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City of Waco Economic Development

NORTH AMERICAN FREE TRADE AGREEMENT
IMPACT ZONES IN THE CITY OF WACO

CITY OF WACO GUIDELINES AND POLICY STATEMENT

I. GENERAL PURPOSE AND OBJECTIVES

Areas of the City of Waco are in need of economic revitalization. Investment in these areas by businesses which result in the creation of new jobs, new income and provide for positive economic growth and economic stabilization are beneficial to the City as a whole. This North American Free Trade Agreement Impact Zone policy provides the general guidelines for such revitalization projects. This policy will be considered on a case-by-case basis in evaluating each revitalization project. This policy applies to the owners and operators of businesses. Nothing in the policy shall be construed as an obligation by the City of Waco to create a North American Free Trade Agreement Impact Zone or to approve a North American Free Trade Agreement Impact Zone project application.

II. AUTHORIZED ECONOMIC INCENTIVE

The City Council may enter into agreements, for a period up to 10 years, for sales tax refunds to businesses located in a North American Free Trade Agreement Impact Zone:

III. ELIGIBLE BUSINESS

The economic incentives are available only to businesses located in a North American Free Trade Agreement Impact Zone of the City of Waco designated by the City Council.

IV. NORTH AMERICAN FREE TRADE AGREEMENT IMPACT ZONE PROJECT IMPACT DATA

A. Introduction

The criteria outlined in this Section will be used by the City of Waco City Council to determine whether or not it is in the best interest of the City of Waco to enter into a North America Free Trade Agreement Impact Zone Project agreement. Special considerations will include the degree to which the individual project furthers the goals and objectives of the City of Waco. The applicant shall provide the accurate information.

B. Employment Impact

  1. How many new, permanent full time jobs will be created in the designated area?
  2. What percentage of new employees will (a) come from within the zone, (b) come from within the City of Waco and (c) from outside the State of Texas?
  3. What types of jobs will be created?
  4. What is the estimated number of permanent, full-time new jobs that will be created in the City of Waco?
  5. What will be the total annual payroll of the newly created jobs?
  6. . What method(s) will you use to demonstrate the business' good faith effort to individuals receiving NAFTA transitional adjustment assistance?
  7. What type of specialized training will be required?

C. Proposed Improvements

  1. Identify and describe the kind, number and location of all proposed real property improvements and/or personal property additions to the property and discuss the development schedule of the proposed improvements and/or additions.
  2. To what extent will additional public improvements be needed?

D. Fiscal Impact

  1. How much direct City of Waco sales tax was generated by the business for the previous twelve (12) consecutive months?
  2. How much direct City of Waco sales tax will be generated?
  3. How will this proposed project affect existing business and/or office facilities in the designated area?

E. Community Impact

  1. What affect (approximately) will the proposed project have on the local housing market?
  2. What environmental impact, if any, will be created by the project?
  3. How compatible is the proposed project with the City's comprehensive zoning plan?
  4. Will rezoning and platting/replatting be required?
  5. What will be the estimated fiscal impact on the local school districts?
  6. Will the construction of the project, if any, have baseline performance standards, such as the Energy Star Program developed by the Department of Energy, to encourage the use of alternative building materials that address concerns relating to the environment or to building costs, maintenance, or energy consumption? If so, what standards will be used?

V. GUIDELINES

A. Each applicant for a North America Free Trade Agreement Impact Zone economic incentive must provide Project Impact Data information.

B. Projects that generate between $375,000 and $1,499,999.99 in direct sales tax revenue to the City of Waco and create a minimum of 25 new full-time jobs that offer benefits are eligible for a 5 year municipal sales tax refund as follows:

YEAR 1
50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 2
40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 3
30% of the direct City of Waco sales taxgenerated over the base year.
YEAR 4
20% of the direct City of Waco sales taxgenerated over the base year.
YEAR 5
20% of the direct City of Waco sales taxgenerated over the base year.

 

If at anytime during the agreement period the business owner fails or ceases to comply with the required employment conditions or make a good faith effort to hire individuals receiving NAFTA transitional adjustment assistance, the incentive will be reduced or eliminated accordingly.

C. Projects that generate between $1,500,000 and $4,499,999.99 in direct sales tax revenue to the City of Waco and create a minimum of 50 new full-time jobs that offer benefits are eligible for a 7 year municipal sales tax refund as follows:

YEAR 1 50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 2 50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 3 40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 4 40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 5 30% of the direct City of Waco sales taxgenerated over the base year.
YEAR 6 30% of the direct City of Waco sales taxgenerated over the base year.
YEAR 7 20% of the direct City of Waco sales taxgenerated over the base year.

 

If at anytime during the agreement period the business owner fails or ceases to comply with the required employment conditions or make a good faith effort to hire individuals receiving NAFTA transitional adjustment assistance, the incentive will be reduced or eliminated accordingly.

D. Projects that generate between $4,500,000 and $7,500,000 in direct sales tax revenue to the City of Waco and create a minimum of 75 new full-time jobs that offer benefits are eligible for a 10 year municipal sales tax refund as follows:

YEAR 1 50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 2 50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 3 50% of the direct City of Waco sales taxgenerated over the base year.
YEAR 4 40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 5 40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 6 40% of the direct City of Waco sales taxgenerated over the base year.
YEAR 7 30% of the direct City of Waco sales taxgenerated over the base year.
YEAR 8 30% of the direct City of Waco sales taxgenerated over the base year.
YEAR 9 20% of the direct City of Waco sales taxgenerated over the base year.
YEAR 10 20% of the direct City of Waco sales taxgenerated over the base year.

If at anytime during the agreement period the business owner fails or ceases to comply with the required employment conditions or make a good faith effort to hire individuals receiving NAFTA transitional adjustment assistance, the incentive will be reduced or eliminated accordingly.

Premium Opportunity: An additional 10% of the direct City of Waco sales tax generated over the base year is available for the period of the incentive agreement if two-thirds (66.7%) of the new employees actually live within the city limits of the City of Waco.

VI. PROCEDURAL GUIDELINE

Any person, partnership, organization, corporation or other entity desiring to receive a North America Free Trade Agreement Impact Zone economic incentive shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that the City of Waco is under any obligation to provide the economic incentive in any amount or value to any applicant. Further, no representations made herein are binding unless and until approved by the City of Waco City Council.

A. Preliminary Application Steps

  1. Applicant shall submit a City of Waco Application. The filing fee for an applicant is $1,000.00. An application will not be processed without the total amount of the filing fee being paid in advance.
  2. Applicant shall prepare a survey map showing the precise location of the property, all roadways within five hundred (500) feet of the site, all existing land uses and zoning within five hundred (500) feet of the site and the kind, number and location of all proposed improvements.
  3. City may request applicant to provide substantiation of the economic feasibility of the overall project to assist in determining the long term benefit to the City.
  4. A complete legal description of the real property shall be provided.
  5. All information in the application package detailed above will be reviewed for completeness and accuracy.
  6. The application will be distributed to the appropriate City Departments for internal review and comments. Additional information may be requested as needed.
  7. Copies of the complete application package and staff comments will be provided to the City Council.

B. Consideration of the Application

  1. The City Council will consider the application at meetings conducted pursuant to the Open Meetings Act. Additional information may be requested as needed.
  2. A public hearing must be held before the City of Waco City Council will approve the agreement.
  3. The City Council will hold the public hearing and determine whether the project would is "feasible and practical and in the City Council's opinion would be of benefit to the City of Waco."
  4. The City Council will consider adoption of an ordinance designating the area described in the legal description of the proposed project as a North America Free Trade Agreement Impact Zone.
  5. The City Council shall consider approval of the terms and conditions of an agreement between the City and the applicant which governs the North America Free Trade Agreement Impact Zone economic incentive.

VII. ANNUAL CERTIFICATION

The business owner will have to submit a certified copy from the Texas Comptroller of Public Accounts the amount of sales tax that the business paid that was forwarded to the City of Waco during the twelve (12) consecutive months prior to the approval of the agreement in order to establish the "Base Year Value" for the agreement. 'Base Year" is the twelve (12) consecutive months prior to the date of the approval of the agreement. Throughout the term of the agreement, the owner will submit, on the anniversary of the date the agreement was approved, a certified copy from the Texas Comptroller of Public Accounts the amount of sales tax that the business paid that was forwarded to the City of Waco during the previous twelve (12) consecutive months. The City shall have the right if it deems necessary to examine the business' appropriate records.

VIII. RECAPTURE

If a business granted a North America Free Trade Agreement Impact Zone economic incentive fails or refuses to meet its obligations and commitments under an agreement, it shall be responsible and obligated to repay to the City the incentives on a pro-rata basis based on the percentage of non-compliance by the business.

IX. INSPECTION AND FINANCIAL VERIFICATION

The City of Waco reserves the right to review and verify the applicant's financial statements prior to granting a North America Free Trade Agreement Impact Zone economic incentive and to review the financial condition of the business during the term of the agreement. The City of Waco also reserves the right for a representative to inspect the facilities of the applicant during the term of the agreement and to verify the information provided in the agreement. Provisions to this effect shall be incorporated into the agreement.

 

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