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POLICY FOR INSERTION INTO THE POLICY MANUAL <br />MEETING DATE: May 29, 1997 NUMBER: P0295 <br />EFFECTIVE DATE: May 29, 1997 REVISIONS: <br />POLICY: <br />PAYMENT IN LIEU OF TAXES -COUNTY OWNED PROPERTY <br />County owned real property (land and buildings) is exempt from ad valorem property <br />taxes as provided in Article V, Section 2 (3) of the North Carolina Constitution and North <br />Carolina General Statutes b 105-278.1. From time to time Orange County owned real <br />property is leased to persons using the property for private purposes not related to County <br />programs or services. Typically these tenants are using the property as part of the for- <br />profit business activities of the tenant. This policy confirms and ratifies the previous <br />unwritten policy of Orange County to charge such tenants payments in lieu of taxes in <br />amounts equivalent to the amount of property tax that would otherwise be lawfully <br />assessed against the leased premises where they are taxable by the county and by any <br />municipality in which the leased premises are located. Requiring these tenants to make <br />payments in lieu of taxes serves two important purposes. One, it eliminates the <br />competitive advantage accruing to a tenant of County owned real property that could <br />result from a rental agreement not requiring tenant contribution of property taxes. Two, it <br />provides the County and any municipality wherein the leased premises are located with <br />money equivalent to taxes as a contribution to the cost of public services provided by the <br />County and any municipality wherein the premises are located which public services <br />benefit the tenant of County owned space in the same way that they benefit a tenant of <br />privately owned leased space. <br />• <br />