2016-09ORDINANCE NO. 2016-09
AN ORDINANCE AMENDING CHAPTER 14 OF THE CODE OF THE CITY OF
FAIRFAX, VIRGINIA, BY ADDING THERETO A NEW ARTICLE IX, ENTITLED
TECHNOLOGY ZONE
BE IT ORDAINED by the City Council of the City of Fairfax, Virginia that Chapter
14 of the Code of the City of Fairfax, is amended by adding thereto a new Article IX to
provide in its entirety as follows:
ARTICLE IX — TECHNOLOGY ZONE
Sec. 14-419. Purpose of Technology Zone.
The City of Fairfax (or the "City") has determined that the development of its
commercial tax base requires incentives, and further determines that an appropriate method
of offering incentives for the City is to create a Technology Zone (as guided and authorized
by the Code of Virginia § 58.1-3850). The City believes that the establishment of a
Technology Zone will improve the economic conditions within the City which would benefit
the welfare of the citizens.
This creation of a Technology Zone does not affect any other existing requirements
for businesses, such as zoning regulations.
Sec. 14-420. Definitions.
For the purpose of this article the following words and phrases shall have the
meanings given below, unless clearly indicated to the contrary:
Administrator means the City Manager or his or her designee.
Performance Agreement means the City's standard agreement form, to which shall be
attached a business's proposed plan of development and/or business plan.
Qualified Technology Business means a business which derives a reasonable
accounting of its income from the design, development, manufacture or other creation, for
lease, sale or license of technology based products, processes or related services. Technology
based products, processes or related services are defined as engaging in the activity of
automation, biotechnology, biomedical research, electronics, computer hardware, computer
software, defense, energy, environmental, manufacturing equipment, advanced materials,
medical applications, pharmaceuticals, photonics, electronic based subassemblies and
components, testing and measurements, telecommunications, systems, integration,
multimedia, e-commerce, internet services, transportation, architecture and engineering or
similar activities. Any business providing incubation or co -location services to startup or new
businesses may qualify as a Qualified Technology Business if a reasonably substantial
component of its business plan involves providing for a physical location of at least four
businesses within a single location, and that business facilitates access to technology services
for its client businesses or members. An electronic equipment facility that is primarily
occupied, or intended to be occupied, by electronic and computer equipment that provides
electronic data switching, transmission, or telecommunication functions between computers,
both inside and outside the facility shall not qualify as a technology business. The use of
computers, telecommunication services, or a web page or internet site shall not, in itself, be
sufficient to qualify as a Qualified Technology Business. Receivers, principals or prime
contractors of identifiable federal appropriations for research and development defined in
Federal Acquisition Regulations, in the areas of computer and electronic systems, computer
software, applied sciences, economic, social and physical sciences shall meet the definition of
a Qualified Technology Business. A business operating under a certificate of public
convenience issued by the Virginia Stats Corporation Commission, or engaged in the
provision of a "utility service" as defined by City Code will not qualify.
Targeted Industry means a type of business or manufacturing that is identified as a
targeted industry in the City's most recent economic development strategic plan, or
established as a priority by the City Manager, Council, or Director of Economic
Development.
Sec. 14-421. Administration.
The Administrator, in consultation with the Commissioner of The Revenue shall
determine and publish the procedures for obtaining the benefits created by this article and for
the administration of this article.
The Administrator shall be the single point -of -contact for qualified business owners to
take advantage of the Technology Zone incentive described in this article, and shall provide
recommendations as necessary to streamline the processes for a business to qualify and obtain
the incentive.
Sec. 14-422. Boundaries.
The Technology Zone boundaries shall at all times be the same as the municipal
boundaries of the City of Fairfax.
Sec. 14-423. Eligibility Requirements.
(a) Economic incentives and regulatory flexibility may be made available to any
new or expanded business listed by the City as a targeted industry and/or that
advances the City's strategic goals identified in the most recently adopted
economic development strategic plan and/or the City's comprehensive plan; and
(b) New businesses must enter into to a Performance Agreement with the City based
upon a minimum investment, jobs, sales revenues, or other significant criteria, as
determined by the Administrator. The Qualified Technology Business must make
a minimum investment and/or create and sustain a minimum number of full-time
or equivalent jobs over a period of years outlined in the Performance Agreement in
order to be eligible for economic incentives or regulatory flexibility; or
(c) Existing businesses must commit to a Performance Agreement based upon a
minimum expansion that may include jobs, a physical expansion or other
significant criteria to be eligible for economic incentives or regulatory flexibility.
(d) Business relocating from outside the City to a location within the City may qualify
under paragraph (b) of this section.
Sec. 14-424. Taxes Eligible for Exemption.
Qualified Technology Businesses shall be exempt from the business, professional and
occupational license taxes and fees (collectively, `BPOL") imposed by the City that would
otherwise be imposed on income derived from the research, development, manufacturer or
rendering of advanced technological products or services. The amount and schedule of
exemption shall be provided for in Section 14-425 of this Article, and may from time to time
be amended in order to sustain the economic development priorities established by the City.
Sec. 14-425. Amount and Schedule of Exemption.
Qualified Technology Businesses shall be exempt for up to five consecutive calendar
years from the BPOL taxes according to the schedule below. Year one is the calendar year
in which the business becomes a Qualified Technology Business if it is qualified prior to
June 30 of the first year. Otherwise, year one shall be the calendar year following the year in
which the business becomes a Qualified Technology Business.
The schedule for exemption shall include: 100% exemption in year one (1); 80%
exemption in year two (2); 60% exemption in year three (3); 40% exemption in year four (4);
20% exemption in year five (5); and no exemption for any year after the conclusion of the
initial five year period.
Sec. 14-426. Procedure for Tax Exemption as a Qualified Technology Business.
The Administrator shall develop an application form to implement the terms of this
article. No incentive application shall be approved until the Commissioner of The Revenue
makes a determination that no other unpaid taxes are outstanding. Once an incentive
application has been approved and the business certified by the Administrator as a Qualified
Technology Business, the business and the City shall execute a Performance Agreement
and the business shall thereafter be entitled to the exemptions created by this article.
Sec. 14-427. Compliance.
(a) Failure of the Qualified Technology Business to pay in full by the due date any
taxes imposed by the City shall result in the loss of the exemption for the
remainder of the then current year upon a finding by the Administrator that such
delinquency is significant. The Administrator shall withdraw Qualified
Technology Business status for any business that is not compliant with any
ordinance, regulation, or other legal requirement pertaining to that business.
(b) Failure of the Qualified Technology Business to meet the minimum criteria
established in Section 14-423 regarding minimum investment and/or minimum
number of jobs shall result in the loss of the exemption for the remainder of the
current year. In that event, the Qualified Technology Business shall repay, within
30 days, to the City of Fairfax the full amount of revenue that would have been
generated through the full tax rate as specified in the Agreement.
(c) If a business ceases to be a Qualified Technology Business during a year in which
rebates or exemptions apply, the tax exemption shall apply only to those months
the business was a qualified business. The Qualified Technology Business shall
establish its qualification for the incentives on an annual basis.
This ordinance shall become effective as provided by law.
INTRODUCED: September 13, 2016
PUBLIC HEARING: September 27, 2016
ADOPTED: September 27, 2016
ATTEST:
-N410
City 6erk
Votes
Councilmember DeMarco
Aye
Councilman Greenfield
Aye
Councilman Meyer
Aye
Councilmember Miller
Aye
Councilmember Schmidt
Aye
Councilmember Stehle
Aye
*4*0r
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