The Guidelines and Criteria Governing Tax Abatement for Commercial Projects in the City of Lubbock have expired, and in order for the City of Lubbock to continue participating in tax abatement, new guidelines have to be adopted. The proposed guidelines contain minor grammatical changes, updated allowable locations due to changes to the State of Texas Enterprise Zones following the 2020 Census, and updates to the capital investment and job creation criteria to qualify for application. Tax Code Section 312.002 requires that the governing body of a taxing unit hold a public hearing regarding the proposed adoption, amendment, repeal, or reauthorization of tax abatement guidelines and criteria, at which point members of the public are given the opportunity to be heard. This public hearing was held on April 9, 2024. Below is a general summary of the proposed commercial tax abatement guidelines:
- General Purpose: To promote high quality commercial development and improved quality of life in designated enterprise zones.
- Maximum Term: 5 Years
- Eligible Property: Improvements to Real Property and Tangible Personal Property
- Non-Eligible Property: Real Property; inventories or supplies; tools, furnishings and other forms of movable personal property; vehicles; aircraft; housing; boats; property owned by the State of Texas or any State agency; and, property owned or leased by a member of the affected Jurisdiction that did not have an active tax abatement in place before they became a member of the governing body or commission.
- Types of Companies: Retail, Service, and Office
- Location: Allowed only in the following designated Enterprise Zone Areas:
- EZ Block Groups
- Census Tract 2.02, Block Groups 1 and 2
- Census Tract 3.01, Block Groups 1, 2 and 3
- Census Tract 6.07, Block Groups 1 and 2
- Census Tract 9.01, Block Group 1
- Census Tract 10.00, Block Groups 1 and 2
- Census Tract 12.00, Block Groups 1, 2 and 3
- Census Tract 13.00, Block Groups 1, 2 and 3
- Census Tract 14.01, Block Groups 1, 2 and 3
- Census Tract 14.02, Block Group 1
- Census Tract 23.02, Block Groups 1 and 2
- Census Tract 24.01, Block Groups 1, 2 and 3
- Census Tract 24.02, Block Group 2
- Other Eligibility Requirements: To qualify for commercial tax abatement, a company must modernize or expand an existing facility, or construct a new facility, and must clearly add to the Lubbock economic base. The company must show that if it is based qualifying on the job requirements, the jobs being proposed will not simply displace other, similar jobs in the community.
- Investment / Job Criteria:
- $5 million investment, and
- Twenty-five (25) new, permanent jobs, and at least 30% of the business' new employees in the zone are residents of any zone within the governing body's jurisdiction.
- Qualifiers: Approving the guidelines does not obligate the jurisdiction to provide tax abatement to any applicant.
- Variances: The City Council can vary any of the requirements not required by the statute, with a three-quarter vote.
Four companies have received a Commercial Tax Abatement in the City of Lubbock since 2010:
- Luma Properties I: 5-year, declining abatement
- Raider Park, LP: 5-year, declining abatement
- Tao & R and N Investments II: 5-year, declining abatement
- Verizon Data Center: 5-year, declining abatement
If approved, the effective date of the Commercial Tax Abatement Guidelines will be April 24, 2024. |