Agenda No. 2.
CITY COUNCIL MEMORANDUM
| City Council Meeting: | February 1, 2022 |
| Department: | Economic Development Corporation |
| Subject: | Ordinance No. 22-M-06 - Hold a public hearing, consider action amending Chapter 21 Community Development of the City of Schertz Code of Ordinances by adding Article III Enterprise Zones, enabling nomination of qualifying projects to the State of Texas for Enterprise Project Designation. First Reading (M. Browne/A. Perez) |
BACKGROUND
This action adds Section III to Chapter 21 of the City of Schertz Code of Ordinances titled Community Development. Section III defines the City of Schertz intent to participate in the Texas Enterprise Zone Program (EZP).
The Texas Enterprise Zone Program (EZP) is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state. Texas communities must nominate companies in their jurisdiction to receive an Enterprise Zone designation and thus be eligible to receive state sales and use tax refunds on qualified expenditures. Companies must meet minimum capital investment thresholds and create and/or retain jobs that employ a certain percentage of economically disadvantaged individuals, enterprise zone residents, or veterans.
A community with less than 250,000 in population, may have up to six enterprise projects in a single biennium.
The Texas Enterprise Zone Program (EZP) is a state sales and use tax refund program designed to encourage private investment and job creation in economically distressed areas of the state. Texas communities must nominate companies in their jurisdiction to receive an Enterprise Zone designation and thus be eligible to receive state sales and use tax refunds on qualified expenditures. Companies must meet minimum capital investment thresholds and create and/or retain jobs that employ a certain percentage of economically disadvantaged individuals, enterprise zone residents, or veterans.
A community with less than 250,000 in population, may have up to six enterprise projects in a single biennium.
GOAL
To enhance the competitiveness of the City of Schertz to secure jobs and investment through nomination of qualifying projects to the State Enterprise Zone Program.
COMMUNITY BENEFIT
Participation in the State Enterprise Zone Program allows the City of Schertz to enhance its incentive offerings to include nomination of up to six projects per biennium for a State Sales Tax rebate (not local sales tax). This provides another tool to encourage companies to locate or expand operations and create new jobs in the community.
SUMMARY OF RECOMMENDED ACTION
Approve Ordinance No. 22-M-06 to enable participation in the State Enterprise Zone Program and enhance the competitiveness of Schertz in securing new jobs and investment.
FISCAL IMPACT
None. Successful nomination of a project to receive an enterprise project designation will result in the State of Texas rebating its portion of sales tax revenue paid by the project. Local sales tax is not rebated as a result of participation in this program.
RECOMMENDATION
City staff recommends approval of Ordinance No. 22-M-06 amending Chapter 21 Community Development of the City of Schertz Code of Ordinances by adding Article III Enterprise Zones, enabling nomination of qualifying projects to the State of Texas for designation as enterprise projects.