepazed for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towards you request being addressed at the eazliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
Apr,-19-99 11 :27A KerrvilleMa inStreet 830 896-7747 P_O1
Facsimile Transmittal
Kerrville Main Strut
800 Tuncllon NMy.
Kerrville, Tema 78028
ph-Sao.792-834
faa-830.894.7747
Data: April 19. i199
7udgc Fred NcnnccKc 71,1 ~ - a ~ ~
from: Mindy N. Wendak~
Number of pagta (including this covar): 7
Ylaase call mt following your rtvitw. twill be maKing a prasentation to the KEDF on
Wadncsday conurning the tax abatementa.
ThanKa for your halp.
roqusstcd: ~Yei G No
The Downtown Visitors Gantar and P.atirooms with the new Main Strwi offictt art opcn
at li5 Watsr St. Stop by for a tour of tht new facilities and local art worK Monday through
Saturday , 9:30 a.m. io 5:30 p.m.
Apr,-19-99 11:27A KerrvilleMainStreet 830 896-7747 P.02
CITY OF KERRVILLE, TEXAS
RESOLUTION YO. 99- 163
RESOLUTION ADOPTING GUIDELINES AND CRITERIA
REGARDING ,4GREEMENTS GRANTING PROPERTY TAX
A.EATEMENTS
W'HER£AS. newjobs and investment benefit the local economy, provide needed opportunities.
streuethen the real estate market and generate taa revenue to support Incal services; ar,d
WHEREAS, the .ommunities within Kerr County must compete with other localities across the
nation currently offering tax inducements to attract new business projects and onporumitizs; and
\~'HEREAS. the abatement of property taxes, when offered to attract primary jobs in industries
which brie.; it money from outside a community instead of merely recirculatine doL'ars within a
community. has been shown to be an effective method of enhancing and diversih ing an area economy:
and
W'HF.RFAS, Texas law requires an eligible taxingjurisdiction to establish Guidelines and Crteria
re,arding eligibility for tax ahatement agreements prior [o granting of any tax abateme~c and
W HERE.4S, Citv Coune.il of the City of Kerrville. Texas, finds it to he in the public interest to
adopt ta>: abatement guidelines and criteria;
tiOW', THEREFORE, BE IT RESOLVED 6l' THE CITY COl'NCIL OF THE CITY" OF
KERRVILLE, KERR COWTY'~EXAS:
SECTION ONE. That the Cin~ of Kern•ille.'Texas, hereby declares its election to be cli_zible tc
participate ir. tax abatement under the Texas Property Redevelopment and Tax Abatment Act (Tex. Tax
Cndz. Ch. i 12. as amended,.
SECTION TW"O. That the Guidelines and Criteria for granting tax abatement in reinvestment
zoees in thz City and the City's exvaterritorial jurisdiction, as set forth in Exhibit "A", attached hzrero
and incerpora:ed herein by reference, are hereby adupted by the City of Kzrrvil/fr.
PASSED AND APPROVED ON this the / 3 day of C~'r,-c~ li . A.D., 1999.
ATTEST:
,/ ~ , ~ /i
.Prf,c ~-/
Shei a L. Brand, City Clzrk
r~
~ /~..
Ben R. Low. Mayor
r,;.=.
_`paE~~_.__
Apr-19-99 11:27A KerrvilleMa inStreet 830 896-7747 P.03
APPROVED AS TU FORvI:
~~~ ~~~,
K vin B. Laughlin. C~ y Attorney
.an.,.,.~z a uvnoer,,,~~urc,..n.,o.c, r,, nnn~rvrwnu ~,n-ne wca
7
Apr-19-99 11:28A KerrvilleMainStreet 830 896-7747 P.04
GUIDELINES AND CR[TFRIA FOR TAX
ABATE1v1liNT IN REINVE51 `tENT ZONES
Secliun 1. Abatement Authorized
(ai [n accordance with Chapter ~ 12 of the Texas Tax Code. industrial facilities and commercial
facilities. either new or existing, which intend to make certain capita] expenditures for the purpose of
creating nr expanding [heir business in order to create new jobs in the City, are eligible for
consideration for tax abatements. All other types of facilities shall be ineligible.
(b) Onl7 the cosu ofbuildings, stnacmres, fixed machinery and equipment. site improvements plus
office space and related fixed improvements necessary to the operation and administration of the
facilit}' will be considered as "project costs" for purpose of determining the amount of tax abatement
for which an applicant is eligible- The cost of land, inventories, supplies, tools, fumishinKs and other
forms of movable personal property acquired by the applicant shall not be included as "project costs:
(c) Tax abatement shall ce made only on the assessed value of buildings, structures. fixed
mac:~inery and equipment. site improvements plus office space and related fixed improvements
necessary to the operation and administration of the facilin~. No tax abatement shall be made as to the
assessed value of land. inventories, supplies, tools. furnist!ings and other forms of movable personal
property
(d) I an applicant leases but does not own the facility to which an application for tax abatement
will relate. the Agreement shall be executed with the ovmer of the property on which the facility is
located as well as the lessee~applicant.
(c) fax abatement shall apply to the increased value of the e' igible prope:y only to the extent its
value for that year (usually' determined as of January 1 of each year) exceeds its value fur the year in
which the Agreement is executed. Thus, the first year for which an applicant may take advantage of
a tax abatement will be the calendar year following [he year in which the Agreement was signed. The
year in which the Agreement was executed shall son-r as the base year for determining the amount
of tax abatement for a given year.
(f) Projects for which construction has commenced prior to the date of execution of the
.Agreement shall not be eligible for tax abatement.
;;g) Schedules of tax abatements are as follows
New industry and expansion of old industry- (Reinvestment Zone One):
Exhibit "A"
Apr-19-99 11:29A KerrvilleMainStreet 830 896-7747 P.05
Project Cost or Jobs
(whichever is greater)	Percent Taxes Abated by Year
Pruject Cost	Jobs	1"	2nd	3rd 4th	5th
$100,001	-	SZSQ,000	er	5-15	75%	50%	35% 15°./0	0%
$250,001	-	S40Q,000	or	16-23	75°.'0	55%	40% ~ 25%	10°./0
$460,001		$600,000	or	24-31	75°,/0	60%	45% • 30°,/0	159/u
$660,061		$800,000	ar	~ 32-39	80°,/0	6>%	504/0 ~ 35%	20°,/0
$BOO,OOI	-	$1,000,000	ur	40.47	85%	70°io	>5% 'i 40%	25%
$I,000,U00	-	$1.250,000	or	it 48-55	90%	75°/0	60°./o j 50%	30%
$1,250,001	-	$1,500.000	oc	56-63	95"./0	80"/0	6:0,/0 S5°'o	35"'°
$1.500,001	-	~ 51,750,000	or	64-71	100°/o	B~°~o	70% 60°./0	40°.'u
Any project with tests greater than $1,750,000, or which create more than 71 new .jobs, will be
individually negotiated.
2. Expansion. modernization or new construction, of commercial facilities and structures
In Reinvestment [.one Two ~dre (Jeuual Bu~iucas L3iauic: area uf:l~e Ci:y'~.
Project Cost or Jobs
(whichever is greater)	Percent Taxes Abated by Year
Project Cost	Jobs	1st	2nd	3rd	4th	5th
S35,OO1	-	$100,000	or ~	2-5	75°/n	60°n	50%	40°io	30°./0
$100,001	~	$200,000	or	6-9	75%	65%	55%	45°./0	35%
$200,001	-	$300,600	or	]0-13	80%	70°.'0	604/0	504/0	40%
5300,001	-	$400,000	or	14-17	85°/b	75%	65°./U	55°,/0	45%
$400,001	-	$500,000	or	18-21	90%	BO%	70%	60%	50%
$SOO,OOI		$600,000	or	22-24	95%	85%	75%	65°./0	55°%
$600,001	-	$700,000	or	25-28	100%	90%	804/0	7U"/o	60%
Any project with costs greater than $700,000, or creating more than 28 new jobs created, will he
individuaily negotiated.
2
Apr-19-99 11:3OA KerrvilleMainStreet 830 896-7747 P-06
3. Expansion. modernization or new construction, of commercial facilities and structures
in Reinvestment Zone Three !areas immediately surrounding the Central Business District of the
aty).
Project Cost or Jobs
(whichever is greater)	Percent Taxes Abated by Year
Project Cost	Jobs	1st	2nd	3rd	4th	5th
$35;JO1	$100,000	or	2-5	70%	5U°.o	40°io	30%	20%

$100,001	i
- $200,000	
or	
6-9	
70%	
55°/c	
45°~b	
35%	
25%
$20U,OU1	- ~	$300,ODU	or	10-13	7U°io	60°,%	5(1°io	40%	30%
$300,001	-	$400,000	or	14-17	75%	65°/a	55%	45°/0	35%
$400,001		$500,000	or	] 8-21	80°ro	70%	60%	55°io	404r°
$500.001	-	$600,000	or	22 ?5	85°.~0	75%a	65%	60° 0	50°,%
$6UQ001		$7UU,000	or	26-29	9U%	80%	70%	65"/°	55%
$700,001		$800,000	or	30-33	95%	85%	75%	70°/u	60%
$800,OU1	$900,000	or	34-37	100°ro	90°io	80%	75%	65%
Any project with costs greater than $900,000 or creating more than 37 new jobs created, will be
individually negotiated.
{h) Approved projects that further improve their facilities, or in the case of industry, created more
new jobs than projected, during the term of the Agreement, aze eligible to negotiate a new contract
with the City under the guidelines herein as to the additional improvements. or creation of additional
jobs.
(i) Foc percentage calculations, the number of jobs shall be as documented on June 1 of the
calendar year following the date of execution of the Agreement.
Section 2. Application
{a) Any present or potential owner of taxable property in the incorporated limits or extraterritorial
jurisdiction of the City of Kerrville may request the creation of a reinvestment zone and tax abatement
by filing a written request with the City 'Manager of the City of Kemilie.
{b) The application shall consist of a completed application form and such tinancial and other
information as City may require for evaluating the financial capacity and other factors relevant the
applicant and the proposed project.
Apr-19-99 11:31A KerrvilleMainStreet 830 896-7747 P.07
c) No application shall be considered until tie application is signed by the owner of the proposed
project and, if applicable, the owner of the property where the project will be constructed. and all
requested information has been submitted.
Section 3. Guidelines
(a) The Intergovernmental Advisory Committee for Economic Development, composed of a
representative from each of the taking entities which have authority to impose ati valorem taxes within
the City's incorporated limits and extraterritorial iurisdiction, is in place to create a streamlined
consideration process. The Committee acts as a liaison between the applicant and the agencies so that
the consideration process has greater efficiency. The Committee serves only in an advisory capacity
to its represented taxing entitiee.
(b) Where appropriate, the Plarming and Zoning Commission shall work with the applicant to
ensure that site plans conform to building guidelines and represent an aesthetic appeal which is in
synch with the city and its environment.
(c) Neither a reinvestment zone nor an Abatement Agreement shall be authorized if it is
determined that:
There would be a substantial adverse affect on the provision of government service or
tax base;
2. The applicant has insufficient financial capacity; or
3. The applicant is in violation of codes or other laws.
(d) If an affected taxing entity objets to abatement. the other taxing entities reserve the right to
individually either accept or rejec[ the request.
Section 4. Tax Abatement Agreement
Refore any tax abatement car: become effective, the City of Kerrville and [he owner of the
faciiity and, if different than the owner of the facility, the owner of the property, shall execute a Tax
Abatement Agreement in forth and substance as required by the City of Ketrville. Such Tax
Abatement Agreement must comply in all respects with the requirements of the Texas Property
Redevelopment and Tax Abatement Act (Tex. Tax Code. §§312.001, etseq.).
Section 5. Recapture
(a) [n the event that the facility is completed and begins producing product or service, but
subsequently discontinues producing product or service for any reason for a period of one (1) year
during the term of the Tax Abatement Agreement, the Tax Abatement Agrccment and the further
abatement of taxes shall terminate. The taxes otherwise abated for the calendar year in which
operations terminated shall be paid to the City not later than sixty (60) days after the date of
Air,-19-99 11:33A KerrvilleMainStreet 830 896-7747 P.08
?erminasion. This paragraph shall not apply to Cne cessation of operations resuhing from damage to
the facility caused by tire, ex7losion or other casualty, accident or natural disaster that reasonably
prevents the continuation of operation of the facility.
(h) Should it he determined by City that the other party to a Tax Abatement Agreement is in
default according to the provisiors of said Agreement, the City shall notify the company or individual
ir. aziting at the address stated in :he Agreement, and if such default is not cured within sixty (60) days
ater the date of such notice of defauit ("Cure Period"), Chen the Agreement may be terminated by City
any time after the end of the Cure Period.
(t) In the event that the other pam~ to a Tax Abatement Agreement allows any ad valorem taxes
owed fire Cirv to become delinquent and fails to timely and properly follow the legal procedures fnr
protesting and'or contesting such taxes. or violates any of the provisions or conditions of the Tax
Abatement Agreement and fails to cure during the Cure Period, the Agreement may be immediately
terminated by City and al! taxes' previously abated by virtue ofthe Agreement will he recaptured and
become due and payable not later than sixty (601 days after the date of termination.
(d) Should the other party to a T'ax Abatement Agreement construct only € portion of Lhe agreed
improvements. the contract shall be adjusted according to the schedules herein, and any loss of tax
revenue as a resuh shall be recaptured and paid within sixty (60) days of the contract adjustment.
(ej The provisions of Stare law regarding tax liens and personal liability for taxes arc applicable
to all taxes ultimately imposed pursuant to a Tax Abatement Agreement nr upon default or recapture
as described above.
Section 6. DeRnitions
'the definitions set forth in the Texas Tax Code, as amended, shall apply to Tax Abatement
Agreements and Reinvestment Lones.
"'Agreement".' :4batement Agreement', and "Tax Abatement Agreement', as used herein, shall mean
a municipal tax abatement agreement as described and required by Chapter 3l2 of the Texas Tax
Code.
"Commercial" as used herein shall mean all businesses other than those defined in Appendix "B" of
Title 11, Chapter I of the Code of Clydinances of the City of Kerrville, as amended.
"Industry" or "[ndustrial" as used herein shall mean those businesses defined as "Custom
Ntanufacturing". "Limited Manufacturing" and `'Heavy Manufacturine" ir, Title 11, Chapter 1 of the
Code of Ordinances of the City' of Kerrville, as amended.
"Job" as used herein shall mean a paid, permanent position of employment, in which the employee
works on average 40 hours per every seven day work period as defined by the employer, excluding
emplo}'ee vacations 2nd holidays as determined by the employer.