§ 17-1. Tax exemptions for economic development

(a) Purpose. The purpose of this section is to establish the official policy and procedures of the county for the granting of property tax exemptions for qualified economic development purposes, in accordance with the provisions of section 13 of article 11 of the Constitution of the state.

(b) Authority and jurisdiction. The authority to grant tax exemptions within the unincorporated area of Saline County is solely vested in the board of county commissioners who reserve the right to exempt any project from the criteria set out herein if the economic development project, due to its unusual nature of magnitude, offers extraordinary benefits to the community. It shall be the policy of the county to consider applications for tax exemptions only for property located outside of incorporated cities. Further, the county shall notify all taxing units affected if an application relates to a business located or to be located within their taxing jurisdictions.

(c) Notice and hearing. Prior to approving an exemption application, a public hearing shall be held by the board of county commissioners. Notice of the public hearing shall be published at least seven days prior to the hearing and shall indicate the purpose, time and place thereof. Notice of the public hearing shall be provided in writing to any affected taxing jurisdictions.

(d) Criteria for granting of tax exemption. Each application for tax exemption shall be evaluated and graded in accordance with the following criteria:

(1) Demonstration of benefit. The board of county commissioners may consider approving said tax exemption application only upon a clear and factual showing of direct economic benefit to the county including the creation of additional permanent jobs and the stimulation of additional private capital investment.

(2) Measure of economic growth benefits. The primary purpose of tax exemptions is to further stimulate economic growth. The project shall be one that increases the number of jobs in the community and invests additional capital in a new or expanding facility.

(3) Elimination of competition. The approval of tax exemptions for business activities which would directly compete with established businesses in Saline County will not be encouraged unless there is a clear and definitive demonstration of substantial overriding benefit to the county as a whole.

(4) Preservation of tax base. It is the intent of this policy to promote expansion of the tax base and assure that the taxing units having authority to levy taxes on the property involved will receive, in the future, not less than the amount paid by the property prior to the granting of the exemption.

(5) Types of industry (eligible businesses). In accordance with article 11 of the Kansas Constitution, said tax exemptions will be considered only for businesses that:

a. Manufacture articles of commerce.

b. Conduct research and development relative to the manufacturing of the product.

c. Store goods and commodities which are sold or traded in interstate commerce.

(6) Nature of improvements. The board of county commissioners may exempt from taxation all or part of the appraised valuation of:

a. All newly constructed buildings or additions to existing buildings used exclusively for eligible business activities which are necessary to facilitate the formation of a new business or expansion of an existing business if, as a result of such formation or expansion, new employment is created.

No exemption application will be considered for the land upon which qualified buildings or building additions are located, existing buildings are already built, or any property is being rented or leased by other than a not-for-profit local economic development corporation. No exemption application will be considered for buildings or building additions for which a building permit has been applied for or construction commenced before the date said application is considered.

In the event that a not-for-profit local economic development corporation constructs a new building for an unidentified occupant, the minimum job requirement may be waived.

No tax exemption shall be effective until occupancy by an eligible business activity and project completion.

(e) Term and amount of exemption.

(1) Base exemption. Said exemption may be granted for 25 percent of the property taxes due on projects with at least $50,000.00 of new capital investment and that create a minimum of three new jobs (full-time equivalent [FTE]). For the purpose of this section, "capital investment" shall only include the cost of any business machinery and equipment associated with and necessary for the successful operation of the finished project. All newly created jobs shall be non-contractual jobs with benefits that are currently available to existing full time employees.

(2) Incentive exemption. The county will consider increasing the amount of tax exemption up to 100 percent by giving special consideration to the amount of capital investment and number of new employees based on the following scale:

a. An additional tax exemption will be given for each additional new job (FTE) above the minimum as follows: 1.5 percent for jobs four through ten; 0.5 percent for each job above ten.

b. An additional tax exemption will be given for each additional $15,000.00 of investment above the minimum as follows: $100,000.00 to $1,000,000.00—0.3 percent; above $1,000,000.00—0.1 percent.

(3) Descending exemption scale. The calculated tax exemption will be applied according to the following scale:

Years 1 thru 5	100% of the calculated tax exemption
Years 6 thru 10	50% of the calculated tax exemption

(4) Term of exemption. No tax exemption shall be in effect for more than ten years after the calendar year in which the business commences operations or completes an expansion. Any tax exemption granted shall not affect the liability of any special assessments levied or to be levied against such property.

(f) Preliminary review. Prior to submittal of a formal application, a business may inquire as to eligibility for tax exemption and the anticipated amount of tax exemption based upon preliminary employment and capital investment figures. The business shall complete the regular application form, stating at the top of the form that this is a preliminary application, and submit the pre-application to the county administrator (or planning and zoning department). County staff will review the information submitted and respond to the business regarding apparent eligibility and potential amount of eligible tax exemption. The response from the county staff shall in no way represent definitive findings or be seen as an expression of intent or obligation of the board of county commissioners to favorably consider or approve a formal request for tax exemption. The preapplication form, information, and the staff response shall be considered proprietary business information and shall be kept confidential.

(g) Administration. Applications for the granting of a tax exemption pursuant to this policy shall be accompanied by a nonrefundable filing fee for both formal applications and completion review to be deposited in the general fund. In addition, any business which has been granted a tax exemption shall pay an annual monitoring fee. These fees shall be used to defray expenses incurred by the county in processing the application and other documents relative to the proposed exemption.

(h) Formal application. The county will not consider any tax exemption application unless the business submits a full and complete application and provides such additional information as may be requested.

(1) Fees. The filing fee for applications shall be $250.00.

(2) Application contents.

a. Name and address of applicant, contact person and telephone number.

b. Names and addresses of the principal officers and directors of the applicant business.

c. Name and address of the owner of the land and buildings occupied or to be occupied by the business.

d. A general description of the nature of the business of the applicant, applicant's history/experience and a list of principal competition in the local market.

e. A general description of the proposed project or improvements, including estimated costs, plus the percentage of tax exemption being requested. Also, a general description and the estimated value of existing tangible personal property that will be replaced, and, therefore, removed from the tax rolls, as a result of the proposed project or improvements.

f. A site plan of the proposed project or improvements.

g. If an existing business, average monthly employment figures for the past 12 months. This number will become the base line to determine continuous eligibility on an annual basis. If at any time total employment drops below this number plus the number of jobs to be created, the applicant may be considered ineligible or noncompliant and the tax exemption may not be granted for that year.

h. If a new business, the number of jobs to be created. This number will become the base line to determine continuous eligibility on an annual basis. If at any time total employment drops below this number, the applicant may be considered ineligible or noncompliant and the tax exemption may not be granted for that year.

i. Number of new jobs to be created by job title and projected wages for each position.

j. A statement explaining why the requested tax exemption is a critical factor in determining whether the proposed project is to be completed.

k. The applicant must designate the completion date not to exceed 36 months from the resolution of intent. In the event the completion date exceeds 36 months, the applicant may apply to the county commission to extend the completion date beyond 36 months. The planning and zoning director shall have authority to approve extensions of the completion date prior to the expiration of 36 months.

(3) Application procedures. Each application made for granting of said tax exemption shall generally follow the procedures outlined below:

a. Completed application and filing fee will be submitted to the planning and zoning department.

b. A notice of the filing will be sent to the applicant and board of county commissioners.

c. A review committee comprised of the county administrator, county appraiser and planning and zoning director will determine eligibility requirements, estimate the percent and amount of tax exemption, and analyze the cost and benefits of such exemption.

d. The review committee's analysis will be forwarded to the board of county commissioners.

e. If the board desires to consider the application, they will schedule a public hearing and publish due notice in the official county newspaper at least seven days prior to the hearing. Each taxing unit affected by the proposed exemption will be notified individually.

f. Official action on the application by the board will take place at a public meeting and hearing. The board of county commissioners will review the analysis of the costs and benefits and receive the comments from the applicant, affected taxing districts, and the general public. At the conclusion of the hearing, the board will take formal action on the application. Approval of the request will be in the form of a county resolution.

g. In granting a tax exemption, the board of county commissioners may impose any terms or conditions as deemed necessary to fulfill the purpose and intent of this policy.

The complete application process from filing to official action shall generally be completed within 60 days.

(4) Confidentiality. All applications and records pertaining to a formal tax exemption request will be available for public inspection under the Kansas Open Records Act as provided by K.S.A. 45-221.

(i) Completion review. Each tax exemption application approved shall be subject to a review of project completion. This review shall be for the purpose of determining if the economic benefits stated in the application are achieved, if the estimated percent and term of the exemption remain valid, and if the business is in compliance with any established terms or conditions. In the event that a capital investment project has not been completed, the review status shall be considered "in progress" and no tax exemption shall be granted. If the capital investment project is complete but the employment goal has not been reached and hiring remains active, the applicant business may request to be considered "in progress" and receive no tax exemption. Or the applicant business may be considered partially complete (as long as the minimum employment and investment threshold is met) and receive a prorated tax exemption for the subject year. A prorated exemption shall count against the tax exemption term. In any case a project shall be considered complete if more than 36 months have elapsed since initial approval of the tax exemption resolution, unless otherwise requested by the applicant and approved by the county commission.

The applicant shall do the following for completion review:

(1) Filing date and fee. An application for completion review shall be filed within three months after the completion date as set forth in the application, unless extended as set forth herein. The filing fee shall be $125.00 and is nonrefundable. There shall be no filing fee for an in-progress review.

(2) Business information. The applicant business shall provide information pertaining to the number of full-time permanent jobs in existence at completion of the project, the actual amount of capital invested in the project, the ongoing nature of business activities, an "as-built" site plan of the completed project, and any other data that may reasonably be requested.

(3) Review process. The county review committee will review the application and submit a report to the board of county commissioners within 60 days. The board will consider the application and staff report at a public hearing, advance notice of which shall be as provided for the hearing on the original application. Approval of the certification of compliance shall be in the form of a certificate of compliance resolution determining compliance with the tax exemption policy.

(4) Certification. If certification of compliance for the tax exemption is granted, a state exemption claim form shall be filed with the county appraiser within 30 days of the certificate of compliance resolution. A copy of the resolution that originally approved the exemption and a copy of the certificate of compliance resolution shall be submitted with said claim form. A state exemption claim form can be obtained from the Saline County Appraiser's Office.

(5) Revocation. The board of county commissioners reserve the right to revoke a granted exemption due to a fraudulent submittal of an application, failure to submit the completion review application and supporting information, failure to meet qualifying criteria, or failure to comply with established terms or conditions. Failure to produce the stated economic benefits will result in a reduction or loss of tax exemption.

(j) Monitoring review. Following receipt of certification of compliance, each tax exemption granted shall be subject to an annual monitoring review of business status. This review shall be for the purpose of determining if the business continues to meet eligibility criteria and remains in compliance with any established terms or conditions.

(1) Filing date and fee. The application for monitoring review shall be filed on an annual basis no later than January 15 of each year for the term of the exemption. Reminder letters shall be mailed out by certified mail no later than December 15 of each year. The filing fee shall be $50.00 and is nonrefundable.

(2) Business information. The recipient business shall provide information pertaining to the ongoing nature of business activities, average total monthly employment (i.e, newly created jobs have been retained and existing jobs have been retained), any change in majority ownership of the business and any other data as may reasonably be requested.

(3) Review process. The county review committee will review the application and, unless ineligibility or noncompliance is evident, the county clerk shall issue a certificate of compliance. In the alternative, the review committee shall submit a report to the board for their determination of compliance.

(4) Certification. If compliance is deemed to exist, a written statement, signed by the county clerk, that the property continues to meet all terms and conditions established as a condition of granting an exemption, shall be attached to the exemption claim form filed with the county appraiser.

(5) Revocation. The board of county commissioners reserves the right to revoke and/or modify a granted exemption due to a fraudulent submittal of an application, failure to submit the monitoring review application and supporting information, failure to meet qualifying criteria, or failure to comply with established terms or conditions.

(k) Policy review. The board of county commissioners reserves the right to amend, revoke, change, or otherwise modify this policy from time to time to promote the best interests of Saline County, and reserves the right to apply this policy to pending applications to insure compliance with this policy.

(Amend. 1147-4, 11-7-06)