Tax abatement agreements are made with the owners of real property to be exempt from taxation on a portion of the value of the real property or of tangible personal property, or both. The duration of an agreement may be for a period of time determined appropriate by the City Council and County based on the economic life of the improvements and consistent with the provisions of this policy, but in no case for more than ten years in accordance with state law. Special terms and conditions may be set in the agreement governing each specific tax abatement.
Eligibility & Criteria
A. Facilities: Tax abatements may be granted for new facilities and for expansion or modernization of existing facilities. The economic life of a facility, and/or eligible property must exceed the duration of the abatement.
B. Property: Tax Abatements may be applied to both real and business personal property. Inventory and supplies are not eligible for tax abatement.
C. Criteria: The project must be located within one of the following categories and be a targeted industry type as defined in Item 4.
Citywide: Eligible facilities located in a reinvestment zone and resulting in a minimum added value of $200,000 in real and business personal property (excluding inventory and supplies).
New Braunfels Enterprise Zone: Eligible facilities located in the New Braunfels Enterprise Zone resulting in a minimum added value of $100,000 in real and business property (excluding inventory and supplies).
Downtown New Braunfels: Eligible facilities located in downtown New Braunfels, which includes the Downtown Zoning District, resulting in a minimum added value of $50,000 in real and business personal property (excluding inventory and supplies).
Target Industry Type: (a) project is considered if it fits within the economic development strategic plan (See Exhibit "A" below) and shall be eligible for tax abatement only upon a finding by the City Council that the project will make a unique or un-equalled contribution to the economy, development, redevelopment, tourism or employment opportunities in the City of New Braunfels.
- Product Fabrication
- Assembly & Processing - Electronic, Aircraft,
Bio-medical & Consumer products
- Headquarters - Corporate/Regional
- Business Services - Financial, Personnel, Industrial, Aviation-related, Communications and Computer-oriented services
- Research & Development
- Aviation - related Industries
- Technical - related Education & Training
The above categories to include the following:
Whose industries with processes requiring excessive use of environmentally unsafe material or those that produce air emission or waste that would be detrimental to the community’s environment. Those industries that over duplicate the types of industry already existing in the community or those not compatible with the labor force or its availability.
The above statements concern the following:
- Chemicals & Allied Products - SIC 28 (281, 283, 285, 286, 287)
- Petroleum Refining & Related Industries - SIC 29 (291, 295, 299)
- Primary Metal Industries - SIC 33 (331, 332, 333,334, 335, 336, 339)
- Parts of the Lumber & Wood Products - SIC 24 (241, 242, 249)
- Parts of Paper & Allied Products—SIC 26 (261, 262, 263, 266)
- SIC 201 - Metal Products
- SIC 237 - Fur Goods
- SIC 311 - Leather Tanning & Finishing
- SIC 320 - Shell Products
- SIC 329 - Abrasive, Asbestos & Misc.
Non-metallic Mineral Products
- SIC 348 - Ordinance & Accessories
- SIC 391 - Jewelry, Silverware & Plated Ware
- SIC 899 - Hazardous Waste Disposal
Criteria Value and Assessment:
City tax abatements may be granted for eligible targeted industry types on all or a portion of the increased taxable value of eligible property over the base year value according to the following:
a. Tax abatement of up to 20% will be considered for a project meeting or exceeding the minimum added value requirements described in Section II. Tax abatement of up to 40% will be considered for a high impact project resulting in a minimum added value as described in Exhibit "B’. In no event will a tax abatement granted under this section alone commence until the increased taxable value of eligible property meets or exceeds the minimum added value requirement as specified in the agreement.
b. A tax abatement of up to 60% on a high impact project will be considered for a project granted tax abatement if the project creates or retains one hundred (100) or more "qualified’ jobs citywide, fifty (50) or more jobs in the Enterprise Zone, or ten (10) or more jobs in the Downtown district. In no event will this bonus apply in any year of the agreement that the project does not create or retain the minimum number of jobs specified in the tax abatement agreement, which may require the creation and/or retention of more than the minimum number of jobs used to determine eligibility.
c. A tax abatement of up to 80% on a high impact project will be considered if the project meets the communities economic development strategic plan objectives, makes contributions to the public infrastructure of the city, contributes sales and/or room taxes, and minimizes investment by the taxing authorities in order to serve the project.
d. The maximum percentage of tax abatement granted in accordance with this policy statement shall not exceed 80% per agreement.
Suggested Scoring Formula
One (1) point is scored for each $100,000 increase in value in real and personal property included in project (rounded to the nearest $100,000).
One (1) point is scored for each ten (10) permanent full-time qualified employees compensated to equal the most recent published covered employment average county wage hired within twelve months of project completion. Qualified employees are those receiving access to benefits via the employer, i.e. medical, vacation, etc. and work not less than 2000 hours per year.
One (1) point is scored for each ten (10) qualified jobs paying 25% above the most recent published employment average county wage hired within twelve (12) months of project completion.
One (1) point is scored for each ten (10) qualified jobs paying 50% above the most recent published covered employment average county wage hired within twelve (12) months of project completion.
One (1) point is scored for each $50,000 invested by the company in worker training within the first twelve (12) months of the project.
Only that increase in the fair market value of the real property directly resultant for the development, re-development and improvement specified in the contract will be eligible for a tax abatement and then only to the extent that such increase exceeds any reduction in the fair market value of other real property of an owner located within the jurisdiction creating the reinvestment zone. The length of the tax abatement contract will, as indicated above, begin with the successful completion of the development, redevelopment or improvement of the project.
1. Full-time position, i.e., 35 hours per week with company subsidized benefits, will be considered as one (1) new job.
2. Two part-time positions, i.e., 25 hours per week with company subsidized benefits, will be considered as one (1) new job.
3. No temporary positions will be considered as full-time positions for tax abatement purposes. A 90-day transfer period will be allowed for temporary positions to be converted into permanent jobs.
4. All positions must include company-subsidized benefits. The benefit package must include medical coverage where the company pays the majority of the employee’s cost. Medical benefits must be accessible to the employee’s dependents. The benefit package must also include holiday, vacation and sick pay.
5. Qualified employees is defined as compensated to at least equaling or exceeding the most recent published covered employment average county wage.
QUALITY OF LIFE PROJECTS
The following quality of life projects may also qualify for City tax abatement: recreational parks, amusement parks, indoor and outdoor sporting areas, golf complex, sports complex or stadium type facility for spectator sports and entertainment. The proposed capital investment will be charted on "Exhibit B" to determine the level of tax abatement. A quality of life project must have a minimum capital investment of $500,000 to qualify for tax abatement.
Projects that are qualified as a quality of life project will not need to meet any of the job requirements. The abatement percentage will be determined by the project’s level of investment only. The maximum length of an abatement for a quality of life project is five years. "Quality of Life" facility means building and structures, including fixed machinery and equipment, used or to be used in providing amusement and/or entertainment through the paid admission of the general public. A facility cannot restrict admission because of age.