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12-20-2007 (City Council) Agenda Packet Wylie City Council CITY:F WYLIE NOTICE OF MEETING Special Called Meeting Agenda December 20, 2007 - 6:30 pm Wylie Municipal Complex - Council Chambers/Council Conference Room 2000 Highway 78 North John Mondy Mayor M. G. "Red" Byboth Mayor Pro Tern David Goss Place 1 Kathy Spillyards Place 3 Merrill Young Place 4 Rick White Place 5 Carter Porter Place 6 Mindy Manson City Manager Richard Abernathy City Attorney Carole Ehrlich City Secretary In accordance with Section 551.042 of the Texas Government Code, this agenda has been posted at the Wylie Municipal Complex, distributed to the appropriate news media, and posted on the City website: www.wylietexas.gov within the required time frame. As a courtesy, the entire Agenda Packet has also been posted on the City of Wylie website: www.wvlietexas.gov. The Mayor and City Council request that all cell phones and pagers be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to respond to a page or to conduct a phone conversation. The Wylie Municipal Complex is wheelchair accessible. Sign interpretation or other special assistance for disabled attendees must be requested 48 hours in advance by contacting the City Secretary's Office at 972.442.8100 or TD 972.442.8170. CALL TO ORDER Announce the presence of a Quorum. INVOCATION & PLEDGE OF ALLEGIANCE REGULAR AGENDA Public Hearing 1. Hold a Public Hearing to hear evidence for or against the taxation of certain tangible personal property held temporarily within the City of Wylie, Texas. (S. Satterwhite, WEDC Executive Director) December 20,2007 Wylie City Council Special Called Meeting Agenda Page 2 of 3 Executive Summary In the 2007 session, the Texas Legislature passed HB621 which amends the Texas Tax Code, Section 11.253. The bill is very similar to the Freeport exemption passed many years ago,but has potentially larger impact as time goes on. The City of Wylie has not passed the Freeport exemption and continues to tax goods in transit, which is primarily inventory of companies such as Sanden International, Bayco Products, Carlisle Coatings & Waterproofing, and Extruders division of Atrium Companies, Inc. HB 621 exempts goods, principally inventory, that are stored in a location that is not owned by the owner of the goods and transferred from that location to another location within 175 days. To continue taxing these goods,the City of Wylie must hold a public hearing to determine whether the subject goods become exempt. Failure to act to tax these goods will allow them to become exempt for the 2008 tax year. General Business 2. Consider, and act upon, Ordinance No. 2007-44 to tax tangible personal property which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. (S. Satterwhite, WEDC Executive Director) Executive Summary In 1999,the Wylie Economic Development Corporation(WEDC) chose to recommend to the City Council against approving the Freeport Exemption within the City of Wylie based upon the lack of interest in exempting the existing Freeport value at the time of$31.7 million. Staff is unaware of what the current Freeport valuation is at this time. HB621 amended the Texas Tax Code, Section 11.253 allowing the exemption from taxation inventory goods stored in a location that is not owned by the owner of the goods and are transferred from that location to another location within 175 days. The City Council may act to tax these goods in the year following the year which the Council takes action. To continue to tax these type goods, Council must act in such a manner prior to December 31,2007. EXECUTIVE SESSION Recess into Closed Session in compliance with Section 551.001, et.seq. Texas Government Code, to wit: §§551.087 Deliberations regarding economic development negotiations. To discuss commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay or expand in or near the territory of the governmental body and with which the governing body is conducting economic development negotiations. • Discussion regarding economic negotiations with Direct Development RECONVENE INTO OPEN SESSION Take any action as a result from Executive Session, including but not limited to: 3. Consider, and act upon, the acceptance of a Letter of Intent from Direct Development relating to the proposed retail development on FM 544. (M. Manson, City Manager) December 20,2007 Wylie City Council Special Called Meeting Agenda Page 3 of 3 ADJOURNMENT CERTIFICATION I cent'that this Notice of Meeting was posted on this 17th day of December, 2007 at 5:00 p.m. as required by law in accordance with Section 551.042 of the Texas Government Code and that the appropriate news media was contacted. As a courtesy, this agenda is also posted on the City of Wylie website: www.wylietexas.gov. VA1111111111///�/ oF c•-). 531 al.;116-7 Carole Eh Lich,City Secretary = SEAL E L..;Date Notice Removed • //,��ff11111111\\` Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: 12-20-07 Item Number: 1 Department: WEDC (City Secretary's Use Only) Prepared By: Sam Satterwhite Account Code: Date Prepared: 12-17-07 Budgeted Amount: Exhibits: Subject Hold a public hearing to hear evidence for or against the taxation of certain tangible personal property held temporarily within the City of Wylie, Texas. Recommendation Hold a public hearing; no action required. Discussion In the 2007 session, the Texas Legislature passed HB621 which amends the Texas Tax Code, Section 11.253. The bill is very similar to the Freeport exemption passed many years ago, but has potentially larger impact as time goes on. The City of Wylie has not passed the Freeport exemption and continues to tax goods in transit, which is primarily inventory of companies such as Sanden International, Bayco Products, Carlisle Coatings & Waterproofing, and Extruders division of Atrium Companies, Inc. HB 621 exempts goods, principally inventory, that are stored in a location that is not owned by the owner of the goods and transferred from that location to another location within 175 days. To continue taxing these goods, the City of Wylie must hold a public hearing to determine whether the subject goods become exempt. Failure to act to tax these goods will allow them to become exempt for the 2008 tax year. Approved By Initial Date Department Director SS 12/20/07 City Manager 11\�`�� l a l - /o7 Page 1 of 1 Wylie City Council CITY OF WYLIE AGENDA REPORT Meeting Date: 12-20-07 Item Number: 2 Department: WEDC (City Secretary's Use Only) Prepared By: Sam Satterwhite Account Code: Date Prepared: 12-17-07 Budgeted Amount: Exhibits: 1 Subject Consider, and act upon, Ordinance No. 2007-44 to tax tangible personal property in transit which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. Recommendation Motion to approve Ordinance No. 2007-44 taxing tangible personal property in transit which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. Discussion The City of Wylie currently does not exempt from taxation Freeport goods or "goods in transit" as does Collin County and the Wylie Independent School District. In 1999, the Wylie Economic Development Corporation (WEDC) chose to recommend to the City Council against approving the Freeport Exemption within the City of Wylie based upon the lack of interest in exempting the existing Freeport value at the time of$31.7 million. Staff is unaware of what the current Freeport valuation is at this time. HB621 amended the Texas Tax Code, Section 11.253 allowing the exemption from taxation inventory goods stored in a location that is not owned by the owner of the goods and are transferred from that location to another location within 175 days. At present, this new law might have limited impact because most goods are probably kept in facilities that are owned by the owners of the goods themselves. However, this may change rapidly. In order to take advantage of this new law, owners may seek to transfer ownership of either the goods or the facilities in which the goods are stored, manufactured, processed, etc. to legal entities with a different ownership in order to exempt the property from taxation. The City Council may act to tax these goods in the year following the year which the Council takes action. To continue to tax these goods in transit, Council must act in such a manner prior to December 31, 2007. Failure to act to tax these goods will allow them to be exempt for the 2008 tax year. Should the Wylie City Council choose to exempt these goods from taxation in the future, as with all Freeport goods, it may choose to do so at that time. Approved By Initial Date Department Director SS 12-20-07 City Manager fit V r \ Ick'1'7 ^O Page 1 of 1 ORDINANCE NO. 2007-44 AN ORDINANCE OF THE CITY OF WYLIE, TEXAS, TO TAX TANGIBLE PERSONAL PROPERTY IN TRANSIT WHICH WOULD OTHERWISE BE EXEMPT PURSUANT TO TEXAS TAX CODE, SECTION 11.253 WHEREAS, the 80TH Texas Legislature in Regular Session has enacted House bill 621 to take effect on January 1, 2008, which added Tex. Tax Code §11.253 to exempt from taxation certain tangible personal property held temporarily at a location in this state for assembling, storing, manufacturing, processing or fabricating purposes (goods-in-transit) which property has been subject to taxation in the past; and WHEREAS, Tex. Tax Code §11.253(j) as amended allows the governing body of a taxing unit, after conducting a public hearing, to provide for the continued taxation of such goods-in- transit; and WHEREAS, the City Council of the City of Wylie, Texas, having conducted a public hearing as required by Section 1-n (d), Article VIII, Texas Constitution, is of the opinion that it is in the best interests of the municipality to continue to tax such goods-in-transit; NOW THEREFORE, BE IT ENACTED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: Section 1: That the goods-in-transit, as defined Tex. Tax Code 11.253 (a)(2), as amended by House Bill 621, enacted by the 80th Texas Legislature in Regular Session, shall remain subject to taxation by the City of Wylie, Texas. DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS on this 20th day of December, 2007. John Mondy, Mayor ATTEST: Carole Ehrlich, City Secretary APPROVED AS TO FORM: Abernathy, Roeder, Boyd & Joplin, P.C. Richard Abernathy, City Attorney Ordinance No.2007-44 Allowing Taxation of Certain Tangible Personal Property Item #3 — Attachments Not Available