Del Mar College Board of Regents September 8, 2020
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Del Mar College Board of Regents September 8, 2020 1 Compliance CCREDC provides compliance reviews for: • City of Corpus Christi • Nueces County • San Patricio County • Del Mar College • San Patricio County Drainage District • Corpus Christi Business & Job Development Corporation (Type A Board) Compliance Procedures • Review all of the requirements from the Agreements • Use standard documents to test compliance • IRS form 941 and 940 • Audited financials • TWC reports • Review all of the company’s assertions • Report on findings to Del Mar College President Tax Abatement Agreements (Existing Agreements for Del Mar College) Company Year Investment Jobs •M&G 2014 751.0M 200 •voestalpine 2015 56.7M 10 •Castleton 2016 300.0M 20 •EPIC Y-Grade 2019 200.0M 10 The Numbers M&G voestalpine EPIC Y- Topaz Total Resins Docks GRADE Year Approved 2008 2014 2015 2017 Investment (mils) $ 630.0 $750.0 $56.7 $200.0 $1,636.7 Act. Investment 669.0 (mils) 900.5 67.0 $200.0 $1,836.5 Construction 2009 2015 2016 2018 Production Start 2011 Est 2024 2017 2020 The Numbers Taxes over a ten-year period - Net of Incentives voestalpine EPIC Y- Topaz M&G Resins Total all Projects Docks GRADE Taxes without 61,080 48,964 0.0 29,045 139,089 Investment Taxes with 11,299,357 14,119,347 1,235,176 3,687,093 30,340,975 Investment M&G Resins Corpus Christi Polymers LLC, a joint venture between Alpek, Indorama, and Far Eastern Investment, has entered into an asset purchase agreement with M&G USA Corp. Questions Draft – For Discussion DEL MAR COLLEGE DISTRICT TAX ABATEMENT GUIDELINES AND PROCEDURES GENERAL PURPOSE AND OBJECTIVES OF THE POLICY As authorized under Chapter 312 of the Texas Tax Code (“Chapter 312”), Del Mar College District (the “District”) has elected to become eligible to participate in tax abatement projects in Reinvestment Zones which may be created from time to time by counties or cities in the taxing jurisdiction of the District. The District established this policy to allow it to work in concert with other taxing units as part of an overall publicly supported incentive program, designed to create job opportunities that bring new economic advantages or to strengthen the current economic base of the community. It is the intent of the Del Mar College District Board of Regents (the “Board”) to consider requests for tax abatement agreements (the “Agreements”) for projects in duly designated Reinvestment Zones in the Taxing Jurisdiction of the District. The criteria set out in this policy are the minimum eligibility criteria for consideration of a proposed Agreement with the District. The Board, in its sole discretion, will determine whether the District’s participation in a proposed Agreement is in the public interest, notwithstanding that the Applicant has demonstrated compliance with these minimum criteria. SECTION 1 – DEFINITIONS For the purposes of these guidelines and procedures, the following terms, when capitalized, shall have the following stated meanings: (a) “Abatement” means the full or partial exemption from ad valorem taxes of certain real and/or personal property in a reinvestment zone designated for economic development purposes. (b) “Agreement” means a contractual agreement between a property owner and a Taxing Unit for the purposes of tax abatement. (c) “Applicant” means the legal entity seeking tax abatement. (d) “Base Year Value” means the assessed value of the applicant’s eligible real and personal property located in a designated reinvestment zone on January 1 of the year of the execution of the agreement. (e) “Deferred Maintenance” means improvements necessary for continued operations which do not improve productivity or alter the process technology. (f) “Economic Life” means the number of years a property improvement is expected to be in service in a facility. (g) “Reinvestment Zone” is an area designated as such for the purpose of tax abatement as authorized by Chapter 312 of the Texas Tax Code. (h) “Taxing Jurisdiction” means territory in the Del Mar College District Service Area, which is subject to ad valorem tax assessment and levy by the District pursuant to the elections creating the District or which may have been subsequently annexed to the District, or which may have been subsequently annexed to the District as a result of annexations by the City of Corpus Christi, Texas, and which have become subject to assessment and levy as a result of such actions pursuant to the Texas Education Code, as amended. (i) “Taxing Unit” means Del Mar College District and any county, municipality, school district or other entity, which is located in the territory of the Del Mar College District, and that levies ad valorem taxes upon and provides services to property located within the proposed or existing reinvestment zone. SECTION 2 – ABATEMENT AUTHORIZED The Board of the District may grant an Abatement on a case-by-case basis upon receipt and review of a complete application in compliance with the guidelines and criteria and set out in this policy. This policy however is not intended to limit the discretion of the Board to determine whether to approve a specific Agreement. The Board hereby authorizes the President and Chief Executive Officer of the District and his staff to develop and adopt such administrative policies and processes as may be appropriate to facilitate bringing Agreements for Abatement before the Board for consideration and to make such recommendations to the Board concerning the application or any Agreement, as the administration may deem. The policy does not create any property, contract, or other legal right in any person to require the Board to consider or grant a specific Agreement for Abatement. In determining whether to grant or deny a proposed Agreement, the Board will consider whether an Abatement Agreement is reasonably likely to: (1) contribute to the expansion of primary employment in the Reinvestment Zone; or (2) attract major investment in the Reinvestment Zone that would: (a) constitute a significant benefit to property in the Reinvestment Zone and provide an educational benefit to the District; and (b) contribute to the economic development of the Reinvestment Zone and the District. In considering the request, the Board and Administration may examine and rely on the findings and conclusions of the county or city which designated the Reinvestment Zone and may seek 2 additional input and a recommendation from the governing board of the county or city designating an area as a reinvestment zone pertinent to the proposed Agreement. Agreements for the Abatement of ad valorem taxes assessed and levied by the District for maintenance and operation of the District may be authorized by the Board based on the following conditions and subject to the Applicant demonstrating compliance with the Minimum Criteria set out in subsequent sections of this policy. Authorized Facilities. A facility may be eligible for abatement if it is a manufacturing/ assembly facility, regional distribution facility, regional tourist entertainment facility, biomedical/biotech research facility, or other industry and is located in a Reinvestment Zone. Creation of New Values. Abatement may only be granted for the additional value of eligible real property improvements subject to such limitations as the District may require. The District shall not enter into an abatement agreement if (1) it finds that the application for Tax Abatement was filed after the commencement of construction, expansion, or modernization, or (2) it finds that the District was not officially notified that construction, expansion, or modernization would commence on a given date. New and Expansion of Existing Facilities. Abatement may be granted for new facilities for purposes of modernization or expansion. Eligible Property. Abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements, as well as office space and related fixed improvements necessary to the operation and administration of the facility. Value and Term of Abatement. Abatement may be granted on a case-by-case basis at the sole discretion of the Board of the District. Abatement, if granted, will be effective with the January 1 valuation date immediately preceding the date of the execution of the Agreement and in no event shall an abatement extend for a term greater than 10 years from the January 1, valuation date. SECTION 3 – MINIMUM CRITERIA In addition to any other requirements established by this policy, any application filed with the District pursuant to this policy must demonstrate that the proposed project meets each of the following minimum criteria. Criteria regarding Qualifying Area (1) Covered area. To be eligible and receive tax abatement, the Applicant must demonstrate that the proposed improvements are located in an area designated by the municipality or the county as a Reinvestment Zone under Section 312 of the Texas Tax Code, or in an enterprise zone as designated by the State. (2) Increased valuations. The Applicant must demonstrate the proposed improvements will 3 increase the appraised value of the improved property in each year of the proposed abatement period. Additional elements specifying the minimum amount of investment are set out in later sections of this Policy, but it is the intention of this requirement that the Applicant demonstrate that the proposed improvements have economic lives that substantially exceed the Abatement period sought. (3) Create more jobs. To the extent the application for Abatement is predicated on the creation of jobs, the Applicant must demonstrate the proposed improvements are expected to increase employment in the community beyond those in existence in the community in the base period and based on the number of permanent jobs created and sustained in each year of the Agreement (4) No adverse impact on existing facilities. The Applicant must demonstrate the proposed improvements will not have an adverse impact on existing jobs in the community.