The City of Franklin, Indiana

Tax Abatement Policy & Decision Guidelines

In order to better serve all applicants requesting tax abatement and provide for a consistent format in addressing tax abatement requests, the City of Franklin has established the following guidelines and procedures. These guidelines are meant to be used as both a starting point and standard format for general questions relating to tax abatement requests. These guidelines are not intended to be all inclusive. Based on the merits of ueach individual request, the Economic Development Commission and Common Council may deviate from established policies at their discretion.

Economic Revitalization or Development Target Area Determination:
Before any tax abatement may be granted, the Common Council, upon a recommendation by the Economic Development Commission, must designate the site an economic revitalization area or an economic development target area. In doing so, all of the statutory requirements defining an economic revitalization area or an economic development target area which are outlined in Section 6-1.1-12.1-1 and Section 6-1.1-12.1-7 of the Indiana Code, and all subsequent amendments thereof, must be met. Moreover, said designation shall be based on quantitative, tangible characteristics of the respective site.

As part of the application process, the applicant shall prepare and provide documentation which outlines in very specific terms and illustrations how, in accordance with the definition of an economic revitalization area or an economic development target area, the project qualifies for the designation (if the area is not already designated). This documentation shall, in turn, be reviewed and verified by the economic development staff, with a written report outlining this verification being provided to the Economic Development Commission and Common Council as part of the application process.

Time Period of Designation:
If the respective site qualifies as an economic revitalization area, the time period for said designation shall generally not exceed the length of time of the tax abatement period.

Criteria for Tax Abatement Approvals:
The applicant must submit documentation which outlines in very specific terms why, without a tax abatement being granted, the company cannot expand or locate in Franklin.

Similar to the requirement shown above for an economic revitalization area designation, this documentation supporting the reasons why a tax abatement is needed in order for a company to either expand or locate in Franklin shall also be reviewed and verified by the economic development staff, with a written report outlining this verification being provided to the Economic Development Commission and Common Council as part of the application process.

Specific criteria shall be used when considering tax abatement applications. These criteria shall include the following elements: (1) the diversification of the local occupational mixture, (2) the diversification of the local manufacturing mixture, (3) the creation or retention of jobs with salaries exceeding the local average for similar employment, (4) the reuse or expansion of an existing facility (use of a brownfield site), (5) the potential for future expansion and investment at the subject property or adjacent properties, and (6) conformance with the City of Franklin Comprehensive Plan.

The criteria are to be used as a reference only. Each tax abatement application must be assessed and approved based upon the benefits the company will bring to the City. Decisions concerning the approval of any tax abatement period shall be based upon the benefits the company will bring to the City.

Requests for tax abatement are not required to address all of these criteria. generally certain criteria may be combined into scenarios which could merit a tax abatement. For example, a new company locating in Franklin may qualify for tax abatement by satisfying criteria 2, 3, and 6. Also, an existing company may qualify for a tax abatement by satisfying criteria 3,4,5, and 6.

Criteria 1....Diversification of Local Occupations

The U.S. Bureau of the Census categorizes local residents by their occupation. All workers are divided into (1) managerial and professional specialty, (2) technical, sales, and administrative support, (3) service, (4) farming, forestry, & fishing, (5) precision production, craft, and repair, and (6) operator, fabricator, and laborer occupations. The diversification of local occupations is encouraged. Consideration will be given to the ways in which a tax abatement applicant will diversify local occupational mix. Current Data on the local occupation mix shall be collected by the staff and provided to the Economic Development Commission and City Council for consideration.

Criteria 2....Diversification of Local Manufacturing Employment

The U.S. Bureau of the Census categorizes local workers by the industrial sector (manufacturing, retail sales, construction, etc.) in which they are employed and then further identifies categories within each sector. For example, there are 20 types of manufacturing recognized by the Census Bureau. Consideration will be given to the ways in which a tax abatement applicant will diversity the local manufacturing employment. Current data on the local manufacturing employment shall be collected by the staff and provided to the Economic Development Commission and City Council for consideration.

Criteria 3....Increase in Local Salaries

Consideration will be given to whether or not the tax abatement applicant will exceed the average wages being paid locally for similar types of employment. For example, the wages offered by a proposed manufacturer of transportation equipment will be compared with the current average wages paid by existing local producers of transportation equipment. Current data on the local wages shall be collected by the staff and provided to the Economic Development Commission and City Council for consideration.

Criteria 4....Sustainable Land Use

Consideration will be given to the way in which tax abatement applicants will make use of property and structures within the community. The reuse of brownfield sites - those which include existing structures in need of upgrading or reuse, or those which have been other- wise damaged by previous development is encouraged.

Criteria 5....Future Community Investment

Consideration will be given to the ways in which the tax abatement applicant will facilitate future investment either at a specific site or in a specific portion of the community. For example, (1) an applicant may have long term plans for expansion locally; (2) the development of a specific property with the assistance of tax abatement may lead to improvements in area traffic flow, drainage, or other infrastructure; or (3) the introduction of certain types of business may also result in additional investment in the community by complimentary businesses.

Criteria 6....Conformance with the Comprehensive Plan

Consideration will be given to the ways in which the tax abatement applicant will conform to the land use recommendations and community goals outlined in the City of Franklin Comprehensive Plan.

Speculative Construction

Tax abatement shall be considered for speculative manufacturing, warehousing, and distribution facilities. Real property tax abatement on speculative projects shall be granted for time periods up to 10 years. Applications for personal property tax abatement from the future tenants of the structures will be considered as potential tenants become known.

Applications of an Exceptional Nature:

Should an economic development opportunity occur that is of an exceptional nature, longer periods of abatement on buildings and equipment may be considered. Development examples of an exceptional nature include projects which.....

(1) Create a new plant or product line for an existing manufacturer;

(2) Create substantial employment opportunities with higher than average wages;

(3) Increase substantially property values and the city tax base with minimal impacts to city services (police & fire protection, schools, utilities, infrastructure, etc,).

(4) Utilize existing public infrastructure (sanitary & storm sewer, roads & streets, drainage facilities and other utilities) and minimize impacts to city services.