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Consider a memorandum/resolution readopting the Guidelines and Criteria for Tax Abatement.
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DATE: May 20, 2025
TO: Kent Cagle, City Manager
FROM: Wallis Meshier, Executive Director of Development Services
SUBJECT: Readoption of Guidelines and Criteria for Tax Abatement
BACKGROUND AND FINDINGS:
In order to offer tax abatement, the City of Killeen is required to establish guidelines and criteria governing tax abatement (Texas Tax Code ? 312.002). The Tax Code provides that the guidelines and criteria adopted are effective for two years from the date adopted. Guidelines and Criteria for Granting Tax Abatement in Reinvestment and Enterprise Zones were originally adopted by the City of Killeen in 1996. They have been re-adopted every two years since but have been modified to stay current with state law.
The proposed amendments to the guidelines focus on two key areas:
1. Residential Tax Abatement Guidelines
* Expand eligibility for residential tax abatement to all residential typologies, recognizing the importance of housing investment in revitalizing distressed areas.
* To qualify for residential tax abatement, projects must meet specific investment requirements:
o For new residential facilities, the investment must exceed 300% of the base year taxable value.
o For modernized residential facilities, the required investment is 50% of the base year taxable value.
2. Commercial Tax Abatement Guidelines
* Increased Minimum Investment: The guidelines for commercial facilities will see an increase in the minimum investment required to qualify for tax abatement. Projects must now involve an investment that is at least 300% of the base year taxable value, with a minimum overall investment of $5,000,000.
* Job Creation Provisions: A new provision will require that at least 50% of the jobs created by commercial facilities receiving tax abatement must offer salaries at or above 150% of the area median income. This provision aims to ensure that the j...
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