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Regular City Council Meeting
Public Hearing - Finance:
Hold a public hearing regarding the proposed adoption of the Guidelines and Criteria Governing Tax Abatement for Industrial Projects in the City of Lubbock, and consider a resolution.
The Guidelines and Criteria Governing Tax Abatement for Industrial Projects 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 industrial tax abatement guidelines:
General Purpose: To promote high quality development in all parts of the City
Maximum Term: 10 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; hotel accommodations; motel accommodations; retail businesses; 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.
Types of Companies: Advanced Technologies and Manufacturing; Manufacturing; Research and Development; Medical Services (as defined in Section II Definitions); Warehouse/Distribution; Corporate Headquarters of a Regional/National Service Center; Information and Data Centers; or, the project is not included as a target industry, but has the potential of generating additional significant economic development opportunities to Lubbock.
Location: Allow industrial tax abatement anywhere within the jurisdiction in a reinvestment zone
Other Eligibility Requirements: To qualify for industrial tax abatement, a company must modernize or expand an existing facility or construct a new facility and be a producer, manufacturer, or distributor of goods and services, of which 50% or more are distributed outside of Lubbock County.
The project will add at least $1 million in real property improvements, or $2 million in new personal property, or 25 new permanent jobs, if the facility is a new company to Lubbock.
The project will add at least $500,000 in real property improvements, or $1 million in new personal property, or 15 new permanent jobs, if the facility is an existing company.
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 the Industrial Tax Abatement guidelines will be February 11, 2020.
D. Blu Kostelich, Chief Financial Officer
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