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HomeMy WebLinkAbout9B - EDA Business Ast. Policy AGENDA ITEM: DISCUSSION: (H1-l,7~~~ CITY COUNCIL AGENDA REPOR~ ~I, ~t.~-- JANUARY 18, 2000 9B DONALD RYE, PLANNING DIRECTOR CONSIDER APPROVAL OF ECONOMIC DEVELOPMENT AUTHORITY RECOMMENDATIONS FOR BUSINESS ASSISTANCE POLICY History Minnesota Statutes 1161.993 through 116J.995 requires that, after August 1, 1999, any local government agency granting subsidies or incentives to businesses may do so only after adopting criteria for granting such incentives. A public hearing must be held on the criteria before adoption. The law allows considerable flexibility to local governments in developing these criteria but requires that subsidies must meet a public purpose. Job retention can only be used as a public purpose when the job loss is imminent and reasonably demonstrable. While the law does not require that these public purposes be addressed in the criteria, there is nothing to prevent the City from doing so. As used in the statute, the tenn subsidy has a broad meaning. Subsidies include the following: . State or local agency grants to business . Tax increment financing assistance . Reduction or deferral of taxes or fees . Tax abatement . Contributions of real or personal property . Loan rates below commercially available rates . Guarantees of payments under any loan or lease . Preferential use of government facilities or property There are 18 specific activities listed in the statute (copy attached) which are not considered subsidies. In establishing the criteria to be used in evaluating potential subsidies or incentives, the statute gives very little direction, other than to require that the criteria contain a wage policy for any jobs created through the subsidy. As a result, the City has considerable discretion in developing the criteria and the degree of specificity of these criteria. Also attached is a copy of the policy recently adopted by Scott County in response to the statutory requirements. 162D~0iagBs\6OH:mk\1t9m.l~ior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER '-'-.'n"T" T ..... .. T."-"-'----'---" ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: L:\OOFILES\OOEDA\C9Bl1800.DOC Current Circumstances The EDA considered the issue of subsidies at both the November and December EDA meetings. It was the consensus that a policy which closely followed the County policy was desirable, both because the County policy allows for flexibility and it was felt that a high degree of consistency between policies in the County was desirable. Issues The primary issues are twofold: first, whether the Council wishes to retain the ability to assist businesses in the future and second, the degree of flexibility the City wishes to have if it elects to assist businesses in the future. If the City fails to adopt a policy, this means the City would be unable to offer any of the forms of assistance listed above in the future. Adoption of a policy does not require the City to offer any forms of assistance but it does allow assistance for businesses which, in the Council's opinion, would satisfy one of the following public purposes: 1) enhancing economic diversity, 2) assisting high quality job growth, 3) stabilizing the community, 4) increasing and enhancing the tax base and 5) aiding in job retention where job loss is imminent and demonstrable. Adoption of the criteria proposed by the EDA can only occur after a public hearing on the criteria has been held. Staff did not schedule a public hearing for this Council meeting because of the possibility the Council might make significant changes in the policy recommended by the EDA, in which event the public hearing would then be held on the modified policy. Conclusion It is up to the Council to determine if it wishes to have a business assistance policy, whether it wishes to proceed with the policy recommended by the EDA or with a modified policy and, if so, to direct staff to schedule a public hearing on the matter. 1. Elect not to adopt a business assistance policy 2. Elect to adopt a business assistance policy and direct staff to schedule a public hearing on the proposed policy Motion to direct staff to schedule a public hearing on the proposed business assistance policy Frank Bo 2 ECONOMIC DEVELOPMENT INCENTIVES POLICY Introduction This Policy is adopted for purposes of the Business Subsidies Act (the "Act), which is Minnesota Statutes, Sections 1 16J.995 through l16J995. Terms used in this Policy are intended to have the same meanings as used in the Act. A business subsidy, as defined in Minn. Stat. 1 16J.993(3), is herein referred to as an economic development incentive. This Policy shall apply only with respect to incentives granted under the Act if and to the extent required thereby. The essence ofthis policy is to provide the legal and statutory framework for the City Council to utilize economic development incentives pursuant to requirements in law. The adoption of this policy is a prerequisite to determining the level of and extent of any participation by the City of Prior Lake in economic development incentives programs. Economic development incentives seek to realize goals that benefit the community, such as the creation or retention of good paying jobs. Economic development projects may also achieve other worthwhile goals. For instance, some projects provide value to the community in the forms of infrastructure improvements, stabilization of business districts or neighborhoods, or concentration of selected industries. While job creation and retention goals will be required for any economic development project seeking incentives pursuant to this Policy, the City can require that a project seek to achieve additional goals. The goals that economic development projects must pursue to receive incentives under this policy are as follows: . Job creation/retention . Livable wages . Job training . Public infrastructure investment, and . Stable communities Specific goal targets for individual projects will be determined and agreed to between the City and the requestor prior to approval of the economic development incentives by the City Council. Policies and Procedures L:\99FILES\99EDA\EDACORR\ECDEVINC.DOC 1 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER I 1 ill" --'-'-r" .. 1. The applicant will complete the City's Economic Development Incentives application form (Exhibit 1) and submit a minimum deposit of $1 ,000 which is non-refundable to cover City administrative costs. 2. The requestor and the City will draft an economic development incentive agreement for consideration by the City Council. When a tax abatement is requested, the economic development incentive agreement will serve as the abatement agreement. 3. The agreement will include target goals that coincide to the economic development goals identified in this policy. The recipient will report on the progress in achieving agreement goals as prescribed by the business subsidies act. Determination of Goal Targets With respect to incentives, the following principles and criteria shall guide the determination of goal targets: . Each project shall be evaluated on a case by case basis, recognizing its importance and benefit to the community from all perspectives, including created or retained employment positions, infrastructure improvements, stabilization of communities, and industry type. . If a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job or wage goals, as may be permitted by applicable law. . In cases where the objective is the retention of existing jobs, the recipient ofthe subsidy shall be required to provide reasonably demonstrable evidence that the loss of those jobs is imminent. . The setting of wage and job goals must be sensitive to prevailing wage rates, local economic conditions, external economic forces over which neither the City or the recipient of the subsidy has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. Fiscal Limitations . Total City contribution will be limited to the minimum level of assistance needed to make the proposed project feasible and capable of achieving the agreed upon goals. . If the incentive is a tax abatement, the abatement will be on the taxes collected on the value ofthe improvements (buildings) to the property; taxes collected on the value of the land will not be abated. L:\99FILES\99EDA \EDACORR\ECDEVINC.DOC 2 Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, the City of Prior Lake retains the right in its sole discretion to approve projects and subsidies which may vary from the principals and criteria of the Policy. L:\99FILES\99EDA\EDACORR\ECDEVINC.DOC 3 I I T .r.....-..---...-........r........--.-..--------..---- Minnesota Statutes 1999, 116J.993 Page 1 of3 Mi.nnesota Statutes 1999. Table of Chapters Table ofcontSl111~ for Chapter 116J 116J.993 Definitions. Subdivision 1. Scope. For the purposes of sections 116J.993 to 116J.995, the terms defined in this section have the meanings given them. Subd. 2. Benefit date. "Benefit date" means the date that the recipient receives the business subsidy. If the business subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date begins when the recipient puts the equipment into service. If the business subsidy is for improvements to property, then the benefit date refers to the earliest date of either: (1) when the improvements are finished for the entire project; or (2) when a business occupies the property. If a business occupies the property and the subsidy grantor expects that other businesses will also occupy the same property, the grantor may assign a separate benefit date for each business when it first occupies the property. Subd. 3. Business subsidy. "Business subsidy" or "subsidy" means a state or local government agency grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business. The following forms of financial assistance are not a business subsidy: (1) a business subsidy of less than $25,000; (2) assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contaminants as defined in section 116J.552, subdivision 3; (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of the total cost; http://www.revisor.1eg.state.mn.us/stats/116J/993 .html 1/1 0/2000 Minnesota Statutes 1999, 1161.993 (6) assistance provided to organizations whose primary mission is to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) assistance for housing; (8) assistance for pollution control or abatement; (9) assistance for energy conservation; (10) tax reductions resulting from conformity with federal tax law; (11) workers' compensation and unemployment compensation; (12) benefits derived from regulation; (13) indirect benefits derived from assistance to educational institutions; (14) funds from bonds allocated under chapter 474A; (lS) assistance for a collaboration between a Minnesota higher education institution and a business; (16) assistance for a tax increment financing soils condition district as defined under section 469.174, subdivision 19; (17) redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; and (18) general changes in tax increment financing law and other general tax law changes of a principally technical nature. Subd. 4. Grantor. "Grantor" means any state or local government agency with the authority to grant a business subsidy. Subd. 5. Local government agency. "Local government agency" includes a statutory or home rule charter city, housing and redevelopment authority, town, county, port authority, economic development authority, community development agency, nonprofit entity created by a local government agency, or any other entity created by or authorized by a local government with authority to provide business subsidies. Subd. 6. Recipient. "Recipient" means any for-profit or nonprofit business entity that receives a business subsidy. Only nonprofit entities with at least 100 full-time equivalent positions and with a ratio of highest to lowest paid employee, that exceeds ten to one, determined on the basis of full-time equivalent positions, are included in this definition. Subd. 7. State government agency. "State government agency" means any state agency that has the authority to award business subsidies. http://www.revisor.leg.state.mn.us/stats/116J/993 .html i I I ----..--."1"-.......-----..-.------ Page 2 of3 1/10/2000 Minnesota Statutes 1999, 116J.994 Page 1 of5 Minnesota Statutes 1999..Table of Chapters Table ofcontent~ for Chapter 116J l16J.994 Regulating local and state business subsidies. Subdivision 1. Public purpose. A business subsidy must meet a public purpose other than' increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is imminent and demonstrable. Subd. 2. Developing a set of criteria. A business subsidy may not be granted until the grantor has adopted criteria after a public hearing for awarding business subsidies that comply with this section. The criteria must include a policy regarding the wages to be paid for the jobs created. The commissioner of trade and economic development may assist local government agencies in developing criteria. Subd. 3. Subsidy agreement. (a) A recipient must enter into a subsidy agreement with the grantor of the subsidy that includes: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment financing; (2) a statement of the public purposes for the subsidy; (3) goals for the subsidy; (4) a description of the financial obligation of the recipient if the goals are not met; (5) a statement of why the subsidy is needed; (6) a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date; (7) the name and address of the parent corporation of the recipient, if any; and (8) a list of all financial assistance by all grantors for the project. (b) Business subsidies in the form of grants must be structured as forgivable loans. If a business subsidy is not structured as a forgivable loan, the agreement must state the fair market value of the subsidy to the recipient, including the value of conveying property at less than a fair market price, or other in-kind benefits to the recipient. (c) If a business subsidy benefits more than one recipient, the grantor must assign a proportion of the business subsidy to each recipient that signs a subsidy agreement. The proportion assessed to each recipient must reflect a reasonable estimate of http://www.revisor.leg.state.mn.us/stats/116J/994.html 1/10/2000 Minnesota Statutes 1999, 116J.994 Page 2 of5 the recipient's share of the total benefits of the project. (d) The state or local government agency and the recipient must both sign the subsidy agreement and, if the grantor is a local government agency, the agreement must be approved by the local elected governing body, except for the St. Paul Port Authority and a seaway port authority. Subd. 4. Wage and job goals. The subsidy agreement, in addition to any other goals, must include: (1) goals for the number of jobs created, which may include separate goals for the number of part-time or full-time jobs, or, in cases where job loss is imminent and demonstrable, goals for the number of jobs retained; and (2) wage goals for the jobs created or retained. In addition to other specific goal time frames, the wage and job goals must contain specific goals to be attained within two years of the benefit date. Subd. 5. Public notice and hearing. (a) Before granting a business subsidy that exceeds $500,000 for a state government grantor and $100,000 for a local government grantor, the grantor must provide public notice and a hearing on the subsidy. A public hearing and notice under this subdivision is not required if a hearing and notice on the subsidy is otherwise required by law. (b) Public notice of a proposed business subsidy under this subdivision by a state government grantor must be published in the State Register. Public notice of a proposed business subsidy under this subdivision by a local government grantor must be published in a local newspaper of general circulation. The public notice must identify the location at which information about the business subsidy, including a copy of the subsidy agreement, is available. Published notice should be sufficiently conspicuous in size and placement to distinguish the notice from the surrounding text. The grantor must make the information available in printed paper copies and, if possible, on the Internet. The government agency must provide at least a ten-day notice for the public hearing. (c) The public notice must include the date, time, and place of the hearing. (d) The public hearing by a state government grantor must be held in St. Paul. Subd. 6. Failure to meet goals. The subsidy agreement must specify the recipient's obligation if the recipient does not fulfill the agreement. At a minimum, the agreement must require a recipient failing to meet subsidy agreement goals to pay back the assistance plus interest to the grantor provided that repayment may be prorated to reflect partial fulfillment of goals. The interest rate must be set at the implicit price deflator defined under section 275.70, subdivision 2. The grantor, after a public hearing, may extend for up to one year the period for meeting the goals provided in a subsidy agreement. A recipient that fails to meet the terms of a subsidy http://www.revisor.leg.state.mn.us/stats/116J/994.html 1/10/2000 II ~ ----..---.-..--.T- Minnesota Statutes 1999, 116J.994 Page 3 of5 agreement may not receive a business subsidy from any grantor for a period of five years from the date of failure or until a recipient satisfies its repayment obligation under this subdivision, whichever occurs first. Before a grantor signs a business subsidy agreement, the grantor must check with the compilation and summary report required by this section to determine if the recipient is eligible to receive a business subsidy. Subd. 7. Reports by recipients to grantors. (a) A business subsidy grantor must monitor the progress by the recipient in achieving agreement goals. (b) A recipient must provide information regarding goals and results for two years after the benefit date or until the goals are met, whichever is later. If the goals are not met, the recipient must continue to provide information on the subsidy until the subsidy is repaid. The information must be filed on forms developed by the commissioner in cooperation with representatives of local government. Copies of the completed forms must be sent to the commissioner and the local government agency that provided the business subsidy. The report must include: (1) the type, public purpose, and amount of subsidies and type of district, if the subsidy is tax increment financing; (2) the hourly wage of each job created with separate bands of wages; (3) the sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages; (4) the date the job and wage goals will be reached; (5) a statement of goals identified in the subsidy agreement and an update on achievement of those goals; (6) the location of the recipient prior to receiving the business subsidy; (7) why the recipient did not complete the project outlined in the subsidy agreement at their previous location, if the recipient was previously located at another site in Minnesota; (8) the name and address of the parent corporation of the recipient, if any; (9) a list of all financial assistance by all grantors for the project; and (10) other information the commissioner may request. A report must be filed no later than March 1 of each year for the previous year and within 30 days after the deadline for meeting the job and wage goals. (c) Financial assistance that is excluded from the definition of "business subsidy" by section 116J.993, http://www.revisor.leg.state.mn.us/stats/116J/994.html 1/10/2000 Minnesota Statutes 1999, 116J.994 subdivision 3, clauses (4), (5), (8), and (16) is subject to the reporting requirements of this subdivision, except that the report of the recipient must include: (1) the type, public purpose, and amount of the financial assistance, and type of district if the subsidy is tax increment financing; (2) progress towards meeting goals stated in the subsidy agreement and the public purpose of the assistance; (3) the hourly wage of each job created with separate bands of wages; (4) the sum of the hourly wages and cost of health insurance provided by the employer with separate bands of wages; (5) the location of the recipient prior to receiving the assistance; and (6) other information the grantor requests. (d) If the recipient does not submit its report, the local government agency must mail the recipient a warning within one week of the required filing date. If, after 14 days of the postmarked date of the warning, the recipient fails to provide a report, the recipient must pay to the grantor a penalty of $100 for each subsequent day until the report is filed. The maximum penalty shall not exceed $1,000. Subd. 8. Reports by grantors. (a) Local government agencies of a local government with a population of more than 2,500 and state government agencies, regardless of whether or not they have awarded any business subsidies, must file a report by April 1 of each year with the commissioner. Local government agencies of a local government with a population of 2,500 or less are exempt from filing this report if they have not awarded a business subsidy in the past five years. The local government agency must include a list of recipients that did not complete the report and of recipients that have not met their job and wage goals within two years and the steps being taken to bring them into compliance or to recoup the subsidy. If the commissioner has not received the report by April 1 from an entity required to report, the commissioner shall issue a warning to the government agency. If the commissioner has still not received the report by June 1 of that same year from an entity required to report, then that government agency may not award any business subsidies until the report has been filed. (b) The commissioner of trade and economic development must provide information on reporting requirements to state and local government agencies. Subd. 9. Compilation and summary report. The department of trade and economic development must publish a compilation and summary of the results of the reports for the previous calendar year by July 1 of each year. The reports of the government agencies to the department and the compilation and summary report of the department must be made available to http://www.revisor.leg.state.mn.us/stats/116J/994.html n ~--_._._-_. ill Page 4 of5 1/10/2000 Minnesota Statutes 1999, 116J.994 the public. The commissioner must coordinate the production of reports so that useful comparisons across time periods and across grantors can be made. The commissioner may add other information to the report as the commissioner deems necessary to evaluate business subsidies. Among the information in the summary and compilation report, the commissioner must include: (1) total amount of subsidies awarded in each development region of the state; {2} distribution of business subsidy amounts by size of the business subsidy; {3} distribution of business subsidy amounts by time category, such as monthly or quarterly; {4} distribution of subsidies by type and by public purpose; (S) percent of all business subsidies that reached their goals; {6} percent of business subsidies that did not reach their goals by two years from the benefit date; {7} total dollar amount of business subsidies that did not meet their goals after two years from the benefit date; {8} percent of subsidies that did not meet their goals and that did not receive repayment; {9} list of recipients that have failed to meet the terms of a subsidy agreement in the past five years and have not satisfied their repayment obligations; (10) number of part-time and full-time jobs within separate bands of wages; and (11) benefits paid within separate bands of wages. HIST: 1999 c 243 art 12 s 2 Copyright 1999 by the Office of Revisor of Statutes, State of Minnesota. http://www.revisor.leg.state.mn.us/stats/ 116J/994.html Page 5 of5 1/10/2000 Minnesota Statutes 1999, 1161.995 Minnesota Statutes 1999. Table of Chapters Table of contents for Chapter 116J 116J.995 Economic grants. An appropriation rider in an appropriation to the department of trade and economic deveiopment that specifies that the appropriation be granted to a particular business or class of businesses must contain a statement of the expected benefits associated with the grant. At a minimum, the statement must include goal~ for the number of jobs created, wages paid, and the tax revenue increases due to the grant. HIST: 1999 c 243 art 12 s 3 copyright 1999 by the Office of Revisor of Statutes, State of Minnesota. http://www.revisor.leg.state.mn.us/stats/116J/995 .html I I r Page 1 of 1 1/10/2000 11/10/1999 WED 14:20 FAX 6124968180 SCOT!' CO. ADMIN. 4.1 002 Economic Development Incentives Policy Introduction This Policy is adopted for purposes ofthe business subsidies act (the "Act"), which is Minnesota Statutes, Sections 1161.993 through 116J.995. Terms used in this Policy are intended to have the same meanings as used in the Act. A business subsidy, as defined in Minn. Stat. 1161.993(3), is herein referred to as an economic development incentive. This Policy shall apply only with respect to incentives granted under the Act if and to the e~tent required thereby. The essence of this policy is to provide the legal and statutory framework for the County Board to utilize economic development incentives pursuant to requirements in law, The adoption of this policy is a prerequisite to determining Lhe level of and extent of any Scott County participation in economic development incentives programs. Economic development incentives seek to realize goals that benefit the community, such as the c..-cation or retention of good paying jobs. Economic development projects may also achieve other worthwhile goals. For instance, some projects provide value to the community in the fonns of infrastructure improvements, stabilization of business district~ or neighborhoods, or concentration of selected industries. While job creation and retention goals will be required for any economic development project seeking incentives pursuant to this Policy, the County can require that a project seek to achieve additional goals. Scott County provides economic development incentives in order to create a diverse and sustainable economic base. A diverse economic base by the development and attraction of businesses complementary to existing industries. A sustainable economic base is achieved in part through the creation of quality, higher paying jobs. A diverse and sustainable economy offers opportunity for improved quality of life for the residents of Scott County. The goals that economic development projects must pursue to receive incentives under this policy may include one or more ofthe following: · job creation/retention, · living wages, · job training, · public infrastructure investment. · stable communities, and · redevelopment and/or blight. Specific goal targets for individual projects will be determined and agreed to between the County and the requestor prior to approval of the eCbnomic development incentives by the County Board. 11{10/1999 WED 14:21 FAX 6124968180 SCOT!' CO. ADMIN. ~003 Policies and Procedures 1. The applicant will complete the County's Economic Development Incentives application form (Exhibit 1) and submit a minimum deposit in the amount of $2,500 to cover County administrative costs. The deposit wilJ be refunded upon execution of a contract for private development. If the project is executed with the support of the Municipality or Township, the Municipality or Township will submit a letter of intent to the County. 2. The requestor and the County will draft an economic development incentive agreement for consideration by the County Board. The incentive agreement will specity the terms and conditions of the agreement. The ultimate amount of the incentive may not be equivalent to the maximum amount aUowable by this Policy. 3. The County Board will consider approval for an economic development incentive project only if the Municipality or Township has also approved a similar economic incentive instrument. The County Board will consider approval of the economic incentive for the project only after the Municipality or Township has given approval for similar incentives for the project. The Municipality or Township and the County will detennine the share of the economic incentive bome by both jurisdictions. 4. The agreement will include target goals that coincide to the economic development goals identified in this policy. The recipient will report on the progress in achieving agreement goals as prescribed by the business subsidies act. Determination of Goal Targets With respect to incentives, the following principles and criteria shall guide the determination of goal targets: . Each project shall be evaluated on a case by case basis, recogruzmg its importance and benefit to the community from all perspectives, including created or retained employment positions, infrastmcture improvements, stabilization of communities, and industry type. . ]f a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job or wage goals, as may be permitted by applicable law. . In cases where the objective is the retention of existing jobs, the recipient of the subsidy shall be required to provide reasonably demonstrable evidence that the loss of those jobs is imminent. 2 I I "1--- 11/10/1999 WED 14:21 FAX 6124968180 SCOT!' CO. ADMIN. 141094 · The County will not provide economic incentives for the relocation of jobs within the County unless there are compelling economic reasons indicating that the failure to relocate will lead to economic hardship to the area. Compelling economic reasons may include the potential loss of jobs and tax base to the area. This and any other evidence must be documented. · The setting of wage and job goals mu~"t be sensitive to prevailing wage rates, local economic conditions) external economic forces over which neither the County or the recipient of the subsidy has control, the individual financial resources of the recipient and the competitive environment in which the recipient's business exists. Fiscal Limitations · Total County contribution will be limited; the proposed project in addition to prior financial commitments made pursuant to this Policy or previous econnrnic development policies is not to ex.ceed five percent (5%) of the County's annual net spread levy at time of application. The net spread levy is the property tax levy less HACA and Fiscal Dlsparities. · If the incentive is a tax abatement, the abatemenL will be on the taxes collected on the value of the improvements (buildings) to the property; taxes collected on the value of the land will not be abated. The County reserves the right to cap the dollars of the value to be abated. Because it is not possible to anticipate every type of project which may in its context and time present desirable community building or preservation goals and objectives, Scott County retains the right pursuant to statute in its sole discretion to approve projects and subsidies which may vary from the principles and criteria of the Policy. Adopted by: Scott County Board of Commissioners Date of adoption: October 12, 1999 Date of public hearing: October 5, 1999 3