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CC Resolution No. 1253 2418 RESOLUTION NO. 1253 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, REPEALING RESOLUTION NO. 1093 DULY ADOPTED ON JULY 26, 1990 , BY THE CITY COUNCIL OF THE CITY OF BAYTOWN AND DECLARING SAID RESOLUTION TO HAVE NO FORCE AND EFFECT; FINDING, DECLARING AND ESTABLISHING THAT MANUFACTURING INDUSTRIES NEAR THE CORPORATE LIMITS OF THE CITY OF BAYTOWN RARELY USE BAYTOWN' S MUNICIPAL SERVICES TO THE SAME EXTENT AS DO PRIVATE CITIZENS AND, CONSEQUENTLY SUCH MANUFACTURING INDUSTRIES AS A WHOLE SHOULD COMPENSATE THE CITY OF BAYTOWN PROPORTIONATELY AS TO THEIR USE AND ENJOYMENT OF SUCH MUNICIPAL SERVICES; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF . WHEREAS, orderly economic growth raises the standard of living and otherwise improves the quality of life for the community as a whole; and WHEREAS, the Baytown area has a number of industrial establishments; and WHEREAS, it is to the mutual advantage of industries and municipalities to cooperate whenever possible for the general advancement of the affected population; and WHEREAS, it is generally recognized that manufacturing industries should compensate the City of Baytown proportionately recognizing their limited use of municipal services, but realizing that industries derive benefits, both direct and indirect, from municipal services; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN: Section 1 : That the City Council of the City of Baytown hereby repeals Resolution No. 1093 , which was adopted on July 26 , 1990, and declares said resolution to be without force and effect . Section 2 : That the City Council of the City of Baytown hereby finds, declares and establishes that such manufacturing industries as described above should pay a fair share of tax revenues to the City of Baytown. Section 3 : That the City Council further finds, declares and establishes that such manufacturing industries should not be 2419 annexed in excess of twenty percent (20o) of the fair market value of such property, unless otherwise agreed by a manufacturing industry. Manufacturing industries accepting the benefits of an industrial district agreement consent to the annexation of twenty percent (200s) of the fair market value of their properties Section 4 : That the City Council, having previously created industrial districts, desires to continue with contractual arrangements with industries situated in the industrial districts in the City' s extraterritorial jurisdiction, as provided for in the Texas Local Government Code, Section 42 . 0743 . The City Council further desires that all manufacturing industries be treated equally and that contractual provisions with all such industries should be uniform and consistent so as to generate equitable industrial revenues between industries, set uniform boundary lines, and uniformly apply environmental protection regulations . Section 5 : It is hereby provided that compensation shall be determined uniformly for each manufacturing industry as follows : Company agrees to pay the City of Baytown an Industrial District payment on or before December 31st of each year during the term of this Agreement, such payment to be calculated on the basis of the below stated formula: TOTAL PAYMENT TO CITY = TAX PAYMENT + INDUSTRIAL DISTRICT PAYMENT TAX PAYMENT = Tax Rate x Fair Market Value of Industrial Facility in Annexed Area INDUSTRIAL = (Tax x Fair Market x Applicable) - Tax DISTRICT Rate Value of Industrial Payment PAYMENT Industrial Payment Facility Rate [determined by the City] The applicable Industrial Payment Rate shall be determined as follows : 2 2420 YEAR OF iNijUSTRIAL PAYMENT 4NTRAT/ RATE VALiTATICIN 1 .45 2 .48 3 . 50 4 . 50 5 . 50 6 . 50 7 . 50 Section 6 : That the City Council desires to encourage the establishment and expansion of responsible industry near the City of Baytown in order to encourage orderly economic growth and thus enhance the general advancement of the affected population. New manufacturing industries or expansions to existing industries, announced after the effective date hereof, may upon application to the City Council, be entitled to exemptions from compensation to the City of Baytown in the following manner. 1 . For all qualifying new construction which is located within an Industrial District and which has a value greater than $20 million, the industrial district payment shall be calculated as follows : New = Tax x Fair Market x Applicable New Construction Rate Value of New Construction Industrial Construction Industrial District District Payment Payment Rate 3 2421 a. The applicable New Construction Industrial Payment Rate shall be determined as follows : .YEAR:.t7F VALUATION Z7EW GtJNBTRU TIQN QF NEN7 QITALIF'YING INL777STRIAL UQNSTRUCTIQN I7ISTIt2CT PAYMEI+TP RATE 1 Oo 2 Oo 3 200 4 306 5 400 6 and 7 506 b. Such new construction industrial district payment rate shall apply only to qualified, new construction and then only to the extent that the value of the manufacturing industry' s plant in an Industrial District, exclusive of such qualified, new construction, equals or exceeds the market value of the Company' s entire facility as of January 1 of the year immediately preceding the year in which the industrial district agreement becomes effective. If, however, in any year, the market value of the Company' s property is less than such amount, then value of the new construction shall be added to the market value; and if such sum exceeds the market value of the Company' s entire facility as of January 1 of the year immediately preceding the year in which the industrial district agreement became effective, the value in excess of such amount shall be a factor in computing the new construction industrial district payment . 2 . The new construction industrial district payment shall first become effective as of January 1, immediately following the date of the start of construction, which upon the earlier of the final completion or the expiration of two years, qualifies as "new construction. " For purposes of determining whether 4 2422 new construction is qualified for the new construction industrial district payment calculation, the City shall verify that the fair market value of the new construction after the expiration of two (2) years from the effective date of the new construction industrial district payment computation, equals or exceeds $20 million dollars . Thus, if after the two year period, the fair market value of the new construction is less than $20 million, the difference between the amount that would have been paid pursuant to the industrial district payment calculation and the amount actually paid pursuant to the new construction industrial district payment shall be recaptured by the City and shall be paid within sixty (60) days after written notice of the non-qualification of the new construction for the new construction industrial district payment computation by the City or its designee to the Company. In no case, shall the period to which the new construction industrial district computation applies, inclusive of construction and completion, extend beyond the term of any industrial district agreement . 3 . In the event that the Company allows all or any part of its new construction industrial district payment to become delinquent, this portion of the Agreement, dealing specifically with new construction, shall become null and void; and all payments previously reduced by virtue of this section (i .e . , the difference between the industrial district payment and the new construction industrial district payment) shall be recaptured and paid within sixty (60) days of the delinquency date . 4 . Any expansion shall be defined as a new manuacturing facility or a major addition to an existing manaufacturing facility which is intended to permanently and significantly increase production capacity or produce a new product . An investment which solely replaces or modernizes existing facilities shall not be considered as an expansion. Replacement-type expenditures including, but not limited to, repairs, maintenance, catastrophe, losses, or similar items shall not be considered or treated as an expansion. 5 . The City Council reserves the right to judge the desirability of new industry or expansions to existing industry so as to qualify for the exempt compensation period. 5 2423 Section 7 : Industries that qualify for tax abatement under the City of Baytown Tax Abatement Policy may choose to participate in such tax abatement program in lieu of participating in the policy set forth in this resolution. Industries choosing to participate in tax abatement shall not be eligible to enter into the Standard Industrial District Contract with the City of Baytown at the end of the tax abatement period. Section 8 : This Resolution shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ, AND PASSED by the affirmative vote of the City Council of the City of Baytown, this the 27th day of July, 1995 . PETE C. AL ARO, Mayor ATTEST: JI EILEEN P. HALL, City Clerk APPROVED AS TO FORM: ze'z�'�5)4 ACIO RAMIREZ, S City Attorney b:k1h7/res-ida 6