|The Guidelines and Criteria Governing Tax Abatement for Commercial Projects in Designated Enterprise Zones in the City of Lubbock have expired, and in order for the City of Lubbock to continue participating in tax abatement, new guidelines have to be adopted. The proposed guidelines are the same as the prior adopted guidelines.
During the 86th Regular Session of the Legislature, H.B. 3143 was passed and signed by the Governor on June 14, 2019. This bill added a requirement in the Tax Code Section 312.002(c-1) for the governing body of a taxing unit to hold a public hearing regarding the proposed adoption, amendment, repeal, or reauthorization of tax abatement guidelines, and criteria at which members of the public are given the opportunity to be heard. This public hearing satisfies the requirement.
Below is a summary of the proposed commercial tax abatement guidelines:
General Purpose: To promote high quality commercial development and improved quality of life in designated enterprise zones
Maximum Term: 5 Years
Eligible Property: Improvements to Real Property and Tangible Personal Property
Non-Eligible Property: Real Property; inventories or supplies; tools; furnishings and other forms of movable personal property; vehicles; aircraft; housing; boats; property owned by the State of Texas or any State agency; and, property owned or leased by a member of the affected Jurisdiction that did not have an active tax abatement in place before they became a member of the governing body or commission
Types of Companies: Retail, Service and Office
Location: Allowed only in the following designated enterprise zone areas
EZ Block Groups:
Census Tract 2.01 Block Groups 1 and 2
Census Tract 2.02 Block Group 1
Census Tract 3.01 Block Groups 1, 2 and 3
Census Tract 3.02 Block Groups 1, 2, 4, and 5
Census Tract 6.07 Block Groups 1 and 2
Census Tract 9.00 Block Groups 1 and 4
Census Tract 10.00 Block Groups 1, 2 and 3
Census Tract 12.00 Block Groups 2 and 3
Census Tract 13.00 Block Groups 1, 2, and 3
Census Tract 14.00 Block Groups 1, 2, 3, 4, and 5
Census Tract 23.00 Block Groups 1 and 2
Census Tract 24.00 Block Groups 1, 3, 4, and 5
Other Eligibility Requirements: To qualify for commercial tax abatement, a company must modernize or expand an existing facility or construct a new facility, and must clearly add to the Lubbock economic base. The company must show that if the company is qualifying on the jobs requirement, that the jobs being proposed will not simply displace other similar jobs in the community.
(a) $100,000 investment, or
(b) 10 new permanent jobs and at least 30% of the business’ new employees in the zone are residents of any zone within the governing body or bodies’ jurisdiction.
Qualifiers: Approving the guidelines does not obligate the jurisdiction to provide tax abatement to any applicant.
Variances: The City Council can vary any of the requirements not required by statute, with a three-quarter vote.
If approved, the effective date of Commercial Tax Abatement guidelines will be February 11, 2020.