An incentive agreement shall include all of the following:
(a) A requirement that the employer shall complete the annual reporting forms with any requested supporting documentation and submit them to Council and the Tax Administrator by February 28th of each year. Council or the Tax Administrator will review the information with the employer to determine compliance with the tenants of the incentive agreement, and then Council will grant, modify or cancel the incentive agreement and credits.
(b) A covenant that the employer will maintain "operations" within the district for at least three years after the term of the credits. "Operations" means the level of payroll of the employer at the time of the incentive agreement plus the payroll subject to any credits. If the employer fails to comply with this covenant, Council may "claw-back" all or a portion of the credits granted according to the following guidelines:
(1) If the employer maintained the operations within the district for less than the term of the credits, the amount required to be refunded shall not exceed the amount of credits previously allowed.
(2) If the employer maintained operations within the City borders longer than the term of the credits, the amount of credits required to be refunded shall not exceed the following:
A. Less than one year after the term of the credits - 100 percent.
B. At least one year but less than two years after the term of the credits - sixty-six percent.
C. At least two years but less than three years after the term of the credits - thirty-three percent.
(c) A representation that receiving the credits is a major factor in the employer's decision to hire the new FTEs.
(d) A detailed description of (1) the capital improvement project, if any, undertaken by the employer in connection with hiring the new FTEs, including the amount of the investment, the period over which the investment has been or is being made and (2) the number of current FTE positions of the employer within the district, the current payroll of employees within the district as a result of the credits and the number of anticipated new FTEs and payroll created by those new FTEs.
(e) The term and percentage of the credits and the first year for which the credits may be claimed.
(f) A requirement that the taxpayer annually report to the Board and the Tax Administrator the number of FTE positions subject to the incentive agreement, the amount of tax withheld from employees in those positions, the amount of payments made for any capital investment project, and any other information reasonably required by the Board or that the Tax Administrator needs to perform the Tax Administrator's duties.
(g) A provision that if the employer fails to meet or comply with any conditions or requirements set forth in its incentive agreement, Council may reduce the percentage or term of the credits. The amount of the credits will be calculated annually based on the employer's performance in meeting its payroll and employment projections. The credits may be adjusted according to the schedule below at the option of Council:
% of Payroll Projections Met | % of Credits Allowed |
90-100% | Full credits |
85-89% | Reduced credits by 5% |
80-84% | Reduced credits by 10% |
75-79% | Reduced credits by 15% |
Less than 75% | No grant for that year |
(h) A statement that the confidentiality of any information submitted by an employer to Council or Tax Administrator shall be protected to the maximum extent permitted by law.
(i) A provision that for the purpose of claiming credits, a taxpayer may include a partnership or an election under Sub Chapter S of the Internal Revenue Code, or any other business entity through which income flows as a distributive share to its owners. All amounts shall be apportioned among the persons to whom the income or profit of the entity is distributed.
(Ord. 3163. Passed 3-9-15.)