Collin County Policy Regarding Tax Abatements…

                   Collin County Policy Regarding Tax Abatements
Purpose:

Collin County is committed to the promotion of quality development in all parts of the County
and to improving the quality of life for its citizens. In order to help meet these goals, Collin
County will consider providing tax abatements to stimulate economic development. It is the
policy for Collin County that such an incentive will be provided in accord with the procedures
and criteria outlined in this document. All applicants for tax abatements shall be considered
on an individual basis.

Scope:

This policy shall apply to County tax abatements granted by the Collin County Commissioners
Court anywhere within the County. If an applicant seeks a tax abatement for a project located in
an unincorporated area of the County, the Commissioners Court must first designate a
Reinvestment Zone pursuant to Section 312.401 of the Texas Tax Code. These guidelines and
criteria shall also apply to County tax abatements for projects located in municipally-designated
Reinvestment Zones, which the County is authorized to enter into pursuant to Section 312.206 of
the Texas Tax Code.

Criteria for Tax Abatement:

Economic Qualifications In order for the owner of a property within a reinvestment zone to be
eligible to receive a tax abatement, the owner must show that the planned project will:
        1) be a major investment in the zone that will substantially increase the appraised value
             of property within the zone. In general, increased value means a minimum of $15
             million in real property for cities of more than 50,000 in population according to
             the North Central Texas Council of Governments current year estimates. In
             cities with less than 50,000 in population according to the North Central Texas
             Council of Governments current year estimates, an increased value of $1 million
             or more will be considered;
        2) contribute to the retention or expansion of primary and secondary employment within
             the County by creating new jobs. In general, new jobs mean the creation of jobs to
             the county and not the relocation of jobs from one location of the county to
             another;
        3) meet the requirements of all zoning ordinances, building codes and other applicable
             County ordinances.

Creation of New Value Abatement may be granted only for the increased assessed value of
eligible property and property improvements made subsequent to and listed in an abatement
agreement between the County and the property owner and lessee (if required), subject to such
limitations as the County may require.

County Burden In determining what level of tax abatement and other incentives will be provided
to the applicant, the following criteria will be considered:

                                                       Collin County Policy Regarding Tax Abatements, Cont.
       1) The types and cost of public improvements and services which will be required of the
          County;
       2) The types and value of public improvements which will be made by the applicant;


       3) The method or methods which will be available to recapture property tax revenue lost
          as a result of entering into a tax abatement agreement with the applicant if the
          applicant fails to fulfill its responsibilities under the agreement;
       4) The amount of time necessary to complete the project and create the jobs which are to
          be provided by the applicant.


Agricultural Exemptions Denied No tax abatement shall be granted for any property unless and
until full market value taxes have been paid for five years prior to the execution of a tax
abatement agreement. Exceptions may be granted if it can be demonstrated that significant and
sustained valuation increases can be achieved.

Owned/Leased Facilities If a leased facility is granted an abatement, the tax abatement
agreement shall be signed by both the lessor and the lessee.

Value and Term of Abatement Abatement shall be granted effective January 1 of the year
following the date of execution of the tax abatement agreement. The percentage of the increase
abated shall be determined in each tax abatement agreement; however, no abatement shall
exceed 50%. No tax abatement agreement shall exceed 10 years.

Under limited circumstances will the County consider granting abatements for over 50%.
These conditions will be considered on a case by case basis and will be given great scrutiny.

Application Procedures:

All tax abatements must be approved by the sponsoring city before being submitted for approval
to the Commissioners Court.

The Sponsoring City desiring that the County consider providing a tax abatement to encourage
the location of a business or expanded business operations within the County limits shall be
required to provide to the County:

       1) A brief description of the proposed improvement or expansion along with the
          project' estimated cost, the type of business operation proposed, the number and
                   s
          types of jobs created, the expected source or applicants for such jobs, the projected
          date of beginning operation, the type and value of the tax abatement which are
          requested and the amount of abated taxes;
       2) A plat showing the precise location of the property, all roadways within 200 feet of
          the site, and all existing zoning and land uses on the site and within 200 feet of the
          site;
       3) A complete legal description of the property;
                                                      Collin County Policy Regarding Tax Abatements, Cont.
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       4) A plan which provides access to and inspection of the property and proposed
          improvements by County inspectors and officials to ensure that the improvements are
          made according to the requirements and conditions of the agreement;
       5) A method to provide for the recovery of property tax revenues if the applicant fails to
          perform its obligations under the agreement;
       6) Certification or confirmation that the relocation or expansion has not been the
          result of "competition"between cities within Collin County.
       7) Any other information about the proposed project which may be required by the
          County.

The application will be reviewed by the County Administrator or his or her designee for
completeness and accuracy, and comments will be received from the appropriate departments.
Once this information is complied, the application and review comments will be forwarded to
members of the Commissioners Court. After the review by the members of the Commissioners
Court, additional information may be requested of the applicant.

All requirements of Chapter 312 of the Texas Tax Code, known as the Property Redevelopment
and Tax Abatement Act, shall be followed.

Public Hearing and Approval:

Prior to entering into any tax abatement agreement, the County may, at its option, hold a public
hearing at which interested persons shall be entitled to speak for or against the approval of the
tax abatement agreement.

Agreement:

If the Commissioners Court determines that it is in the best interest of the County to provide
incentives to a particular applicant, a court order shall be adopted approving the terms and
conditions of a tax abatement agreement with the applicant which will enumerate the types of
incentives to be provided and the conditions which are applicable to them.

Subsequent to the agreement, applicant will be required to provide County with written annual
certification in a form satisfactory to the County that the applicant is in compliance with all the
terms and conditions of the agreement. This written certification shall include information on
investments and job creation, as follows:

       1) The annual compliance report must provide information on the Real Property
          investment and acquisition of Personal Property that has occurred during the annual
          reporting period. Applicant must submit the report by November 1st of each year
          during the term of the agreement. The County may require that the reports include
          information on capital expenditures, to include purchase order numbers, vendor
          names, and dollar amounts paid for all of the capital investments, actual costs, and
          book values. These reports must be prepared and administered in accordance with
          generally accepted accounting principals.

                                                        Collin County Policy Regarding Tax Abatements, Cont.
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       2) The annual compliance reports must provide current information on the full-time
          employment positions created and maintained under the agreement. Applicant must
          submit the reports by November 1 st of each year during the term of the agreement.

Assignment:

Tax abatement agreements may be assigned to a new owner or lessee of the improvements with
the written consent and court order authorizing the new assignment. Any new assignment shall
provide that the assignee shall irrevocably and unconditionally assume all duties and obligations
of the assignor as set out in the agreement. No assignment shall be approved if the assignor or
assignee are indebted to the County for ad valorem taxes or other obligations.

Default and Recapture:

Should the County determine that an applicant is in default with regard to the items specified in
the agreement, then the County may declare a default and may terminate the agreement. The
County shall provide applicant or municipality with written notice of such default. If the
agreement is terminated, then taxes will be due for the tax year during which termination
occurred and shall accrue without abatement for all tax years thereafter.




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