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RESOLUTION NO. 82015 -042
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING A POLICY FOR AIRCRAFT TAX ABATEMENT FOR THE CITY OF DENTON
TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING AIRCRAFT INCENTIVE
AGREEMENTS AND AIRCRAFT TAX ABATEMENT AGREEMENTS; AND DECLARING
AN EFFECTIVE DATE.
WHEREAS, the Property Development and Tax Abatement act, Chapter 312 of the Texas
Tax Code, allows the city to establish its own criteria for tax abatement and the City has previously
adopted guidelines for tax abatement by passing Resolutions Nos. R- 90018, R98 -004, R2000 -028,
R2001 -020, R2003 -021, R2005 -057, R2008 -003, R2010 -009, R2012 -009, 82014 -016; and
WHEREAS, the Tax Abatement Policy R2014 -016 adopted by the City Council in May
2014 was broadened to apply a Chapter 380 of the Texas Local Government Code to implement a
wider range of incentive programs for targeted industries and opportunities; and
WHEREAS, attracting aircraft to base at Denton Enterprise Airport constitutes an
identified targeted opportunity to stimulate investment and development at the Airport; NOW,
THEREFORE,
THE COUNDIL OF THE CITY OF DENTON HEREBY RESOLVES;
SECTION 1. The policies, guidelines and criteria found in the Denton Aircraft Incentive
Policy, attached hereto as Exhibit A and made part of this Resolution and incorporated herein for
all purposes, are in all things approved and adopted. From and after the effective date of this
Resolution, the attached Denton Aircraft Incentive Policy shall constitute policy guidelines and
criteria governing the attraction and basing of aircraft at Denton Enterprise Airport for the City of
Denton in accordance with Chapter 312 of the Texas Tax Code.
SECTION 2. Pursuant to Texas Tax Code Section 312.002 (c) the guidelines and criteria
adopted herein shall be effective for two (2) years, during which time the guidelines may be
amended or repealed by a vote of three - fourths of the members of the Council.
SECTION 3. This Resolution shall become effective immediately upon its passage and
approval at the regular meeting of the City Council of the City of Denton, Texas on the 3rd day of
November, 2015, at which meeting a quorum was present which meeting was held in accordance
with the provisions of Texas Government Code Chapter 551.
S: \Legal \Our Documents \Resolutions \15 \Aircraft Incentive Policy.docx
PASSED AND APPROVED this the 3rd day of November, 2015.
CHRIS WATTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
' '
BY: ; �wA
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BYw� m
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Draft Aircraft Incentive Policy
Exhibit A
CITY OF DENTON AIRCRAFT INCENTIVE POLICY
I. GENERAL PURPOSE AND OBJECTIVES
The City of Denton (City) Tax Abatement and Incentive Policy (Policy) provides for the City to consider
financial incentives to projects that accomplish one or more of the following economic development
objectives: development and diversification of the economy, eliminate unemployment or
underemployment, expand transportation or commerce, attract major investment, expand primary
employment and stimulate agricultural innovation. The Policy additionally provides for the City to
establish targeted incentive programs to accomplish one or more of these objectives.
The Denton City Council has the authority under Chapter 380 to create a custom incentive in order to
accomplish specific economic development goals. Chapter 380 incentives will be considered on a case -
by -case basis, and may be considered for one or more of the following criteria:
• A certain number of net new jobs with wages above Denton's median household income
• The relocation of a company that promotes the growth of targeted industry clusters such as high -
tech companies, aviation/aerospace industry, or supply chain clusters that support Denton's
existing primary employers
• Incentives for businesses that cause infill redevelopment or other desirable development objectives
• Any other activity which the City Council determines meets a specific public purpose for
economic development
The purpose of this Aircraft Incentive Policy (Policy) is to define the financial incentive, establish the
standards by which the incentive will be considered for implementation by Denton City Council and
provide an application process under which an incentive will be considered. The new basing of
aircraft at Denton Enterprise Airport (DTO) may be considered for financial incentives.
II. ECONOMIC DEVELOPMENT PARTNERSHIP BOARD
Requests for an Aircraft Incentive shall be reviewed by the Economic Development Partnership (EDP)
board, on a case -by -case basis unless otherwise directed by City Council, the EDP board being
comprised of two City Council members, two Chamber of Commerce board members, two
representatives from the top twenty taxpayers, one representative from the University of North Texas,
one member with aviation experience, and one member at- large.
The EDP board serves as a recommending body to the City Council regarding whether economic
development incentives should be offered in each individual case. Its recommendation shall be based
upon an evaluation of information submitted in the incentive application and any additional information
requested by the EDP board or presented to the EDP board. The Incentive Application shall be
substantially in the form of Exhibit A of this Policy. All meetings of the EDP board shall be held in
compliance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code.
III. VALUE OF INCENTIVES
Draft Aircraft Incentive Policy
The criteria outlined in the Aircraft Incentive application will be used by the EDP board in determining
whether or not it is in the best interests of the City to recommend that incentives be offered to a
particular project. Specific considerations will include the degree to which the individual project
furthers the goals and objectives of the community as described in the Denton Comprehensive Plan, as
well as the relative impact on growth, employment, expansion of the tax base, economic development
and human health and the environment.
Newly based aircraft may be eligible for an incentive if the minimum threshold, as described in Table 1
below, is met. Once a determination has been made that a project is eligible for a Chapter 380 incentive,
the following table will serve as a basis for determining amount and term of incentive:
TABLE 1: Establishes a framework for considering the length and percentage of incentive
according to assessed property value of newly based aircraft located on the basing provider real property
at Denton Municipal Airport.
VALUE OF
YEARS OF
PERCENTAGE OF
PERCENTAGE OF
PERSONAL PROPERTY
INCENTIVE
INCENTIVE TO
INCENTIVE TO
IN MILLION DOLLARS
ELIGIBLE AIRCRAFT
BASING PROVIDER
OWNER
100
10
25%
5%
80
9
25%
5%
65
8
25%
5%
50
7
25%
5%
35
6
25%
5%
20
5
25%
5%
15
4
25%
5%
10
3
25%
5%
1 TO >10
2
25%
5%
To qualify, companies must meet the minimum threshold of the Policy in the first 24 months from the
execution of the agreement or as specified in the incentive agreement.
The total incentive of 30 %, that constitutes a 25% incentive to the aircraft owner and a 5% incentive to
the basing provider, may not exceed 30% annually for ten years. All incentives are subject to final
approval of the City Council. Even though a project may meet the criteria as set forth in this Policy,
an application may be denied at the discretion of the City. The thresholds as described in Table 1
are considered guidelines for establishing the Chapter 380 Incentive terms. However, the City may
determine that a lower or higher percentage and /or a shorter or longer term of incentive may be more
appropriate for an individual project. If the incentive is approved, the City may consider applying all or
a portion of the incentive in the first year or during any shorter period within the term of the incentive
agreement. For example, an approved incentive of 30 percent for four years may be applied as 100
percent abatement for one year.
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Draft Aircraft Incentive Policy
Aircraft incentives hereunder will only apply to the increased valuation attributable to "Eligible Based
Aircraft" located on the "Basing Provider" property at Denton Enterprise Airport in each year covered
by the incentive agreement over the valuation attributable to the applicant's existing "Eligible Based
Aircraft" located on any property at Denton Enterprise Airport in the year prior to the year in which the
Aircraft Incentive agreement is executed. The City may also consider other tax incentives authorized by
law.
Definitions:
Eligible Based Aircraft refers to aircraft that are newly based for the first time at Denton Enterprise
Airport and upon which ad valorem tax is collected.
Basing Provider refers to the business or individual providing space for the Eligible Based Aircraft at
Denton Enterprise Airport.
Preliminary Application
IV. PROCEDURAL GUIDELINES
Any person, organization or corporation desiring that the City consider providing incentives to
encourage location or expansion of facilities within the limits of the jurisdictions shall be required to
comply with the following procedural guidelines. Nothing within these guidelines shall imply or
suggest that the City is under any obligation to provide an incentive to any applicant.
A. Applicant shall complete the attached "Aircraft Incentive Application."
B. Applicant shall prepare a map or other documents providing the Basing Provider name and
precise location at Denton Enterprise Airport.
C. Applicant shall complete all forms and information detailed in the Application and submit all
information to the City Manager (or his /her designee), City of Denton, 215 E. McKinney,
Denton, TX 76201.
D. All information in the application package detailed above will be reviewed for completeness
and accuracy. Additional information may be requested as needed.
E. The application will be distributed to the appropriate City departments for internal review
and comments. Additional information may be requested as needed.
F. Copies of the complete application package and staff comments will be provided to the EDP
board.
G. Fiscal agents of the City will review the application for comments and recommendation.
Additional information may be requested as needed.
Consideration of the Application
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Draft Aircraft Incentive Policy
H. The EDP board will consider the application at a regular or special- called meeting(s).
Additional information may be requested as needed.
I. The recommendation of the EDP board will be forwarded, with all relevant materials, to the
City Council.
J. The City Council may consider adoption of an ordinance or resolution approving the terms
and conditions of a contract between the City and the applicant governing the provision of
the incentive and the commitments of the applicant, including all the terms required by
Section 312.205 of the Tax Code and such other terms and conditions as the City Council
may require. Should the commitments subsequently not be satisfied, the incentive shall be
null and void (unless the agreement provides for a recapture of the ad valorem tax revenue
lost proportionate to a partial failure to meet the minimum thresholds set forth in the
agreement). Provisions to this effect shall be incorporated into the agreement.
N. The City reserves the authority to enter into incentive agreements under Chapter 380 of the
Texas Local Government Code and with differing percentages and or /terms as set forth in the
guidelines of this policy.
Any incentive agreement will address various issues, including but not limited to, the following:
1. General description of the property project
2. Amount of the incentive and percent of value to be incentivized each year
3. Method of calculating the value of the incentive
4. Duration of the incentive, including commencement date and termination date
5. Legal description of the property
6. Kind, number, location and timetable of planned improvements
7. Specific terms and conditions to be met by applicant
9. Contractual obligations in the event of default, violation of terms or conditions, delinquent
taxes, recapture, any decrease in valuation, administration and assignment
Annual Evaluation
Upon completion of threshold criteria, the City Council shall receive from the City Manager (or his /her
designee) an annual evaluation of each incentive to insure compliance with the agreement and to report
possible violations of the agreement to the appropriate taxing entities. After new tax base numbers are
received in July of each year, the City Manager and his staff will have ninety (90) days to review and
prepare a breakdown of those figures.
Local Businesses and Historically Underutilized Businesses
Businesses receiving an incentive are asked to use diligent efforts to purchase all goods and services
from Denton businesses whenever such goods and services are comparable in availability, quality and
price.
The City of Denton also encourages the use, if applicable, of qualified contractors, subcontractors and
suppliers who are historically underutilized businesses based on information provided by the General
Page 4ofII
Draft Aircraft Incentive Policy
Services Commission pursuant to Chapter 2161 of the Government Code. In the selection of
subcontractors, suppliers or other persons or organizations proposed for work on this Agreement, the
OWNERS agree to consider this Policy and to use their reasonable and best efforts to select and
employ such companies and persons for work on this Agreement.
Job Recruiting from Low - Moderate Income Census Tracts
Businesses receiving incentives are asked to endeavor to make available, or endeavor to cause lessees
or assignees to make available, full -time or part -time employment with on-the-job training for
Denton citizens. In this effort, the business, lessee or assignee is encouraged to recruit from the low -
moderate income Census tracts as further defined by the U.S. Department of Housing and Urban
Development's (HUD) Qualified Census Tracts (QCT) map shown in Figure 1. HUD defines QCTs
as "census tracts in which one -half or more of the households have incomes below 60 percent of the
area median income or the poverty rate is 25 percent of [or] higher.
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Draft Akcraft Incentive Poky
FIGURE 1: DENTON, TEXAS
2010-2011 Qualified Census Tracts
..........................
f0th"o 44 MAU! MW Am"n j1h
Page 6 of I I
Tract Outfine
Quaimed census Tracts (201 G-201 1)
Kraft Aircraft Incentive Policy
EXHIBIT A
The City of Denton
Aircraft Incentive Application
About the Application...
The Aircraft Incentive Application provides the City with specific information regarding your request. The
information requested in the Application is designed to address the criteria developed within the City of Denton's
Aircraft Incentive Policy. The information serves as the basis for fiscal analysis and overall project evaluation.
This evaluation is provided to the Economic Development Partnership (EDP) board and Council Members and
serves as a source document during EDP board and City Council deliberations.
The Application and the Agreement...
Specific information from the Application (such as value of new investment and employment commitments) is
incorporated into the Incentive Agreement. In fact, the Application is an attachment to the Agreement. Since the
Agreement is a binding contract, it is important that each question on the application be answered in full and as
realistically as possible. Simply put, the application is part of the process from start to finish so you'll want to
make sure you're comfortable with the contents.
When Is The Application Final?
The answer to this question is very simple: When you tell us, "It's final." It is not uncommon for a business
entity to submit numerous Applications as drafts for informational and evaluative purposes only. As
conversations continue, the business entity will submit a finalized version of the Application that includes all of
the commitments agreed to during the discussions.
What about Confidentiality?
Section 312.003 of the Texas Tax Code makes confidential information provided to the City as a part of this
application that describes the specific processes or business activities to be conducted or the Eligible Aircraft or
other equipment to be located on the Basing Provider property. This information is not subject to public
disclosure until the incentive agreement is executed. Section 522.131 of the Texas Government Code (Texas
Public Information Act) makes confidential information which relates to economic development negotiations
between the City and a business prospect that the City seeks to have locate, stay or expand in or near the territory
of the City. The information must relate to a trade secret of the business prospect, commercial or financial
information which the business prospect can demonstrate based on specific factual evidence that disclosure
would cause substantial competitive harm to the person from whom the information was obtained or information
about a financial or other incentive being offered to the business prospect by the City or by another person.
Information about a financial or other incentive being offered to the business prospect is required to be disclosed
when an agreement is made with a business prospect. The City is subject to disclosing most records and
documents upon request under the Public Information Act. Accordingly, please clearly indicate and mark any
information you consider proprietary. This would include anything in your application which you
consider a trade secret, commercial or financial information which you can demonstrate by specific
factual evidence that would cause substantial competitive harm if disclosed, information which describes
the specific processes or business activities to be conducted or the equipment or other property for which
the incentive is sought, any financial or other incentive you may be seeking from the City or any other
information you deem to be confidential under the law.
Who is Authorized To Sign the Application?
Because the Application itself is non - binding, the person signing need not be the property owner or even an
individual duly authorized to sign on behalf of the property owner. However, if an Agreement is reached, the
Application will be an attachment to the Agreement and its contents will be binding through the authorized
signature required on the Agreement.
Page 7 of 11
Draft Aircraft Incentive Policy
City of Denton
Aircraft Incentive
Application
City of Denton
Department of Economic Development
Denton, Texas 76201
(940) 349 -7776
(940) 349 -8596 FAX
www.cityofdenton.com
Aimee.B i ssettgcityofdenton.com
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Draft Aircraft Incentive Policy
INCENTIVE APPLICATION
CITY OF DENTON, TEXAS
Aircraft Owner
Company or Project Name
Mailing Address
Telephone Fax No.
. We...... -1111-11- .."1111- 1--1 « . - ......m....._.
bsite .
Contact Name
Title
Mailing Address
Telephone Fax No.
Email Address
List each aircraft to be newly based at Denton Enterprise Airport by type, make, model , most recent or
estimated valuation, current base location and aircraft intended use(s)
...........................
Type Make Model Current Value Current Base Annual Fuel &
(Attach copy of Location Maintenance
latest property Costs
Tax statement)
... . ......... .....
....... . ............ .. .......
Provide a chronology of any aircraft base relocations during the past 5 years
Page 9 of I I
Draft Aircraft Incentive Policy
5. Estimated total value of Eligible Aircraft
6. Indicate incentive number of years requested.
Percent Requested Years Requested
7. List any other financial incentives this project will request /receive
8. Denton Enterprise Airport Basing Provider
Specific Basing site
Mailing Address
_. Telephone .....................��_m_m__ ...................��..
Fax No.
......... ......a . . nn...,,,,,. � ... ��.... ., ...
Website
Contact Name
Title "m._.._..._...._.
Mailing Address
Telephone Fax No..�.mm_, ��...
Email
Address
Describe any on -site service requirements:
10. If applicable, provide employment information for the number of years the incentive is requested.
Page 10 of 11
Draft Aircraft Incentive Policy
At Project
Existing Start Date At Term of
Employment Information Operation (mo /yr) Incentive
(if applicable)
A Total number of permanent, full -time jobs
B. Employees y transferred from outside .._ n ..........
Denton
. -. ____. --------
Net permanent full -time jobs (A. minus B.)
E. Total annual payroll for all permanent, full -time
jobs (A.)
F. Types of jobs created. List the job titles and number of positions in each category that will be employed
in support of Eligible Aircraft operations. Provide average wage for each category.
G. Indicate the number of shifts
11. Describe any other direct benefits to the City of Denton as a result of this project (e.g., sales tax revenue).
12. Provide specific detail of any businesses /residents that will be displaced and assistance that will be available
from the requesting company.
13.. Justification for Incentive Request: Substantiate and more fully describe the justification for this request.
Include the amount of the incentive requested and show how it will contribute to the financial viability of your
aircraft operations. Submit attachments if necessary.
This Incentive Application is submitted with the acknowledgement that additional information may be required.
Authorized Signature
Page 11 of 11