HomeMy WebLinkAboutOrdinance 2016-008 Adopting Provisions Relating to Tax Incentives in Targeted Areas for New Construction of Industrial or Manufacturing Facilities Creating Family Living Wage Jobs ORDINANCE NO. 2016-008
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 has been 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 passed Resolution No. 2016-005 which notified
the public of its intent to create targeted areas in support of this authority, which resolution
scheduled a public hearing for May 2, 2016; and
WHEREAS, the City Council conducted a public hearing on May 2, 2016; and
WHEREAS, the City Council wishes to create tax incentives to support construction that
will create new family living wage jobs;
NOW, THEREFORE, the City Council of the City of Arlington do hereby ordain as
follows:
Section 1. A new chapter 3.98 of the Arlington Municipal Code (AMC) is hereby
created, 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
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3.98.100 Purpose. It is the purpose of this chapter to encourage new
manufacturing and industrial uses on undeveloped or underutilized lands zoned
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 with a wage that is sufficient
for raising a family. A family living wage job shall have an average wage
of eighteen dollars an hour or more, working two thousand eighty hours
per year on the subject site, as adjusted annually for inflation by the
consumer price index.
(6) "Governing Authority"means the Arlington City Council.
(7) "Industrial/manufacturing facilities" means building improvements
that are ten thousand square feet or larger, representing a minimum
improvement valuation of eight hundred thousand dollars ($800,000.00)
for uses categorized as "division D: manufacturing" by the United States
Department of Labor in the Occupation Safety and Health
Administration's standard industrial classification manual.
(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
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regional center, and designated for possible exemption under the
provisions of this chapter.
(11) "Undeveloped or underutilized" means that there are no existing
building improvements on the property or 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, 2022. The value is
exempt under this section for ten successive years beginning January 1 st
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
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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
(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 twenty-five 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.
3.98.170 Approval/Denial.
(a) The Director shall approve or deny an application filed under this
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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 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
ORDINANCE NO. 2016-008 5
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;
(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 31 st 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
ORDINANCE NO. 2016-008 6
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
sixty 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 twenty 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
(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
ORDINANCE NO. 2016-008 7
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.
(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 thirty 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 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 1 st 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.
ORDINANCE NO. 2016-008 8
PASSED BY the City Council and APPROVED by the Mayor this 2nd day of May,
2016.
CITY OF ARLINGTON
3�'— TW—IA/
Barbara Tolbert, Mayor
Attest:
Kristi Banfield, City derk
Approved as to form:
-::�Q
St en . iffle
Ci ttorney
ORDINANCE NO. 2016-008 9
CERTIFICATION OF ORDINANCE
I, Kristin Banfield, being the duly appointed and acting Clerk of the City of Arlington,
Washington, a municipal corporation, do hereby certify that the following Ordinance No. 2016-
008 was approved at the May 2, 2016 City Council meeting.
ORDINANCE NO. 2016-008
"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 9`h day of May, 2016.
Kristin anfield
City Clerk for the City of Arlington
SUMMARY OF ORDINANCE ADOPTION
You are hereby notified that on May 2, 2016, the City Council of the City of Arlington,
Washington, did adopt Ordinance No. 2016-008 entitled,
"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"
This ordinance is effective five days from passage and publication, except as otherwise
specified in the ordinance.
The full text of the ordinance is available to interested persons and will be mailed upon
request.
Kristin Banfield
City Clerk
City of Arlington