Council adopts tax abatement procedure policy
Guidelines, including for properties in TIF district, established
August 19, 2009
The Crawford County Council, meeting at the county judicial complex in English, last Tuesday night voted 6-1 to adopt a resolution establishing requirements for the application and approval of economic revitalization area designation and for property tax abatement.
Councilman Jim Taylor cast the dissenting vote.
"I think if anybody gets a tax abatement, everybody who starts a business should get one," he said, explaining he would favor an ordinance that gives every new business an abatement.
Tax abatements do not reduce the property tax that is being captured on a piece of land prior to a company developing on it. They only temporarily reduce the amount of taxes paid on improvements, such as equipment, with the reduction decreasing each subsequent year of the abatement. The policy adopted by the Crawford County Council allows for abatements of up to 10 years.
The council took up the resolution because one company has already indicated it will request an abatement and another is expected to do so.
The 10-page policy, drafted by the council's attorney, Marcus Burgher IV, outlines what prospective businesses seeking a tax abatement must do when applying and, if successful, then must do each year to ensure compliance.
Highlights include requiring applicants to pay a fee to cover administrative costs and real economic benefits in the form of jobs and wages.
Burgher also created a thorough application as part of the resolution that will provide the county background information, such as the planned funding sources and whether the company has sought abatements elsewhere.
The process, Burgher said, is simple. The application and required supplemental documents first will be reviewed by Burgher to ensure everything is in order. The county redevelopment commission then will consider the abatement request and make a recommendation to the county council.
The applicant will make a presentation to the council, which then will either deny the request, at which point it dies, or pass a preliminary resolution approving the abatement. If it does the latter, a public hearing will be scheduled so the public will have an opportunity to ask questions and make comments, and a second reading of the resolution and final vote will occur.
Taxpayers who disagree with an approved abatement request, Burgher said, would be able to file a public dispute, most likely challenging the declaration of the abated property as an economic development revitalization area, which it would need to be to be eligible for an abatement.
While Matthew Smith and Jeff Roll of Smith Creek LLC, which wants to construct an animal bedding shaver facility on 30-plus acres on the old Eckerty quarry site, listened intently as Burgher detailed the policy to the council, members of the Concerned Citizens of Crawford County, a group that is opposing construction of a biomass plant near Milltown, were just as attentive.
Liberty Green Renewables LLC, which has announced plans to build a 28-megawatt woody biomass-to-electricity plant northwest of the intersection of state roads 64 and 66 North, has not asked for a tax abatement but is expected to do so in the coming weeks or months.
Many of the questions asked by the Concerned Citizens, including whether the application will require background information about a company's partners and if a provision could be included that would prohibit approval of a tax abatement if a certain percentage of residents were in opposition, seemed aimed at the biomass plant.
Burgher said the abatement policy should protect the county with the information required in the application, but it shouldn't be so restrictive that it quells economic development.
The policy, however, does require applicants requesting an abatement in an already established Tax Increment Financing district to present a letter from the majority of all the property owners in the district indicating support of the area being designated as an economic revitalization area.
The site of the proposed biomass plant is located in a TIF district, and, therefore, would be subject to such a requirement.
Following discussion, the council adopted the policy drafted by Burgher with a few additions and clarifications.
Council President Jerry Brewer said having the policy in place should help attract more businesses to the county, because it shows "we're truly dedicated to economic development."
A copy of the resolution is on file at the Crawford County Auditor's Office at the judicial complex.