HomeMy WebLinkAboutOrdinance No. 2021-011 An Ordinance of the City of Arlington, Washington Adopting Provisions Relating to Tax Incentives In Targeted Areas for New Construction of Industrial or Manufacturing Facilities Creat ORDINANCE NO. 2021--011
AN ORDINANCE OF THE CITY OF ARLINGTON, WASHINGTON
ADOPTING PROVISIONS RELATING TO TAX INCENTIVES IN TARGETED AREAS FOR NEW
CONSTRUCTION OF INDUSTRIAL OR MANUFACTURING FACILITIES CREATING
FAMILY LIVING WAGE JOBS
WHEREAS, the City of Arlington was granted the authority to create tax incentives in
targeted areas for new construction of industrial or manufacturing facilities creating family
living wage jobs as a result of Senate Bill 5761 (Chapter 9, 2015 Laws 1st Special Session) and
RCW 84.25; and
WHEREAS, the City Council previously adopted ordinance #2016-008, creating a new
chapter 3.98-Property Tax Exemption, of the Arlington Municipal Code; and
WHEREAS, the state legislature, during the 2021 regular session, proposed changes to
the provisions within House Bill 5761and enacted Engrossed House Bill 1386 which represents
the modifications to property tax exemption for the value of new construction of
industrial/manufacturing facilities in targeted urban areas; and
WHEREAS, the City Council wishes to continue to create tax incentives to support
construction that will create new family living wage jobs; and
WHEREAS,the provisions of Engrossed House Bill 1386 are reflected within this proposed
ordinance;
NOW, THEREFORE, the City Council of the City of Arlington do hereby ordain as follows:
Section 1. Chapter 3.98 of the Arlington Municipal Code (AMC) is hereby revised, to
read as follows:
Chapter 3.98—Property Tax Exemption
3.98.100 Purpose
3.98.110 Applicability
3.98.120 Definitions
3.98.130 Exemption Created
3.98.140 General Requirements
3.98.150 Application
3.98.160 Approval Criteria
3.98.170 Approval/Denial
3.98.180 Application Fee
3.98.190 Additional Requirements
3.98.200 Reporting
3.98.210 Continuance and Discontinuance
3.98.100 Purpose. It is the purpose of this chapter to encourage new
manufacturing and industrial uses on undeveloped or underutilized lands zoned
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for industrial and manufacturing uses within the city through tax incentive,
thereby increasing employment opportunities for family living wage jobs.
3.98.110 Applicability. All undeveloped or underutilized properties within the
city's Light Industrial and General Industrial zones shall be eligible to receive an
ad valorem tax exemption as allowed by Senate Bill 5761 (Chapter 9, 2015 Laws
1st Special Session) and RCW 84.25 for the value of new construction of
industrial/manufacturing facilities.
3.98.120 Definitions. The definitions in this section shall apply to this chapter
unless the context clearly requires otherwise:
(1) "Administrative Authority" means the Department of Community
and Economic Development.
(2) "City" means the City of Arlington.
(3) "Designee" means the Director of Community and Economic
Development.
(4) "Director" means the Director of Community and Economic
Development.
(5) "Family living wage job" means a job that offers health care
benefits with a wage that is sufficient for raising a family. A family living
wage job shall have an average wage of $23 dollars an hour or more,
working 2,080 hours per year on the subject site, as adjusted annually for
inflation by the consumer price index. The family living wage may be
increased by the local authority based on regional factors and wage
conditions.
(6) "Governing Authority" means the Arlington City Council.
(7) "Industrial/manufacturing facilities" means building
improvements that are 10,000 square feet or larger, representing a
minimum improvement valuation of ($800,000.00) for uses categorized
as "division D: manufacturing" or "division E: transportation (major
groups 40-42, 45, or 47-48" by the United States Department of Labor in
the Occupation Safety and Health Administration's standard industrial
classification manual, provided the city may limit the tax exemption to
manufacturing uses.
(8) "Lands zoned for industrial and manufacturing uses" means lands
in the City zoned as of December 31, 2014, for an industrial or
manufacturing use consistent with the City's Comprehensive Plan where
the lands are designated for industry.
(9) "Owner" means the property owner of record.
(10) "Targeted area" means an area of undeveloped lands zoned for
industrial and manufacturing uses in the City that is located with or
contiguous to an innovation partnership zone, foreign trade zone, or EB-5
regional center, and designated for possible exemption under the
provisions of this chapter.
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(11) "Undeveloped or underutilized" means that there are no existing
building improvements on the portions of the property targeted for new
or expanded industrial or manufacturing uses.
3.98.130 Exemption Created
(a) The value of new construction of industrial/manufacturing
facilities qualifying under this chapter is exempt from property taxation
under this title, as provided in this section. The value of new construction
of industrial/manufacturing facilities is exempt from taxation for
properties for which an application for a certificate of tax exemption is
submitted under this chapter before December 31, 2030. The value is
exempt under this section for 10- successive years beginning January 1st
of the year immediately following the calendar year of issuance of the
certificate.
(b) The exemption provided in this section does not include the value
of land or nonindustrial/manufacturing-related improvements not
qualifying under this chapter.
(c) The exemption provided in this section is in addition to any other
exemptions, deferrals, credits, grants, or other tax incentives provided by
law.
(d) This chapter does not apply to state levies or increases in assessed
valuation made by the assessor on non-qualifying portions of buildings
and value of land nor to increases made by lawful order of a county
board of equalization, the department of revenue, or a county, to a class
of property throughout the county or specific area of the county to
achieve the uniformity of assessment or appraisal required by law.
(e) This exemption does not apply to any county property taxes
unless the governing body of the county adopts a resolution and notifies
the governing authority of its intent to allow the property to be
exempted from county property taxes.
(f) At the conclusion of the exemption period, the new
industrial/manufacturing facilities cost shall be considered as new
construction for the purposes of chapter 84.55 RCW.
3.98.140 General requirements. An owner of property making application under
this chapter shall meet the following requirements:
(a) The new construction of industrial/manufacturing facilities shall
be located on land zoned for industrial and manufacturing uses,
undeveloped or underutilized, and as provided in section 6 of Senate Bill
5761 (Chapter 9, 2015 Laws 1st Special Session), designated by the city as
a targeted area;
(b) The new construction of industrial/manufacturing facilities shall
meet all construction and development regulations of the city;
(c) The new construction of industrial/manufacturing facilities shall
be completed within three years from the date of approval of the
application; and
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(d) The applicant shall enter into a contract with the city approved by
the Director of Community & Economic Development, under which the
applicant has agreed to the implementation of the development on
terms and conditions satisfactory to the administrative authority.
3.98.150 Application. An owner of property seeking an exemption under this
chapter shall apply to the city on the application form adopted by the governing
authority. The application shall contain the following:
A. Information setting forth the grounds supporting the
requested exemption, including information indicated on the
application form or in the guidelines;
B. A description of the project and site plan, and other
information requested;
C. A statement of the expected number of new family living
wage jobs to be created;
D. A statement that the applicant is aware of the potential
tax liability involved when the property ceases to be eligible for
the incentive provided under this chapter; and
E. A statement that the applicant would not have built in this
location but for the availability of the tax exemption under this
chapter;
F. The applicant shall verify the application by oath or
affirmation; and
G. The application shall be accompanied by the application
fee required under this chapter. The Director may permit the
applicant to revise an application before final action by the
- Department of Community and Economic Development.
3.98.160 Approval criteria. The duly authorized administrative authority of the
city may approve the application if it finds that:
(1) A minimum of 25 new family living wage jobs will be created on
the subject site as a result of new construction of
manufacturing/industrial facilities within one year of building occupancy;
(2) The proposed project is, or will be, at the time of completion, in
conformance with all local plans and regulations that apply at the time
the application is approved; and
(3) The criteria of this chapter have been satisfied.
(4) Priority must be given to applications that meet the following labor
specifications during the new construction and ongoing business of
industrial/manufacturing facilities:
(a) Compensate workers at prevailing wage rates as determined by
the department of labor and industries;
(b) Procure from, and contract with, women-owned, minority-owned,
or veteran owned businesses;
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(c) Procure from, and contract with, entities that have a history of
complying with federal and state wage and hour laws and regulations;
(d) Include apprenticeship utilization from state-registered
apprenticeship programs;
(e) Provide for preferred entry for workers living in the area where
the project is being constructed; and
(f) Maintain certain labor standards for workers employed at the
facility after construction, including production, maintenance, and
operational employees.
3.98.170 Approval/Denial.
(a) The Director shall approve or deny an application filed under this
chapter within ninety days after receipt of the application.
(b) If the application is approved, the city shall issue the owner of the
property a conditional certificate of acceptance of tax exemption. The
certificate shall contain a statement by the Director that the property has
complied with the required criteria of this chapter.
(c) If the application is denied, the Director shall state in writing the
reasons for denial and send the notice to the applicant at the applicant's
last known address within ten days of the denial.
(d) Upon denial by the Director, an applicant may appeal the denial
to the city's governing authority within thirty days after receipt of the
denial. The appeal before the city's governing authority shall be based
upon the record made before the city with the burden of proof on the
applicant to show that there was no substantial evidence to support the
city's decision. The decision of the city in denying or approving the
application is final.
3.98.180 Application fee. An administrative application fee of $500.00 (five
hundred dollars) plus the required county assessor fee shall be paid at the time
the application for limited exemption is filed. If the application is approved, the
city shall pay the application fee to the county assessor for deposit in the county
current expense fund, after first deducting that portion of the fee attributable to
its own administrative costs in processing the application and administering the
tax exemption program. If the application is denied, the city may retain that
portion of the application fee attributable to its own administrative costs and
refund the balance to the applicant.
3.98.190 Additional requirements.
(a) Upon completion of the new construction of a
manufacturing/industrial facility for which an application for an
exemption under this chapter has been approved and issued a certificate
of occupancy, the owner shall file with the city the following:
(1) A description of the work that has been completed and a
statement that the new construction on the owner's property
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qualify the property for a partial exemption under this chapter;
(2) A statement of the new family living wage jobs to be
offered as a result of the new construction of
manufacturing/industrial facilities; and
(3) A statement that the work has been completed within
three years of the issuance of the conditional certificate of tax
exemption.
(b) Within thirty days after receipt of the statements required under
subsection (a) of this section, the city shall determine whether the work
completed and the jobs to be offered are consistent with the application
and the contract approved by the city and whether the application is
qualified for a tax exemption under this chapter.
(c) If the criteria of this chapter have been satisfied and the owner's
property is qualified for a tax exemption under this chapter, the city shall
file the certificate of tax exemption with the county assessor within ten
days of the expiration of the thirty-day period provided under subsection
(b) of this section.
(d) The city shall notify the applicant that a certificate of tax
exemption is denied if the city determines that:
(1) The work was not completed within three years of the
application date;
(2) The work was not constructed consistent with the
application or other applicable requirements;
(3) The jobs to be offered are not consistent with the
application and criteria of this chapter; or
(4) The owner's property is otherwise not qualified for an
exemption under this chapter.
(e) If the city finds that the work was not completed within the
required time period due to circumstances beyond the control of the
owner and that the owner has been acting and could reasonably be
expected to act in good faith and with due diligence, the Director may
extend the deadline for completion of the work for a period not to
exceed twenty-four consecutive months.
(f) The owner may appeal a decision by the city to deny a certificate
of tax exemption in superior court under RCW 34.05.510 through
34.05.598, if the appeal is filed within thirty days of notification by the
city to the owner of the exemption denial.
3.98.200 Reporting.
(a) Thirty days after the anniversary of the date of the certificate of
tax exemption and each year for the tax exemption period, the owner of
the new industrial/manufacturing facilities shall file with the
Administrative Authority an annual report indicating the following:
(1) A statement of the family living wage jobs at the facility as
of the anniversary date;
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(2) A certification by the owner that the property has not
changed use;
(3) A description of changes or improvements constructed
after issuance of the certificate of tax exemption; and
(4) Any additional information requested by the city.
(b) The City shall report annually by December 31st of each year,
beginning in 2016, to the Department of Commerce. The report shall
include the following information:
(1) The number of tax exemption certificates granted;
(2) The total number and type of new
manufacturing/industrial facilities constructed;
(3) The number of family living wage jobs resulting from the
new manufacturing/industrial facilities; and
(4) The value of the tax exemption for each project receiving a
tax exemption and the total value of tax exemptions granted.
3.98.210 Continuance and discontinuance.
(a) If the value of improvements have been exempted under this
chapter, the improvements continue to be exempted for the applicable
period under this chapter so long as they are not converted to another
use and continue to satisfy all applicable conditions including, but not
limited to, zoning, land use, building, and family wage job creation.
(b) If an owner voluntarily opts to discontinue compliance with the
requirements of this chapter, the owner shall notify the assessor within
60 days of the change in use or intended discontinuance.
(c) If, after a certificate of tax exemption has been filed with the
county assessor, the city discovers that a portion of the property is
changed or will be changed to disqualify the owner for exemption
eligibility under this chapter, the tax exemption shall be canceled and the
following occurs:
(1) Additional real property tax shall be imposed on the value
of the non-qualifying improvements in the amount that would be
imposed if an exemption had not been available under this
chapter, plus a penalty equal to 20 percent of the additional
value. This additional tax is calculated based upon the difference
between the property tax paid and the property tax that would
have been paid if it had included the value of the non-qualifying
improvements dated back to the date that the improvements
were converted to a non-qualifying use;
(2) The tax shall include interest upon the amounts of the
additional tax at the same statutory rate charged on delinquent
property taxes from the dates on which the additional tax could
have been paid without penalty if the improvements had been
assessed at a value without regard to this chapter; and
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(3) The additional tax owed together with interest and penalty
becomes a lien on the property and attaches at the time the
property or portion of the property is removed from the
qualifying use under this chapter or the amenities no longer meet
the applicable requirements for exemption under this chapter. A
lien under this section has priority to, and shall be fully paid and
satisfied before, a recognizance, mortgage, judgment, debt,
obligation, or responsibility to or with which the property may
become charged or liable. The lien may be foreclosed upon
expiration of the same period after delinquency and in the same
manner provided by law for foreclosure of liens for
delinquent real property taxes. An additional tax unpaid on its due
date is delinquent. From the date of delinquency until paid,
interest shall be charged at the same rate applied by law to
delinquent property taxes.
(4) If, after a certificate of tax exemption has been filed with
the county assessor, the city discovers that the facility maintains
fewer than 25 family living wage jobs, the owner is considered
ineligible for the exemption under this chapter, and the following
must occur:
(a) The tax exemption must be canceled; and
(b) Additional real property tax must be imposed in the
amount that would be imposed if an exemption had not been
available under this chapter, dated back to the date that the
facility last maintained a minimum of 25 family living wage jobs.
(d) Upon a determination that a tax exemption is to be terminated
for a reason stated in this section, the Director shall notify the record
owner of the property as shown by the tax rolls by mail, return receipt
requested, of the determination to terminate the exemption. The owner
may appeal the determination to the city, within 30 days by filing a notice
of appeal with the city, which notice shall specify the factual and legal
basis on which the determination of termination is alleged to be
erroneous. At an appeal hearing, all affected parties may be heard and all
competent evidence received. After the hearing, the governing authority
shall either affirm, modify, or repeal the decision of termination of
exemption based on the evidence received. An aggrieved party may
appeal the decision of the governing authority to the superior court as
provided in RCW 34.05.510 through 34.05.598.
(e) Upon determination by the city to terminate an exemption, the
county officials having possession of the assessment and tax rolls shall
correct the rolls in the manner provided for omitted property under RCW
84.40.080. The county assessor shall make such a valuation of the
property and improvements as is necessary to permit the correction of
the rolls. The value of the new industrial/manufacturing facilities added
to the rolls is considered new construction for the purposes of chapter
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84.40 RCW. The owner may appeal the valuation to the county board of
equalization as provided in chapter 84.40 RCW. If there has been a failure
to comply with this chapter, the property shall be listed as an omitted
assessment for assessment years beginning January 1st of the calendar
year in which the noncompliance first occurred, but the listing as an
omitted assessment may not be for a period more than three calendar
years preceding the year in which the failure to comply was discovered.
Section 2. Severability. If any provision, section, or part of this ordinance shall be
adjudged to be invalid or unconstitutional, such adjudication shall not affect the validity of the
ordinance as a whole or any section, provision or part thereof not adjudged invalid or
unconstitutional.
Section 3. Effective Date. This ordinance shall be effective five days from its
adoption and publication as required by law.
PASSED BY the City Council and APPROVED by the Mayor this 18th day of
October, 2021.
CITY OF ARLINGTON
----
Barbara. J
Tolbert, Mayor
Attest:
Wendy Van Der Meersche, City Clerk
Approved as to form:
Ste n J ei
City Attorney
ORDINANCE NO. 2021-011 9
CERTIFICATION OF ORDINANCE
I, Wendy Van Der Meersche, being the duly appointed City Clerk of the City of Arlington,
Washington, a municipal corporation, do hereby certify that the following Ordinance
No. 2021-011 was approved at the October 18, 2021 City Council meeting.
ORDINANCE NO. 2021-011
"AN ORDINANCE OF THE CITY OF ARLINGTON,WASHINGTON
ADOPTING PROVISIONS RELATING TO TAX INCENTIVES IN TARGETED AREAS FOR NEW
CONSTRUCTION OF INDUSTRIAL OR MANUFACTURING FACILITIES CREATING
FAMILY LIVING WAGE JOBS"
A true and correct copy of the original ordinance is attached.
Dated this 19th day of October, 2021.
Wendy Van er Meersche
City Clerk for the City of Arlington