By DOTTY NIST
Criteria and a process for reviewing applications from companies for tax exemptions have been approved by the Walton County Board of County Commissioners (BCC).
The approval was granted at the Nov. 25 BCC regular meeting at the Walton County Courthouse.
Walton County Administrator Larry Jones made recommendations for the process as a result of being so directed by the county commissioners on Nov. 12. At that time, a number of citizens had raised objections and/or urged for caution in connection with businesses’ requests for tax exemptions.
Two requests for tax exemptions on the agenda at the Nov. 12 BCC meeting had prompted the public input. One request was from Empire Truck Sales, a business that had brought property at the Mossy Head Industrial Park in order to locate a facility there. The other was for a renewal of a tax exemption previously granted to Professional Products, a DeFuniak Springs medical equipment company that had expanded its operation.
In the 2012 General Election, voters had approved a referendum establishing authority for the BCC to grant ad valorem tax exemptions for economic development. The approval provided for the county commission to furnish, based on Florida Statutes, ad valorem tax exemptions to new businesses and businesses which are expanding, at the BCC’s discretion.
Jones told the commissioners that, per the statutes, there a number of ways a new or expanding business may qualify for an exemption. Of particular note, he said, is that a business located within an enterprise zone automatically qualifies for consideration. An enterprise zone is a geographic area targeted for economic revitalization through a state program. There are three enterprise zones in Walton County located in Mossy Head, DeFuniak Springs, and Freeport.
Jones recommended that, when receiving an application for an ad valorem tax exemption, the BCC first consider whether the business is located in an enterprise zone. If so, it should be determined whether the municipality within which the business is located has taken action granting an exemption of city ad valorem taxes, he advised.
Another question to be answered, Jones noted, is whether the business qualifies for the ad valorem tax exemption based on the statutes. He also advised that the Walton County Finance Department be tasked with performing an economic impact analysis for applications. Such an analysis would show the net increase to the local economy that would be provided by the business.
Also to be performed as part of the review process would be a level of eligibility analysis, taking into account the capital investment required and the annual amount of new wages to be provided.
As presented by Jones, the level of eligibility associated with investment would range from 10 percent for an investment of less than $1 million to 50 percent for an investment of more than $4 million.
Level of eligibility associated with total wages of new jobs created would range from 10 percent for less than $100,000 worth of wages for new jobs created to 50 percent for more than $400,000 worth of wages for new jobs created.
A two-tiered process was set out for determining the amount of tax exemption a new or expanding business would qualify for, with, for tier 1, the percent of exemption based arrived at by adding the percentages assigned for investment and amount of wages for new jobs created.
For tier 2, the annual economic contribution calculated for the business would be multiplied by 2.5 percent to arrive at the total eligible exemption dollars.
Using the two-tiered approach, the maximum percentage and maximum total exemption amount that could be granted would be set for the business applying for an exemption.
Jones’ presentation further stated that all exemptions would be by contract between the county and the company receiving the exemption, with approval by majority vote of the BCC required. Per statute, the period for an exemption to remain in place is limited to 10 years.
An annual compliance review would be required in connection with approved exemptions. The review would be based on a comparison of the actual investment and wages for new jobs created with those that had been proposed by the business. For any deviation between the two, an amendment or termination of the agreement by the county would be allowed.
In response to the presentation, District 2 Commissioner Cecilia Jones expressed concern at the length of the 10-year term for the exemptions. “10 years scares me,” she said.
District 4 Commissioner Sara Comander responded that 10 years is the maximum that an exemption can continue and that the BCC can opt to grant an exemption for a shorter time period.
Comander complimented Jones on the job that he and staff had done in creating the proposed process and criteria for exemptions. She moved for approval of the process and criteria and for moving forward with reviewing of existing application on that basis.
South Walton County resident Bill Fletcher told the commissioners that he “applauded” the criteria set forth by Jones. Fletcher encouraged the commissioners to actively seek input from citizens in future decisions on proposed tax exemptions.
Discussion revealed that since the Nov. 12 BCC meeting another company, Triangle Chevrolet/Buick in DeFuniak Springs, had applied for a tax exemption. The company recently opened a new facility on U.S. 331 south.
Walton County Attorney Mark Davis commented that he expected to bring the first two applications before the BCC for consideration at their Dec. 9 regular meeting, He did not expect review of the Triangle application to be completed in time for consideration at that meeting.
Davis said the latter application was under review by the Walton County Property Appraiser and that it would next proceed to the city of DeFuniak Springs for processing.
Comander’s motion was approved with aye votes of the four commissioners present at the Nov. 25 meeting.
