Tax Abatement Policies

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Lenexa (2007) (joint IRB policy)	Submit application.  Applications receive a preliminary review from the Finance Team; then Governing Body holds public hearing.  Annual filing required after initial filing.	Model must be approved by the City	PILOT may be included	Policy outlines goals:  retention/exp of existing business, diversification, positive impact on City, enhance economic climate, increase tax base, promote redevelopment, complete existing business parks. Standard abatement is 45%, which can be adjusted 5-10% to a max of 55% depending upon meeting outlined goals; term varies depending upon capital investment	Agreement may require meeting average salary targets, targets are not specified in policy; wages are one of the variable adjust-ments to the standard abatement	Applicant must perform at least a Phase I environmental audit.  LEED Certification can generate an additional 5% abatement (maximum of 55% total).	Agreement for PILOT, which may include a clawback provision requiring certain performance as a condition of granting and maintaining the abatement.  Annual review is required to ensure compliance.  Requires $300 filing fee per year.	Re-development is a stated goal, along with completion of exiting business parks	$2,000 non-refundable fee; along with $8,000 retainer to be applied to professional fees $300 filing fee per year upon renewal

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Olathe (2008)	Application form, staff reviews plans and prepares fiscal analysis.    Requires the Chamber and City to contact affected school district reps to discuss application.  Consideration by Council. Olathe’s tax abatement resolution requires annual re-authorization. This is a combination tax abatement and IRB policy.	Required, yet not specified	Maintain existing tax base	General policy is to provide 50% abatement.  May be adjusted up and down 10% based on employmnet,  wages, location, and plan compatibility (added 2008) Ordinance specifies threshold capital investment, normal term of abatement for existing and new business City may require higher design standards when a business receives tax abatement.	Specifies high quality job that pay above average wages	Preference given to LEED certified projects (changed from “may be given” in 2007 to “will be given” in 2008).	Performance agreement is reviewed annually and City has right to audit.  Agreement will require company to utilize solid waste services provided by the City. Clawback added: abatement only granted to level of capital investment made,  if capital investment targets not met, after three years (added 2008). Resolutions for business parks expire after 10 years (added 2008).	Provides up to a 5% abatement adjustment (for total of 55%) for quality high tech and bio-science and office development; provides up to 25% abatement adjustment (for a total of 75%) for projects that locate in downtown target area; also target existing business park area	$1,000 for existing businesses; $2,000 for new businesses; City may waive fees for targeted industry or targeted area.  No annual fee specified.

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Overland Park (1995)	Application form, initial city review, administrative review involving Overland Park Economic Development Council, consideration by the Finance, Admin. & Economic Development Committee of the Council, Council consideration.  Combination policy with economic development revenue bonds.	Resolution includes long list of required items for cost - benefit analysis	In lieu of tax required equal to the amount of the general ad valorem property tax which was paid/ payable for the most recent year (buildings, and/or land)	No consideration of new business if request is for bond issuance of less than $5 M; or for expansion, relocation or retention if less than $2.5 M.  If new, expansion, relocation or retention and less than $30 M, in lieu of tax is not less than 50%.  If project is greater than $30 M and if financial or social benefits substantially outweigh costs, abatement may be more.	None.	None.	Must continue to occupy a minimum of 60% of the leasable square footage of the project during the period of exemption.	None.	$250 plus the cost of any cost-benefit analysis

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Lawrence  (2003) (policy governs all incentives)	Application is submitted and the City Manager makes an initial review then the application is forwarded to the public incentives review committee for recommendation.  Commission makes determination after initial City Commission action, letter of intent and notice and hearing .	Model examines 15 year period and a ration of 1:1.25 or greater is required.  There are a number of standards for the costs and benefits that are outlined in the ordinance.	Is required- equal to the amount of the property tax paid in the most recent year prior to the acquisition	Requirements include business is environmentally sound, small and medium sized, average wage meets or exceeds average in community, all wages are at or above 130% of poverty for family of three, health insurance (or higher wages) and cost-benefit ratio. Guideline of 50% abatement for ten years on investments less than $20 M, over 50% on projects greater than $20 M, local companies receive additional 5% abatement incentive	Wage floor is set at 130% of poverty level for family of three.	Business is environmentally sound.	Performance agreement required.  If wage target or health insurance requirements are not met, business must pay 200% of the difference between actual wages and target wages. Annual review required by PIRC.	None.	$1,000 application fee and $250 annual renewal fee.

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Manhattan (2003)	Application form, cost benefit analysis completed in-house using custom economic development model.  This is a stand-alone tax abatement policy so it does not govern other incentives.	Shows return on investment for each taxing jurisdiction, developed in-house with assistance of economist	May be required.	No threshold, yet ROI model takes into account job creation, wages, and capital investment.	None. Yet quality job creation is listed as a goal along with capital investment, diversification of economy and extent to which project would meet a community need	None.	Job Creation targets are required, and reviewed annually.  Generally, targets are graduated and abatement is in relationship to the target.  Annual certification required and annual report required.	None.	$1,000

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Wichita/ Sedgwick County (Joint policy)	Application, economic impact analysis and return on investment calculated.  Ratio of public benefits to public costs should not be less than 1.3 to one.  This is an economic incentive policy, so includes more than tax abatement.	Economic Impact Analysis and Return on Investment calculation is required.  Wichita State University Center for Economic Development and Business Research	PILOTs may be required along with certain service fee payments which are fees for service from the school district and county fire district.	Generally limited to term of 5 years, plus additional 5 year term subject to review and approval at the end of initial term;  There are tax exemption calculation tables that determine tax abatement percentage based on job creation and capital investment.	No specific wage floor, but wages are considered as part of job creation formula to determine amount of abatement	Environmental questions for relocations in application but no requirements in policy.	A formalized written agreement is required.  Business must meet job creation, capital investment, compliance with wages, compliance with governmental regulations and any other conditions.  Audits may be completed to ensure compliance.	There is a location premium which offers an additional 20% abatement for locating in special re-development areas	$500 application fee, plus cost of cost/benefit analysis, which is $600

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
DeSoto (2006)	Preliminary review by City finance staff, additional information collected, cost-benefit conducted, PILOT written by bond counsel, and recommendation sent to governing body for public hearing.	Model approved by City.	PILOTs required.  Establishes abatement and any requirements.	Generally 50%.  Can be higher depending on growth of firm, sales taxes, citywide need, or retention. New firms at least $5,000,000 in investment.  Expansions at least $1,000,000 in investment.	None.	None.	Part of PILOT.	None.	$2,000 for new, $1,000 for expansion, plus $10,000 held in escrow for fees, also other fees related to review and cost-benefit analysis.

City (date of policy)	Process	Cost/Benefit analysis	In Lieu of Tax Issue	Limitations	Wage Floor	Environment	Performance Requirements	Target Area/Business	Application Fee
Hutchison (2007)	Application required.  Initial review by City-designated person, checks for completeness, requests additional info, forwards it on to governing body with recommendation.	Model approved by City.	PILOTs may be required.  Failure to pay results in loss of abatement.	Up to 100% 10 years for payrolls of at least $250,000 annually and 10 employees.	None, but health care benefits must be provided.	None	None apart from annual review to ensure payroll, employment, and ownership of property are maintained.	None	$500 application fee, $50 annual fee.

Application Fees and Annual Payments*

City	Application Fee	Annual Fee	Total, Annual Fee	Other	Total Payments	Notes
Wichita	$500	$0	$0	$600	$1,100	Other is a cost-benefit analysis fee
Manhattan	$1,000	$0	$0	$0	$1,000
Lawrence	$1,000	$250	$2,500	$0	$3,500
Overland Park	$250	$0	$0	$500	$750	estimate of cost-benefit fee
Olathe	$1,500	$0	$0	$0	$1,500	average between new ($2,000) and expanding ($1,000) businesses
Lenexa	$2,000	$300	$3,000	$0	$5,000	retainer of 8,000 to be applied to professional fees
Junction City	$250	$100	$1,000	$0	$1,250
DeSoto	$1,500	$1,000	$10,000	$1,000	$12,500	average between new ($2,000) and expanding ($1,000) businesses; estimate of cost-benefit fee; escrow of $10,000 also required.
Hutchison	$500	$50	$500		$1,000
Paola	$250	$100	$1,000		$1,250
Average	$875	$300	$1,800	$700	$2,885
Average, Excluding DeSoto	$806	$160	$889	$550	$1,817

*Includes some cities not detailed above