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HomeMy WebLinkAboutEstablishing Policies- Granting of a Property Tax Exemption IC 6-1.1-10-44 Information Technology Equipment RESOLUTIOIV 4089-11 Passed by the Common Council of the City of South Bend, Indiana March 14, 2011 Attest: City Clerk Attest� President of Common Council Presented by me to the Mayor of the City of South Bend, Indiana March 15, 20 11 City Clerk Approved and signed by me 20 . �.�-y t''-,e �"y` _ � RESOLUTION NO. `L���J�I A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, ESTABLISHING POLICIES AND FORMS OF RESOLUTIONS TO BE USED IN CONNECTION WITH THE CONSIDERATION OF THE GRANTING OF A PROPERTY TAX EXEMPTION PURSUANT TO INDIANA CODE 6-1.1-10-44 FOR QUALIFIED ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT WHEREAS, with the enactment of Indiana Code 6-1.1-10-44 (the "Act"), the General Assembly recognized that the State of Indiana (the "State") and its local governmental units were at a competitive disadvantage with surrounding states in attempting to attract companies that have as their primary business the provision of computing, networking, or data storage services because in surrounding states the enterprise information technology equipment necessary to provide such services are not subject to property taxation unlike in Indiana, where, absent the application of the Act, such enterprise information technology equipment would be subject to property taxation; and WHEREAS, the Act was enacted to law in 2009 for the purpose of permitting companies that would propose to locate facilities dedicated to computing, networking, or data storage activities in Indiana to request and, upon approval of the appropriate legislative body, receive a property tax exemption for the enterprise information technology equipment necessary to provide such services; and WHEREAS, the Common Council ("Common Council") of the City of South Bend, Indiana(the "City"),recognizes the unique location and technological advances available in the City to campanies looking to locate computing, networking, or data storage facilities in the City which meet the statutory thresholds of business investment in the aggregate of at least $10,000,000 ir real and personal property and agree to the average wage of the business of at least 125%of the county average wage for St. Joseph County; and WHEREAS, the Common Council desires to set forth its policy that it seeks to encourage the�levelopment of computing,netwarking and data storage service facilities within the City; and WHEREAS, the Common Council desires to set forth the process the Common Council will t�ndertake when asked by a company for a tax exemption under the Act for its enterprise information technology equipment in order to evidence its intent to attract these types of businesses to the City. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, �ildiana, as follows: 6DD[301 6547b71��' SECTION I. The Common Council:approves of the basic form of declaratory resolution and basic form of Letter Agreement attached hereto as Exhibit A and the basic form of confirmatory resolution attached hereto as Exhibit B which are incorporated herein by reference. In order to set forth a process for the consideration of a tax exemption requested by a company that would constitute an "Eligible Business" as defined by the Act for enterprise information technology equipment that would constitute "Qualified Property" as defined by the Act, the Council agrees that is appropriate to utilize the basic forms of resolutions and the agreement in order to request the approval of the Common Council for such an exemption under the Act. SECTION II. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. � i v Member of t e Common Council Fj�eC$ 1�1 '����'�'�,Q'�$��t' b ��.�� _ ._ _ . .,� . �°RES�NTED 3— Iy—I, QS SU, S , �rOT, ;QPRttOVIt� �'Eh ? � 2i1i1 �DOP7�f>, ' 3—l`�—�\ a�s S u.b.T���c� Ji��1i�dt'10�DE � BDDBOI 6547671�2 - 2 - C17Y CI,�R9C,SO41T'H�EWD,I�i � TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 11-16 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, ESTABLISHING POLICIES AND FORMS OF RESOLUTIONS TO BE USED IN CONNECTION WITH .THE CONSIDERATION OF THE GRANTING OF A PROPERTY TAX EXEMPTION PURSUANT TO INDIANA CODE 6-1.1-10-44 FOR QUALIFIED ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT RespectFully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable � recommendation as substituted. This bill was heard by the Community and Economic Development Committee. Timothy Rouse Chairperson, Committee of the Whole EXHIBIT A Form of Declaratory Resolution and Letter Agreement See attached BDDBOI 6547671v2 - 3 - RESOLUTION NO. DECLARATORY RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND,INDIANA, AUTHORIZING A PROPERTY TAX EXEMPTION FOR CERTAIN ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT PURSUANT TO INDIANA CODE 6-1.1-10-44 ( PROJECT LOCATED AT (STREET ADDRESS) IN THE COUNCIL DISTRICT) WHEREAS, Indiana Code 6-1.1-10-44 (the "Act") authorizes the Common Council (the "Common Council") of the City of South Bend, Indiana (the "City") to make a determination that certain qualified personal property owned by a eligible business is exempt from property taxation to the extent such property is located in the City; and WHEREAS, (the "Company"), has announced its plans to locate a[computing,networking,or data storage] facility(the"Project") at in the City(the "Site"); WHEREAS, the jobs to be created by the Project will have an average employee wage of$ and the Project will result in a capital investment of$ in real and personal property improvements; and WHEREAS, the Company has presented to this Common Council a Letter Agreement, a form of which is attached hereto as Exhibit A and the terms of which are incorporated herein (the "Agreement"), in which Agreement the Company describes the Project, and pursuant to which the Company requests that this Common Council determine that (i) the Company is an "Eligible Business" as defined herein and in the Act; and(ii) certain of the personal property to be owned by the Company and located at the Site listed at Exhibit A to the Agreement and including any equipment which may replace such equipment (the "Computer Equipment") is "Qualified Property" as defined herein and in the Act and therefore qualifies for the property tax exemption provided by the Act; and WHEREAS, as used herein and as defined in the Act, "Qualified Property" means certain enterprise information technology equipment acquired after June 30, 2009, which would include any of the personal property listed below, but would not include computer hardware designed for a single user, workstation, or departmental level use: (a) Hardware supporting computing, networking, or data storage function, including servers and routers; (b) Networking systems having an industry designation as equipment within the "enterprise" or "data center" class of networking systems that support the computing,networking, or data storage functions; or BDDBOI 6546518v3 (c) Generators and other equipment used to ensure an uninterrupted power supply to the equipment described in subparagraph (a) or(b) above; and WHEREAS, 'Bligible Business" as used herein and defined in the Act means an entity that meets each of the following requirements: (a) The entity is engaged in a business that operates one or more facilities dedicated to computing, networking or data storage activities; (b) The entity is located in a facility or data center in Indiana; (c) The entity invests in the aggregate at least$10,000,000 in real and personal property in Indiana after June 30, 2009; and (d) The �verage employee wage of the entity is at least 125% of the county average wage for each county in which the entity conducts its business operations; and WHEREAS, the Company has certified in the Agreement that (i) it qualifies as an Eligible Business and (ii) the Computer Equipment constitutes Qualified Property; and WHEREAS, the Project and the real and personal property improvements to be made by the Company at the Site by the Company will benefit the welfare of all citizens and taxpayers of the City; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council hereby makes the following findings based upon the information provided by the Company in the Agreement: A. The Company constitutes an Eligible Business; and B. The Computer Equipment constitutes Qualified Property. SECTION II. Subject to the completion of the procedures required by the Act and described below, the Common Council provisionally declares the Computer Equipment to be exempt from property taxation, which exemption will continue for an unlimited period of time, provided that the Company continues to qualify as an Eligible Business and the Computer Equipment continues to qualify as "Qualified Property" under the Act. SECTION III. The Common Council hereby authorizes a notice of the adoption and the substance of this Declaratory Resolution to be published in accordance with Subsection(g) of the Act and the Clerk is hereby authorized to cause to be filed a copy of the notice and this resolution with each taxing unit located in the County. Additionally, a copy of this Declaratory Resolution shall be filed with the St. Joseph County Assessor's office. The notice shall specify a date when the Common Council will receive and hear all remonstrances and objections from interested persons. Following such hearing, the Common Council will consider the adoption of a BDDBOI 6546518v3 -2 - confirming resolution to modify, confirm or rescind this Declaratory Resolution and authorize the execution of the Agreement by the Mayor and the Clerk, for an on behalf of the City, granting the property tax exemption authorized under the Act for the Qualified Property. SECTION IV. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. Member of the Common Council BDDBOI 6546518v3 - 3 - EXHIBIT A LETTER AGREEMENT (see attached) BDDBO 1 6546518v3 LETTER AGREEMENT REGARDING ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT TAX EXEMPTION , 20 The Common Council City of South Bend, Indiana 227 West Jefferson Blvd. • Suite 400 S South Bend, Indiana 46601 Dear Honorable Council Members: (the "Company") requests that the Common Council (the "Common Council") of the City of South Bend, Indiana (the "City"), take such action as is necessary and required pursuant to Indiana Code § 6-1.1-10-44 (the "Act") in order to determine that certain enterprise information technology equipment of the Company is exempt from property taxation pursuant to the Act. The Company proposes to locate a project at (the "Site") which is located within the boundaries of the City (the "Project") which Project will result in a capital investment in real and personal property at the Site of$ . $ of the personal property improvements will be attributable to the installation at the Site of enterprise information technology equipment which will include but be not limited to the equipment listed at Exhibit A attached hereto and incorporated herein and also any enterprise information technology equipment which may in the future replace the equipment listed at Exhibit A. Additionally, the jobs created by the Project will result in an average employee wage of$ , which is at least/exceeds 125% of the county average wage for St. Joseph County, Indiana. On behalf of the Company, the undersigned hereby certifies that Company constitutes an "Eligible Business" as such term is defined in the Act because the Company meets each of the following requirements: (a) The Company is engaged in a business that, upon completion of the Project, will operate one or more facilities dedicated to computing, networking, or data storage activities; (b) The Company is located in a facility or data center in Indiana; (c) The Company will have invested upon completion of the Project in the aggregate at least $10,000,000 in real and personal property which investment will have occurred after June 30, 2009; and BDDBOI 6546827v3 (d) The average employee wage of the Company at the Site is at least 125% of the county average wage for St. Joseph County, Indiana. The undersigned, for and on behalf of the Company, further hereby certifies that the enterprise information technology equipment listed at Exhibit A attached hereto and incorporated herein is Qualified Property because it has been or will be purchased after June 30, 2009, and it constitutes: (1) Hardware supporting computing, networking, ar data storage function, including servers and routers; (2) Networking systems having industry designation as equipment within the "enterprise" or "data center" class of networking systems that support the computing, networking, or data storage functions; or (3) Generators and other equipment used to insure an uninterrupted power supply to equipment described subparagraph (1) or(2) above. The undersigned further certifies for and on behalf of the Company that none of the Qualified Property constitutes computer hardware designed for single user, workstation or departmental level use. The Company requests that all enterprise information technology equipment which would constitute Qualified Property as defined herein and in the Act be deemed exempt from property taxation as provided by the Act. The Company acknowledges and agrees that, to the extent that it no longer qualifies as an Eligible Business as defined herein and under the Act or to the extent that the enterprise information technology equipment for which the Company desires the tax exemption no longer qualifies as "Qualified Property" as defined herein or in the Act, said enterprise information technology equipment will no longer be subject to the tax exemption. (the "Company") By: Printed Name: Its: -2- BDDBO 1 6546827v3 CITY ACKNOWLEDGEMENT: The undersigned, acting for and on behalf of the City, enters into and acknowledges the terms of the foregoing Letter Agreement. The Common Council, having adopted a declaratory resolution (Resolution No. , adopted on , 20�, provided notice as required by the Act, and adopted a confirming resolution (Resolution No. , adopted on , 20_� determining to grant the tax exemption provided by the Act, has completed the actions necessary under the Act by the City to grant a property tax exemption for the Qualified Property of the Company for an unlimited term so long as the Company meets the requirements of this Agreement and the Act. CITY OF SOUTH BEND, INDIANA , 20 Mayor ATTEST: City Clerk -3- BDDB01 6546827v3 EXHIBIT A Qualified Property Listin� BDDBOI 6546827v3 EXHIBIT B Form of Confirming Resolution See Attached BDDBOI 6547671v2 - 4 - RESOLUTION NO. A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND,INDIANA, MAHING A FINAL DETERMINATION AND CONFIRMING A PROPERTY TAX EXEMPTION FOR CERTAIN ENTERPRISE INFORMATION TECHNOLOGY EQUIPMENT PURSUANT TO INDIANA CODE 6-1.1-10-44 ( PROJECT LOCATED AT (STREET ADDRESS� IN THE COUNCIL DISTRICT) WHEREAS, the Common Council (the "Common Council") of the City of South Bend, Indiana (the "City"), pursuant to Resolution No. adopted by the Common . Council on , (the "Declaratory Resolution"),provisionally declared subject to the completion of the proceedings set forth in Indiana Code 6-1.1-10-44 (the"Act") and Section III of the Declaratory Resolution that (i) (the "Company") constitutes an Eligible Business under the Act and the Declaratory Resolution; (ii) certain personal property of the Company will constitute Qualified Property (the "Qualified Property") under the Act and the Declaratory Resolution; and (iii) the Qualified Property will be exempt from property taxation for an unlimited term provide that the Company continues to qualify far the exemption hereunder and under the Act; and WHEREAS, pursuant to the Act and Indiana Code 5-3-1, public notice of the adoption and the substance of the Declaratory Resolution was provided as well as setting forth that a public hearing would be held on , , to receive and hear all remonstrances and objections from interested persons; and WHEREAS, a copy of the Declaratory Resolution and the public notice referenced above was filed with the office of the St.Joseph County Assessor and with each taxing unit located in the County; and WHEREAS, on , , the Common Council received and heard all remonstrances and objections to the Declaratory Resolution from interested persons and considered the evidence presented. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The Common Council hereby confirms its findings in the Declaratory Resolution determining that the Qualified Property of the Company is and shall be exempt from property taxation for an unlimited term provided that the Company continues to qualify for the exemption under the Act. The Common Council hereby approves of the form of Letter Agreement attached to the Declaratory Resolution and authorizes the Mayor and Clerk to execute and attest, respectively, the form of Letter Agreement attached to the Declaratory Resolution. BDDBOI 6546756v2 SECTION II. The Common Council further confirms that the final determination and property tax exemption confirmation for certain enterprise information technology equipment is based on (name of company)'s representations that: (a) It is engaged in a business that operates one or more facilities dedicated to computing, networking or data storage activities; (b) It is located in a facility or data center in Indiana; (c) It invests in the aggregate at least$10,000,000 in real and personal property in Indiana after June 30, 2009; and (d) The average employee wage of the entity is at least 125% of the county average wage for each county in which the entity conducts its business operation. SECTION III. This Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. Member of the Common Council BDDBOI 6546756v2 - 2 -