ORDINANCE NO. 7706
An Ordinance Establishing the Policy and Procedures for Tax
Abatements and Incentives for Economic Development for the City of Lawrence,
Kansas; Establishing Requirements for Companies Receiving Tax Abatements;
Repealing Resolution No. 6343
Be It Ordained By the Governing Body of The City of
Lawrence, Kansas:
SECTION
1. Purpose
2. General Objective
3. Economic Development Objective
4. Requirements
for Consideration of a Tax Abatement
5. Wage Floor & Health Insurance
Requirements
6. Legal Authority
7. General Procedure
8. Jurisdiction
9. Nominal Tax Determination
10. Minimum Payment in Lieu of Taxes
11. Special Assessments
12. Pirating
13. "Public Good" Requirement
14. Standards
for Costs and Benefits
15. No Unfair Advantage
16. Amount of Tax Exemption
17. Application Required
18. Application and Renewal Fees
19. Initial Review Procedure
20. Public Incentives Review Committee
21. Initial City Commission Action
22. Letters of Intent
23. Notice and Hearing
24. Performance Agreement & Enforcement
25. Annual Review for Compliance
26. Transfer of Ownership or Use
27. Distribution of Revenue
28. Exemption Ordinance
29. Exemption Forms
30. Other Public Subsidies & IRBs
31. No Retroactive Application
32. Definitions
33. Repeal of Resolution No. 6343
Section 1. Purpose. The purpose of this ordinance is to establish the
official policy and procedures of the City for the granting of property tax
exemptions for real and personal property being added to the tax rolls by
“Kansas basic industry” in accordance with the provisions of Section 13 of
Article 11 of the Constitution of the State of Kansas and the provisions of
K.S.A 12-1740 et seq. and K.S.A 79-201a.
In addition, certain requirements of this ordinance shall apply to the
granting of certain public subsidies by the City as further set forth in
Section 30.
Section 2. General Objective. The
securing of private economic investment to broaden the tax base is an important
current and long term objective of the City. When fiscal benefits exceed fiscal
costs, a broadened tax base provides local government with the financial
resources to maintain and enhance the services available to all residents. The
creation of job opportunities for Douglas County residents is also an important
current and long-term objective of the City. The quality of life for all area
residents is enhanced when good job opportunities are available.
The
granting of property tax exemptions on new real and personal property is one of
the incentives available under Kansas law to help achieve these public
objectives. This ordinance establishes the policy, procedures and requirements
to govern the fair, effective and judicious use of the power to grant such
exemptions.
Because of
Lawrence’s assets and the desire of area residents to plan for the future and
retain a community that is different from other growing suburban areas, a
property tax exemption may not be offered to every firm that is eligible under
state statutes. Instead, property tax exemptions will be targeted toward
businesses meeting the objectives defined in Section 3.
Section 3. Economic Development
Objectives. The City
works in cooperation with Douglas County and the Lawrence Chamber of Commerce
to achieve the general objectives outlined in Section 2. This partnership
enables the community to maximize its resources and to develop a consensus
regarding the kind of economic development that best advances the interests of
the entire community.
All of the
partners in this effort share a commitment to:
a) encourage existing industry to
expand
b) assist new business start-ups
c) recruit new companies from
out-of-state and internationally
d) encourage high technology and
research based-businesses
e) encourage training and
development of Lawrence area employees
f) encourage the location and
retention of businesses which are good “corporate citizens” that will add to
the quality of life in Lawrence through their leadership and support of local
civic and philanthropic organizations.
While it
is the new companies from out-of-state that typically generate the most
publicity, it is the policy of the City, County, and the Chamber to place a
high priority on the retention and expansion of existing businesses.
The City’s
role in this economic development partnership involves:
a)
providing the necessary zoning and infrastructure improvements that are
required to create new jobs and new investment; and
b) providing the personal assistance and in some cases the
incentives including a property tax exemption, that are required to compete for
new start-up businesses, expansions of existing businesses and relocations from
out-of-state.
All three
partners believe that Lawrence and Douglas County should be selective as to the
kinds of businesses that are recruited and assisted.
Section 4.
Requirements for Consideration of a Tax Abatement The City
shall only grant a tax abatement to a business which meets the legal
requirements for a tax abatement and which indicates in their application that
they will fully comply with the following qualifying requirements:
a) the business is environmentally
sound.
b) the business is small and medium size...to avoid a
situation where the City becomes dependent on one industry, and to maintain the
character of the community.
c) the business pays all employees in the abated project an
average wage per employment category that meets or exceeds the average in the
community as determined annually by the Kansas Department of Human Resources
Wage Survey.
d) the business pays all covered employees a wage, at or
above, an amount which is equal to one hundred thirty percent (130%) of the
federal poverty threshold for a family of three (3), as established by the
United States Department of Health and Human Services, as further set forth in
Section 5 of this ordinance
f) the proposed project and tax abatement results in a
combined positive cost:benefit ratio of 1:1.25 or greater over a 15 year period
as determined by the City adopted econometric model to keep the overall
property tax rate as low as possible.
Section 5. Wage Floor and Health Insurance Requirements. The requirements of Section 4, subsections d
and e, may be referred to as the wage floor and health insurance requirements
of this Ordinance. The wage floor
requirements shall be annually adjusted pursuant to the release of statistical
information from the federal government, and the City shall notify in writing
the businesses receiving a tax abatement, which are affected by the wage floor requirements. For 2003, the wage floor shall be $9.53 per
hour. These requirements shall apply to all employees of a business receiving a
tax abatement at the specific real estate receiving the tax abatement, with the
exception of a business that has Lawrence operations prior to the granting of a
tax abatement in which case the wage floor and health insurance requirements
shall apply to all employees in the abated project.
The wage floor and health insurance requirements of this
Ordinance shall not apply to the following employees:
a) employees employed in a bona fide or certified job
training program for no more than 60
calendar days (once per employee);
b) temporary
employees working fewer than 100 hours per calendar year;
c) employees with the status of student seasonal workers
hired for not to exceed ninety calendar days.
d) employees of not-for-profit organizations.
Covered employees would not include subcontractors whose
work is only incidental to plant operations. Suppliers, raw goods/material
suppliers, landscape companies, construction contractors, delivery employees
shall not be covered employees.
The wage floor and health insurance requirements shall not
apply to employees covered by a collective bargaining agreement that provides a
wage higher than the requirements of this ordinance.
Section 6. Legal Authority. The governing bodies of Kansas
counties and cities may exempt certain property used by Kansas basic industry
for economic development purposes from taxes for a maximum of ten (10) years,
in accordance with the provisions of Section 13 of Article 11 of the Kansas
Constitution and the provisions of K.S.A 12-1740 et seq. and K.S.A 79-201a,
subject to such limitations or prohibitions as may be enacted by the
legislature. This authority is discretionary with the City, and the City may
provide for tax abatements in an amount and for purposes more restrictive than
that authorized by the Constitution or any such legislation. Pursuant to its
home rule and statutory powers, the City may:
a) require
the owners of any property for which an abatement is requested to provide
certain information;
b)
condition the granting of an abatement to an agreement providing for the
payment of in lieu charges or taxes; and
c) require
the payment of initial application and annual renewal fees reasonably necessary
to cover the costs of administration.
Section 7. General Procedure. The following basic procedure
shall govern the issuance of tax abatements within this City:
a) the applicant business shall apply for a tax exemption by
filing a written application as provided in Section 17. Only new real and
personal property that is not already on the Douglas County tax rolls shall be
eligible;
b) the City Commission shall then determine whether the
requested tax abatement
1) may be lawfully granted, and
2) should be granted, with the amount thereof to be
determined later.
c) the
amount of the tax abatement will be determined in accordance with Section 16 of
this Ordinance
d) Notice
of the City’s intent to issue a tax abatement will be submitted to the State
Board of Tax Appeals for final approval.
If such approval is denied the abatement cannot legally be awarded.
e) if the business fails to pay the in lieu tax payments, as
may be required as a condition of the granting of an abatement, or fails to
provide the reports or other information requested by the City, the City may
revoke, or modify the abatement.
Section 8. Jurisdiction. The City shall grant tax
abatements only as to property located within the City. The City will advise
Douglas County and appropriate school districts on all applications. The City
encourages the Board of County Commissioners to advise the City as to
applications outside the City and within the three-mile area.
Section 9. Nominal Tax
Determination. All
tangible property of a business receiving a
tax abatement under this ordinance shall be annually assessed by the County
Appraiser in the same manner as if it were not exempt, but the amount exempted
shall not be placed on the assessment rolls. The amount of the property taxes
which would be payable shall also be determined annually by the County Clerk
and Treasurer, in the same manner as if the property were not exempt. Separate
assessment and tax calculations shall be made for the
a) land,
b) the
improvements thereon, and
c) for any
tangible personal property associated with, the business.
The County
Clerk and Treasurer are requested to provide the City with this information as
early as possible, but not later than November 15 of each year.
Section 10. Minimum Payment In Lieu of Taxes. Any applicant receiving a tax
abatement pursuant to this ordinance shall be required to make a minimum payment in lieu of taxes. The minimum
payment shall equal the amount of property tax paid or was payable for the most
recent year prior to the acquisition of the property by the new business or the
construction of new buildings or added improvements to buildings. The purpose
of requiring a minimum payment in lieu of taxes is to provide the City, the
County, the School District and any other taxing jurisdictions affected by the
abatement with as much tax revenue from the exempted property as was received
prior to the abatement. ~vv
Section
11. Special Assessments. Any tax abatement granted for real
property under this ordinance shall not affect the liability of such property
for any special assessments levied or to be levied against such property.
Section
12. Pirating. It is the
intent of the City, the County and the Chamber to avoid participation in
“bidding wars” between Kansas cities or areas competing for the relocation of
an existing Kansas business through attempts to offer the largest tax incentive
or other public inducement, which is detrimental to the state’s economy and the
public interest. It is the policy of
the City to discourage applications for tax abatements, or to grant tax
abatements which deliberately encourage and cause the pirating of business from
another Kansas community to this community.
This policy does not preclude the providing of information to companies
that inquire about Lawrence or are seeking an expansion rather than a
relocation. It also does not preclude the granting of a tax abatement in those
situations- where:
a) the company has already made a
decision to relocate or expand; or
b) the company is seriously
considering moving out of state.
Section
13. “Public Good” Requirement. The basic principle from which the City operates is that
private business should not be subsidized with public funds, the indirect
consequences of tax abatements, unless the public good expressed in Section 2
of this ordinance is served.
Section
14. Standards for Costs and Benefits. The City, in determining whether a tax abatement should be
granted; shall conduct a cost benefit analysis which will consider various
factors including, but not limited to, the following:
a) the
increase in appraised valuation of the property;
b) the
sales and income tax revenue which may result;
c) the
number of new jobs, the earnings and the benefits that will be provided;
d) the
expenditures that local government will need to make to provide streets and
utilities, police and fire protection and other services to the company itself;
e) the
expenditures for police and fire protection, recreation, street maintenance,
social programs, etc. for the new residents associated with the company;
f) the
expenditures for capital investments (library, streets, airport, sewer plants,
etc.) for the new residents associated with the company;
g) the
expenditures by the local school district to provide the facilities and to
educate the students of the new residents associated with the company;
h) other
public or private expenditures associated with attracting the new company;
i) the
degree to which the business improves the diversification of the economy;
j) the
kinds of jobs created in relation to the types of skills available from the
local labor market;
k) the
degree to which the ultimate market for the business products and services is
outside the community, recognizing that outside markets bring “new money” to
the local economy;
l) the
potential of the business for future expansion and additional job creation;
m) the beneficial
impacts the business may have by creating other new jobs and businesses,
including the utilization of local products or other materials and substances
in manufacturing;
n) the beneficial economic impact the business will have on
a particular area of the City, including designated enterprise zones and areas
of needed revitalization or redevelopment; and
o) the compatibility of the location of the business with
land use and development plans of the City and the availability of existing
infrastructure facilities and essential public services.
Section 15. No Unfair Advantage. A tax abatement will not be
granted if the abatement would
create, in the judgment of the City Commission, an unfair advantage for one business over another Lawrence
business that competes for the same consumer market within the city.
Section 16. Amount of Tax
Exemption. In determining the actual amount of tax abatement to be granted to Kansas
basic industries that meet the Economic Development Objectives of Section 3 of this
ordinance and the other requirements of this ordinance, the City shall use as a
guideline the following basic schedule:
a) fifty percent (50%) property
tax abatement for ten years on investments less than $20 million in adjusted
2001 dollars;
b) when the
investment under consideration exceeds $20 million dollars in adjusted 2001
dollars the City Commission may consider a property tax abatement that exceeds
fifty percent (50%);
c) a company that has been on the Douglas County property
tax rolls for at least three (3) years shall be eligible for an additional five
percent (5%) tax abatement for a new project; and
d) the governing body may vary the amount and duration of
the abatement provided the net abatement to a business shall not reduce the net
tax revenues as would be received pursuant to the above schedules to the local
taxing units over ten (10) years. It
shall be the policy of the City to approve a tax abatement for the real
property and personal property portion of a project if the project meets the
requirements of this ordinance.
The
abatement term for projects considered under authority of Section 13 of Article
11 of the Kansas Constitution shall begin in the calendar year after the
calendar year in which the business commences its operations. The abatement term for projects considered
under authority of K.S.A. 12-1740 et seq. and K.S.A. 79-201a shall begin in the
calendar year after the calendar year in which the bonds are issued.
Section 17. Application Required. The City will not consider the granting of any tax abatement unless
the business submits a full and complete application, and provides such
additional information as may be requested by the Governing Body. The City
Manager is hereby authorized and empowered to prepare a standard application
form which, upon completion, will provide the Governing Body with adequate and
sufficient information to determine whether a tax exemption should be granted
and the amount thereof. The accuracy of the information provided in the
application shall be verified by the applicant. Any misstatement of, or error
in fact, may render the application null and void and may be cause for the
repeal of any ordinance adopted in reliance on said information.
Section 18. Application and
Renewal Fees. Any
business requesting a tax abatement pursuant to this ordinance shall pay to the
City an application fee of 250)
$1,000.00 which shall be submitted at the same time the application form
required in Section 17 is submitted. In
addition, any business which has been granted a tax abatement shall pay an
annual renewal fee in the amount of $250.00.
In addition to the application and renewal fees, the business seeking a
tax abatement shall be responsible for any City costs associated with the
retention of bond counsel, attorney costs, or auditing costs associated with
abatement approval and review, auditing or industrial revenue bond issuance.
Section 19. Initial Review
Procedure. Upon
receipt of the completed application form and the required fee, the City
Manager shall determine:
a) whether
the application is complete and sufficient for review; and
b) whether the applicant’s business is eligible for an
abatement under the Kansas Constitution, this ordinance or any other applicable
laws. If the application is incomplete, the City Manager shall immediately
notify the applicant, noting the need for such changes or additions as are
necessary. If questions arise as to whether the business is legally eligible
for an abatement, the matter shall be referred to the City Attorney, who shall
consult with the applicant business. If the application is found complete and
is for a purpose which appears to be authorized by law, the City Manager shall
so notify the Public Incentives Review Committee.
Section 20. Public Incentives
Review Committee. There is hereby created a Public Incentives
Review Committee, which shall be composed of:
a) the
Mayor, or the Mayor’s designee who shall serve as chair,
b) another
member of the City Commission appointed by the Mayor with the consent of the
City Commission,
c) a
member of the Douglas County Commission appointed by the County Commission,
d) a
member of the Lawrence Public Schools U.S.D. 497 School Board or a School Board
representative appointed by the School Board,
e) a
professional financial analyst appointed by the Mayor and City Commission for a
three year term;
f) the
Chair of the Lawrence/Douglas County Economic Development Board, and
g) a resident of Lawrence appointed for a three year term by
the Mayor and the City Commission.
City, County, and School District staff shall provide technical and
policy advice to the Committee. The
Committee shall meet on call of the Mayor. The purpose of the Public Incentives
Review Committee shall be to:
1) receive and review requests and applications for tax
exemptions,
2) to gather and review such additional information as may
be deemed necessary to determine if the company meets the target objectives of
Section 3,
3) to conduct preliminary negotiations with the applicant
business, as appropriate,
4) to review the City’s yearly tax abatement report and
compliance with performance agreements, and
5) to make such recommendations to the City Commission. ew
Public Incentives Review Committee records, including applications for tax
exemptions, may be withheld from public disclosure under the Kansas Open
Records Act as provided for under subsections (20) and (31) and other
subsections of K.S.A. 45-221, but shall be available for public inspection when
otherwise required by law. The
Committee is authorized to issue administrative letters of finding which shall
not be binding on the City Commission, and may be superseded by any action by
the City Commission.
Section 21. Initial City
Commission Action. Upon
receiving the recommendations of the Public Incentives Review CommiCommittee,
the City Commission shall first determine whether to reject the requested
exemption or to further consider the request.
Upon a favorable vote for further consideration, the City Commission may
issue a letter of intent as provided by Section 22 and schedule a public
hearing thereon.
Section 22. Letters of Intent. Upon receiving the recommendations
of the Public Incentives Review Committee, the City Commission may issue a
letter of intent, setting forth in general terms its proposed plans for
granting a tax abatement and any conditions thereto. Such letters of intent
shall be issued only as an expression of good faith intent and shall not in any
way bind the City Commission to the granting of an abatement. Such letters of intent shall expire six
months after issuance, but may be renewed.
A public hearing shall not be required prior to the issuance of letters
of intent. No elected or appointed officer,
employee or committee of the City, Chamber employee, or other public or private
body or individual, shall be authorized to speak for and commit the City
Commission to the granting of a tax abatement.
Letters of intent issued by the City Commission shall supersede any
letters issued by the Public Incentives Review Committee.
Section 23. Notice and Hearing. No tax abatement shall be granted by the City prior to a public
hearing thereon. Notice of the public hearing shall be published at least seven
days prior to the hearing in the official City newspaper, giving the time and
place, and the hearing may be held at a regular or special meeting of the City
Commission. The City Clerk shall
thereupon notify the Board of Douglas County Commissioners, the Superintendent
of appropriate school districts, and the clerk of any other taxing
jurisdiction, excluding the state, which derives or could derive property taxes
from the affected business, advising them of the scheduled public hearing and
inviting their review and comment. Upon
request, the City Clerk shall provide any such public agency with a copy of the
application which shall remain confidential unless released by the City
Commission or the Public
Incentives Review Committee. The applicant business shall be invited, but
not required, to attend the public hearing.
Section
24. Performance Agreement and Enforcement.
a) Any tax abatement granted pursuant to this ordinance
shall be accompanied by a Performance Agreement between the applicant and the
City. The Performance Agreement shall
include provisions to ensure compliance with the requirements of this
ordinance, and appropriate consequences in the event of non-compliance.
b) the Performance Agreement shall indicate that if the
business receiving tax abatement does not comply with the wage floor and health
insurance requirements of this Ordinance, then the business shall be required
to pay, on an annual basis, to the City
a certain amount as established below:
The business shall
pay to the City, by May 20, an amount
of money equal to two hundred percent (200%) of the difference between the
actual wages paid to employees covered by the wage floor and health insurance
requirements and the amount of wages that should have been paid to the same
employees to comply with the wage floor and health insurance requirements of
this ordinance. This payment to the
City may not exceed the annual value of
the abated property taxes to the business.
Upon City receipt of the payment from the business, the payment shall be
disbursed as follows: half of the payment amount shall be sent to eligible
employees or former employees of the business in amounts equal to the
difference between their actual wages/health insurance benefits and the
wages/health insurance benefits required by this ordinance; the other half of
the payment shall be retained by the City and used, pursuant to City Commission
direction, for economic development
purposes, including employee training programs.
c) the Performance Agreement shall also require the
monitoring of the average wage criteria of the Kansas Department of Human
Resources, the number of jobs provided by the employer, and the capital
investment projections set forth in the original application. The provisions concerning the consequences
for non-compliance with the wage floor and health insurance requirements shall
not apply to other areas of non-compliance of a tax abated business, rather any
non-compliance shall be reviewed by the Public Incentive Review Committee, and
as appropriate, the City Commission. Each tax abatement shall be annually
reviewed by the Public Incentives Review Committee, as set forth in Section 25,
which shall forward a copy of the annual review and appropriate recommendations
to the City Commission. The City
Commission shall receive the annual review report, and if the City Commission
determines that a business or project is not in compliance with the provisions
of the Performance Agreement, then the tax abatement may be modified pursuant
to the Performance Agreement as the City Commission deems appropriate. The County Appraiser and the State Board of
Tax Appeals shall be notified of appropriate actions.
Section 25. Annual Review for Compliance. All tax abatements granted shall
be subject to an annual review by thetrative
Public Incentives Review Committee to ensure that the ownership, use of
property,nd and the economic performance of the business, including the
capital investment, employment, and wages, are pursuant to requirements and
criteria of this ordinance, the application for tax abatement, and the
conditions of the granting of the tax abatement. The review shall also include a comprehensive review of the
entire abatement period for the business, including milestones and project
phases for the business. satisfied. The annual
review shall provide an opportunity for the company receiving the abatement to
describe their achievements, especially in the areas of environmentally sound practice,
community engagement and services, and job training. If the
business:
a) no
longer qualifies for a tax abatement pursuant to law or this policy;
b)
substantially fails to meet the expectations set forth in the application for a
tax abatement, including failure to meet employment, wage, or capital
investment plans in the application; or
c)
substantially fails to meet the criteria or objectives of this ordinance; the
City Commission, after notice and a public hearing may modify the exemption by
ordinance.
Each
business receiving a tax exemption shall be required to complete an annual
report by March 1. The information in the report will cover the time period of
January 1 through December 31 of the previous year. The annual report will be
reviewed by the Public Incentives Review Committee and presented to the City
Commission by May 1.
By May 1
of each year, the Public Incentives Review Committee shall also present an
annual report to the City Commission that lists all of the property tax
exemptions that remain in effect at that time.
The annual report shall include information regarding when the exemption
was granted, when the exemption expires, current property taxes paid for the
property, in lieu of tax payments, amount of any industrial revenue bonds
issued, the assessed value of the property, number of employees, salary and
payroll of employees, and any additional information concerning the operation
of the business receiving the exemption, and other information as requested by
the City Commission.
The Public
Incentives Review Committee shall monitor compliance for the wage floor and
health insurance requirements. If a
business fails to comply with the wage floor and/or health insurance
requirements, the business shall provide a written explanation and a plan for
correcting the non-compliance. This
information shall be contained in the report submitted by the Public Incentives
Review Committee to the City Commission.
If the business is in non-compliance with the wage floor and/or health
insurance requirements for two (2) consecutive years, the City Commission shall
take appropriate actions to completely remove the tax abatement for the
business, unless the City Commission, by a super-majority vote (currently four
(4) votes), determines that extraordinary circumstances exist and the tax
abatement should be allowed to continue.
The
failure of a business to provide accurate and timely information to the City in
the preparation of the annual report shall be grounds for the modification or
repeal of the tax abatement. The City
shall retain a qualified third party consultant to assist the preparation of
any report and to maintain the confidentiality of the personnel and wage
records of a business.
A business
that is required to comply with the wage floor and health insurance
requirements of this ordinance shall maintain payroll records for covered
employees and shall preserve them for a period of two (2) years. The records shall contain:
a) the
name and address of each covered employee;
b) the job
title and classification;
c) the
number of hours worked each day;
d) the
gross wages earned and deductions made;
e) a
record of health insurance payments made by the employee and the employer; and
f)
additional information necessary to establish that an employee is exempt from
the wage floor and health insurance requirements established in Section 5.
A copy of
these records shall be provided to the third-party auditor to review and
determine compliance with the requirements of this ordinance. Members of the Public Incentive Review
Committee, City staff selected by the City Manager, or the City Commission may
review these records in the custody of the third-party auditor but may not do
anything to remove or destroy their confidential nature.
Section 26. Transfer of Ownership
or Use. No abatement or tax incentive granted by the City shall be
transferred as a result of a change in the majority ownership of the
business. Any new majority owner shall
file a new application for a tax abatement.
Further, the City shall be notified by the business of any substantive
change in the use of a tax exempt property.
Section 27. Distribution of
Revenue. The granting
of tax abatement by the City Commission is hereby declared to be a contract
under the provisions of K.S.A. 12-147.
The in lieu of taxes payment which may be required of a business granted
a tax abatement under this ordinance shall be paid to the County Treasurer,
with notice of the amount and date paid provided to the City. The County Treasurer is directed to
apportion the payment to the general fund of all taxing subdivisions, excluding
the state, which levies taxes on property where the business is situated. The apportionment shall be based on the
relative amount of taxes levied, for any and all purposes, by each of the
applicable taxing subdivisions.
Section 28. Exemption Ordinance. The City Clerk shall
provide a copy of the ordinance, as published in the official city newspaper,
granting an abatement from taxation to the applicant for use in filing an
initial request for tax exemption as required by K.S.A. 79-213, and by K.S.A. 79-210 for subsequent years.
Section 29. Exemption Forms. A copy of the exemption
application required by K.S.A. 79-213 and 79-210, and the statement required by
K.S.A. 79-214 for the cessation of an exempt use of property, shall be filed
with the City Clerk by the property owner.
Section
30. Other Public Subsidies and
Industrial Revenue Bonds. A business receiving a public subsidy for economic development
purposes, as defined by this section, that is not in the form of a tax
abatement, shall enter into a Performance Agreement with the City and shall be
required to comply with the wage floor and health insurance requirements of
this ordinance. A public subsidy may
include the granting of public funds or a public good to a business for the
sole purpose of inducing the business to relocate in Lawrence or to remain in
Lawrence for economic development purposes.
Examples of a public subsidy for economic development purposes in the
form of public funds or a public good, include, but are not limited to, the
construction of public infrastructure for the sole benefit of a business,
without a general City at-large infrastructure benefit; the donation of public
land or the reduction of rent for the use of City land or a City building, the
reduction or elimination of required City fees, charges, etc. A public subsidy below an annual amount of
$100,000 shall not require compliance with the provisions of this
ordinance. The provisions of this
ordinance shall not apply to a business receiving industrial revenue bonds,
unless the industrial revenue bond recipient is receiving a tax abatement for
economic development purposes.
Section
31. No Retroactive Application.
This ordinance shall only apply to tax abatements approved after the
adoption of the ordinance, and shall not apply retroactively to previously
approved abatements and projects. Tax
abatements granted pursuant to earlier City policies and procedures shall be
governed by the City policy and procedures in effect upon the initial granting
of the abatement.
Section 32. Definitions. For the purpose of this Ordinance,
in application to the City of Lawrence, the words or phrases as used in this
Ordinance shall have the following meaning:
a) “Applicant” shall mean and include the business, property
owner or owners, and their officers, employees and agents.
b) “Associated therewith” as used with respect to tangible
personal property shall mean being located within, upon, or adjacent to
buildings or added improvements to buildings.
c) “Commenced operations” shall mean the start of the
business activity housed in the building for which a tax exemption is
requested.
d) “Economic development purposes” shall mean the expansion
or the establishment of a new business enterprise which:
1) is or proposes to be located or principally based in
Kansas; and
2) can provide demonstrable evidence that:
3) it is or will be primarily
engaged in any one or more of the Kansas basic industries: or
ii) it is or will be primarily
engaged in the development or production of goods or the provision of services
for out-of-state sale; or
iii) it is or will be primarily
engaged in the production of raw materials, ingredients or components for other
enterprises which export the majority of their products; or
iv) it is a national or regional
enterprise which is primarily engaged in interstate commerce; or
v) it is or will be primarily
engaged in the production of goods or the provision of services which will
supplant goods or services which would be imported into the city; or
vi) it is the corporate or
regional headquarters of a multistate enterprise which is primarily engaged in
out-of-state industrial activities that take place outside of Lawrence.
(e) “Kansas basic industry” shall
mean:
1) Agriculture;
2) mining;
3) manufacturing;
4) interstate transportation;
5) wholesale trade which is primarily engaged in multistate
activity or which has a major import supplanting effect within the state;
6) financial services which are primarily engaged in
providing such services for interstate or international transactions;
7) business services which are primarily engaged in
providing such services to out-of-town markets;
8) research and development of new products, processes or
technologies; or
9) tourism activities which are primarily engaged in for the
purpose of attracting out-of-state tourists.
As used in
these subsections, “primarily engaged” means engagement in an activity by an
enterprise to the extent that not less than fifty-one percent (51%) of the
gross income of the enterprise is derived from such engagement.
f) “Expansion” shall mean the enlargement of a building or
buildings, construction of a new building, the addition of tangible personal
property, or any combination thereof, which is new to the tax rolls and
increases the employment capacity of a business eligible for a tax exemption.
g) “Tangible personal property” shall mean machinery and
equipment which is new to the tax rolls and used during the term of the tax
exemption which may be granted.
Section 33. Resolution No. 6343 and all other Resolutions in conflict
herewith are hereby repealed.
Adopted by the Governing Body of the City of Lawrence, Kansas
this ______ day of October, 2003.
____________________
David M. Dunfield, Mayor
ATTEST:
_______________________
Frank S. Reeb, City Clerk