1. Proposed Property Tax Exemption Presentation to the Orange County Board of County Commissioners December 6, 2011

2. Overview Background Eligible Businesses Application Process Questions Proposed Property Tax Exemption

3. Fla. Constitution authorizes economic development property tax exemption for new businesses and expansions of existing businesses by ordinance after voter approval Enabling legislation, Section 196.1995 Florida Statutes, amended in 2011 to expand eligibility of businesses and emphasize creation of new jobs paying above average wage Proposed Property Tax Exemption BACKGROUND

4. September 20, 2011, Board passed Resolution calling referendum during Presidential Preference Primary asking voter approval to grant these exemptions Primary is Jan. 31, 2012 Early voting begins Jan. 21, 2012 Proposed Property Tax Exemption BACKGROUND (Contd)

5. Brevard Osceola Hillsborough Dade Palm Beach Martin Escambia Charlotte

6. If voters approve exemption : BCC may grant tax exemptions to eligible businesses for buildings and tangible personal property going on tax rolls for first time Cannot include value of land May last for 10 years or Board may approve less May include 100% of assessed value of buildings and tangible personal property or less Exemptions can be revoked if jobs not created as represented Proposed Property Tax Exemption ELIGIBLE BUSINESSES

7. New: Business or organization creating 10 or more new full-time jobs with average wages higher than area average that: Manufactures, processes, compounds, fabricates or produces for sale items of tangible personal property at a fixed location; or Is a target industry business as defined in Section 288.106(2)(q) Florida Statutes; or Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

8. Target Industry Businesses are corporate headquarters or business engaged in target industries identified by the state expected to have future growth, stability, high wages, diversification and positive economic impact. 2011 Target Industries are: CleanTech, Life Sciences, Information Technology, Aviation/ Aerospace, Homeland Security/Defense, Financial/Professional Services, Emerging Technologies including global logistics. Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

9. Creating 25 or more new full-time jobs with more than 50% sales outside of Florida; or Office space established by a newly domiciled business housing 50 or more full-time employees separate from any other operation; or Any business in Enterprise zone or Brownfield area that first begins operation on site separate from other commercial or industrial operation owned by the same business Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

10. Expansion of Existing Business: Creating 10 or more new full-time jobs with higher wages than area average which : Manufactures, processes, compounds, fabricates or produces for sale items of tangible personal property at a fixed location; or Target industry business as defined in Section 288.106(2)(q) Florida Statutes; or Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

11. Expansion of Existing Business: contd Creating 25 or more new full time jobs with more than 50% sales outside of Fla. increasing operations in the County resulting in a net increase in employment or productive output or sales of at least 10%; or located in Enterprise Zone or Brownfield area that increases operations on a site located within the same zone or area co-located with a commercial or industrial operation owned by the same business Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

12. If voters approve, BCC must adopt a separate ordinance for each authorizing economic development tax exemption granted to a qualified businesses Proposed Property Tax Exemption APPLICATION PROCESS

13. Step 1Step 2Step 3Step 4Step 5Step 6Step 7 Must be filed a minimum of 60 days prior to obtaining certificate of occupancy or the installation of eligible equipment By January 15th each year Pre-application submittal meeting with Orange County Office of Economic, Trade & Tourism Development (OCOETTD) Application is submitted to OCOETTD. The Economic Development Administrator (EDA) determines if the company meets the basic criteria for Tax Abatement Property Appraiser conducts analysis and determines if company is eligible EDA places ordinance on Orange County BCC agenda. OC BCC conducts public hearing to consider ordinance OC BCC conducts public hearing and conducts second reading on ordinance Company files annual report with EDA each year they are to receive the exemption EDA forwards application to Property appraiser and requests a report Property Appraiser completes report and returns to EDA Clerk (?) places public hearing legal notice in local newspaper for second reading of ordinance EDA sends final ordinance to Property Appraiser EDA determines eligibility of company and presents a report to the OC BCC and the Property Appraiser EDA sends out letter of inquiry to environmental agencies if existing location could be deemed as hazardous Economic Impact Analysis complete (EDC?) Request Economic Impact Analysis (EDC?) Proposed Property Tax Exemption APPLICATION PROCESS (contd)

14. Statutory Requirements for consideration: Net number of new jobs Average wage of new jobs Capital investment to be made by applicant Type of business – target industry? Environmental impact Extent applicant intends to source supplies & materials within county Economic related characteristics deemed necessary by county Proposed Property Tax Exemption APPLICATION PROCESS (Contd)

15. Proposed Property Tax Exemption APPLICATION PROCESS (contd) QTITax Abatement Program AdministrationStateLocal Incentive AwardPer Job Percentage of Taxes paid Wage Requirements115%Determined by OC BCC Eligible CompaniesTargeted Industry OnlyExpands beyond QTI Capital InvestmentNot IncentivizedIncentivized Eligible TaxesNumerous Real & Personal Property

16. Proposed Property Tax Exemption APPLICATION PROCESS (contd) Past County Incentivized Projects (12 Years) Total Projects:41 Average Jobs:202 Average Salary:$57,164 Average Capital Investment: $36,751,444

17. Proposed Property Tax Exemption APPLICATION PROCESS (contd) HYPOTHETICAL APPLICATION: Company: USim Bio: Located in Simi Valley, CA, USim is a global is a global industry leader in security and strategic defense simulation development and training. Clients include the U.S. Department of Defense, Department of Homeland Security, and Fortune 500 companies. USim seeks to consolidate all development and training in one Central Florida location on a 15 to 25 acre campus and expand its employment to 228. The new USim campus will include buildings for Administration, Sales, Marketing, Research and Development, Application Development and a state of the art simulation training facility. Jobs: 228 Average Wage: $76,500 Capital Investment: $82M Real Property Improvements $38M Tangible Personal Property $120M

18. Proposed Property Tax Exemption APPLICATION PROCESS (contd) HYPOTHETICAL APPLICATION: (contd) PROPERTY APPRAISERs OFFICE : Primary Responsibility Provide Estimate of Value Provide Tax Impact

19. PROPERTY APPRAISERS REPORT The total revenue available to the county for current fiscal year from ad valorem taxes. Revenue lost to the county for current fiscal year by virtue of previously granted exemptions. The value of the real property improvements to be built and the tangible personal property to be purchased. Estimate of revenue which would be lost to county for current fiscal year if exemption applied for were granted if property were subject to tax. Determination as to whether property is a new business or the expansion of an existing business. Proposed Property Tax Exemption APPLICATION PROCESS (contd)

20. PROPERTY APPRAISERS REPORT The Property Appraisers estimate is only as good as the information provided. The Property Appraiser may request additional information such as: Reasonably detailed cost estimates of the improvements to be constructed and the tangible personal property to be acquired. The Property Appraisers report may include additional information relied upon and deemed necessary to reaching its determination. Proposed Property Tax Exemption APPLICATION PROCESS (contd)

21. The Property Appraiser will carefully review and consider the information provided. Consideration may be given to: Current construction costs, size, materials, etc... Original cost and present worth of TPP. Taxable vs. Non-taxable TPP. Current TPP exemptions. Any non-realty items. Proposed Property Tax Exemption APPLICATION PROCESS (contd)

22. Example of Property Appraiser Considerations for TPP Proposed Property Tax Exemption APPLICATION PROCESS (contd)

23. SAMPLE DR-418

24. Proposed Property Tax Exemption APPLICATION PROCESS (contd) SAMPLE DR-418

25. Proposed Property Tax Exemption APPLICATION PROCESS (contd) Timeline 2/01/12 – Pre-submittal Meeting 2/14/12 – Application Finalized 3/13/12 – BCC Public Hearing 6/01/13 – Construction Completed 1/01/14 – Property added to Tax Roll/Exemption Applied

26. Proposed Property Tax Exemption Next Steps Voting Early Voting January 21, 2012 General Election January 31, 2012

27. Proposed Property Tax Exemption QUESTIONS?

28. Proposed Property Tax Exemption Presentation to the Orange County Board of County Commissioners December 6, 2011

30. ORANGE COUNTY ENTERPRISE ZONES Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)

31. ORANGE COUNTY BROWNFIELD AREAS Proposed Property Tax Exemption ELIGIBLE BUSINESSES (Contd)