The URL can be used to link to this page

Home My WebLink AboutCOUNCIL - AGENDA ITEM - 03/20/2007 - SECOND READING OF ORDINANCE NO. 040, 2007, AMENDIN ITEM NUMBER: 10 AGENDA ITEM SUMMARY DATE: March 20, 2007 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest SUBJECT Second Reading of Ordinance No. 040, 2007, Amending Chapter 25 of the City Code to Create a Manufacturing Equipment Use Tax Rebate. RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. EXECUTIVE SUMMARY The Manufacturing Equipment Use Tax Rebate Program is an important economic incentive for retaining and supporting local manufacturers. Manufacturing concerns are a very important element of the City's tax base. They also serve as a primary engine for both job creation and commercial investment in the community. This Ordinance,unanimously adopted on First Reading on March 6, 2007,adds the Program to the City Code to ensure that the Program provides an important economic incentive on an ongoing basis. ATTACHMENTS 1. Copy of the First Reading Agenda Item Summary- March 6, 2007. ATTACHMENT 1 ITEM NUMBER: 14 AGENDA ITEM SUMMARY DATE: March 6, 2007 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest SUBJECT uur T First Reading of Ordinance No. 040, 2007, Amending Chapter 25 of the City Code to Create a Manufacturing Equipment Use Tax Rebate. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. EXECUTIVE SUMMARY The Manufacturing Equipment ax Pr i i ortant economic incentive for retaining and supporting local ufactu S. c g ms are a very important element of the City's tax base. They a o serve a pri engine fo oth job creation and commercial investment in the community. din ds a Progr to the City Code to ensure that the Program provides an important economic incentive on an ongoing basis. BACKGROUND The Manufacturers Use Tax Rebate Program was initiated in 1996, and was intended to focus on encouraging the reinvestment made by local manufacturing firms in new manufacturing equipment. The goal of the Program was to maintain the local economic base by providing modest tax relief to manufacturing concerns located in Fort Collins. This type of investment used to be made every three or four years. The standard today is that the reinvestment in equipment occurs every twelve to eighteen months. Each year, by ordinance, Council approves the City's Rebate Program. Historically, the Program has been funded by the Use Tax Of'y e over Reserve represents use tax collections over and above a"ceiltortof General Fund operations. The Program has provided reb s torec years 1996 through 2001,2003 and 2004. The Rebate Progr ecalear 2002 because of economic conditions. March 6, 2007 -2- Item No. 14 During the 2007 Exception Process, $250,000 was appropriated to fund the Manufacturers Use Tax Rebate Program. Any funds not used for the 2007 Program will be carried forward and reappropriated for the 2008 Program. The Program serves as one ofCon oo vaPnyincal'manufacturers. o assist manufacturers within the City as well as provide anc centi Modifications were last made to the Program in 2006 to reflect several requests made by the manufacturing community. ATTACHMENTS 1. Manufacturing Use Tax Equipment Rebate Program History. ORDINANCE NO. 040, 2007 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 25 OF THE CODE OF THE CITY OF FORT COLLINS TO CREATE A MANUFACTURING EQUIPMENT USE TAX REBATE WHEREAS, the Manufacturing Equipment Use Tax Rebate Program(the"Program") was initiated in 1996, and was intended to focus on encouraging the reinvestment made by local manufacturing firms in new manufacturing equipment; and WHEREAS,the Program has provided rebates to manufacturers for every calendar year since 1996 except for 2002 when it was discontinued due to economic conditions; and WHEREAS,modifications were made to the Program in 2006 to reflect several requests from the manufacturing community; and WHEREAS, the Finance Committee recommended adding the Program to the Code of the City of Fort Collins (the "Code") to ensure that the Program provides an important economic incentive on an ongoing basis; and WHEREAS, historically, the Program has been funded by the Use Tax Carryover Reserve which represents use tax collections over and above the "ceiling" budgeted for use in support of General Fund operations; and WHEREAS,the City Council believes that the Program is a beneficial incentive program and should be established for that purpose. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Chapter 25, Article I1 of the Code of the City of Fort Collins is hereby amended by the addition of a new Division 5 which reads in its entirety as follows: DIVISION 5. MANUFACTURING EQUIPMENT USE TAX REBATE Sec. 25-71. Definitions. The following words, terms and phrases, when used in this Division, shall have the meanings ascribed to them in this Section: Qualifying manufacturer shall mean an industrial manufacturer who, in an industrial setting, produces a new product, article, substance or commodity that is different from and has a distinctive name, character or use from the raw or prepared materials used to manufacture the product. Manufacturing equipment shall mean manufacturing equipment to be used in the City directly and exclusively in the manufacture of tangible personal property for sale or profit. Sec. 25-72. Establishment. There is hereby established a manufacturing use tax rebate program to provide relief from use taxes imposed upon a qualifying manufacturer. Sec. 25-73. Application for rebate. Application for the manufacturing equipment use tax rebate on qualifying manufacturing equipment shall be made on forms to be provided by the City.In order to qualify for such rebate, the application must be filed between August 1 and December 31, inclusive, of each year for which a rebate is requested. Only one (1) application shall be filed per qualifying manufacturer. Sec. 25-74. Qualifications. In order to qualify fora rebate under the provisions of this Division,the following requirements must be met: (a) The qualifying manufacturer must be licensed with the City and classified as a"manufacturer" under the Standard Industrial Code. (b) The qualifying manufacturer must certify compliance with all federal, state and local laws and regulations applicable to a manufacturing facility located within the City limits. (c) The qualifying manufacturer must be current in all payments to the City and in compliance with any contractual agreements with the City. (d) Machinery and equipment must be tangible personal property when purchased; be necessary for, and used directly in, the manufacturing of tangible personal property to be sold; not be used in any activity other than the actual manufacturing process; not be merely useful or incidental to the manufacturing operation; and be purchased in the year the rebate is being applied for. (e) The qualifying manufacturer must have paid the appropriate use tax. -2- See. 25-75. Amount of rebate. The amount of rebate payable shall be in the sum set forth in a rebate schedule to be adopted by the City's Finance Department consistent with rules and regulations promulgated pursuant to § 25-77. See. 25-76. Payment. The City shall make all rebate payments to each qualifying manufacturer by a single check. See. 25-77. Administration. The Financial Officer shall administer the program established by this Division and may prepare a rebate application form, adopt rules and regulations consistent with the provisions of this Division, and audit and verify the applications submitted pursuant to this Division. Any rebate application form shall require the claimant to verify and sign the application under oath. The burden of proving entitlement to a rebate under this Division is on the claimant. The Financial Officer may require reasonable information to support the rebate application. Sees. 25-78—25-85. Reserved. Introduced and considered favorably on first reading, and ordered published this 6th day of March, A.D. 2007, and to be presented for final passage on t 0th day of March, A.D. 2007. 01 Mayor i PEST: City Clerk Passed and adopted on final reading this 20th day of March, A.D. 2007. Mayor ATTEST: City Clerk -3-