ORDINANCE NO. 5953

ORDINANCE PROVIDING FOR THE ALLOCATION OF LAWFULLY AVAILABLE FUNDS OF THE CITY, IN AN AMOUNT EQUAL TO A PORTION OF PROPERTY TAX REVENUES COLLECTED BY THE CITY ON CERTAIN ARTIFICIAL INTELLIGENCE PROPERTY, TO CERTAIN PUBLIC PURPOSES WITHIN THOSE AREAS OF THE CITY AFFECTED BY THE DEVELOPMENT, USE AND OPERATION OF SUCH PROPERTY

WHEREAS, certain real and personal property are located in the City of Memphis, Tennessee (the “City”), and are used for, or planned for use for, artificial intelligence infrastructure, including but not limited to supercomputers, facilities and equipment needed to operate supercomputers and other related facilities and equipment (as such real and personal property is further identified and defined herein, the “AI Real Property” and “AI Personal Property,” respectively, and collectively defined herein as the “AI Property”); and

WHEREAS, as a way to address any impacts to those areas of the City located close in proximity to the AI Property (as further described herein, the “Surrounding Area”), the City hereby determines to allocate an amount of lawfully available funds of the City equal to a portion of those property tax revenues collected by the City on the AI Property each year (as further described and defined herein, the “Public Purpose Amount”), to fund certain public purposes benefitting the Surrounding Area; and

WHEREAS, the City Council of the City (the “Council”) hereby determines it is in the best interests of the City to use the Public Purpose Amount to fund those public purposes consisting of public projects and programs in the Surrounding Area and grants or other forms of financial aid to governmental and/or nonprofit organizations serving the City, including the Surrounding Area; and

WHEREAS, pursuant to applicable law, the City may contribute its funds for public projects and programs benefitting its residents; and

WHEREAS, pursuant to Section 824.1 of the Charter of the City, the City is authorized to contribute amounts from its general funds to any charity, charitable institution, or charitable organization, the object of which is to care for the poor and afflicted residents of the City, and the City is further authorized by Section 6-54-111, Tennessee Code Annotated, as amended, to make appropriations to nonprofit organizations to benefit City residents in accordance with the terms of said statute; and

WHEREAS, the Council hereby determines that allocating the Public Purpose Amount to support the Surrounding Area in the manner so described herein is in the best interests of the City and promotes both economic development and the general welfare of residents of the City; and

WHEREAS, for the reasons and purposes hereinabove described, it is the intent of the Council to budget and appropriate annually so much of the Public Purpose Amount as it deems necessary and appropriate to support the Surrounding Area, as the Council may in its discretion approve in an annual operating budget ordinance, and to adopt this Ordinance to provide guidelines for accomplishing the foregoing purposes; and

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Memphis, Tennessee, as follows:

Section 1. Definitions. The following terms shall have the following meanings in this Ordinance unless the text expressly or by necessary implication requires otherwise:

• (a) “Artificial Intelligence Infrastructure” means those facilities and equipment needed to power artificial intelligence processes and technologies, and includes but is not limited to supercomputers, facilities and equipment needed to operate supercomputers and other related facilities and equipment.

• (b) “City” has that meaning ascribed in the above

• (c) “Council” has that meaning ascribed in the above

• (d) “Public Purposes” means (i) capital and operating costs related to public projects and programs in the Surrounding Area, including but not limited to costs to improve, acquire, operate, maintain, staff and/or repair public buildings, facilities, infrastructure and equipment or other public projects or initiatives related thereto or public programs for the economic development and/or general welfare of City residents in the Surrounding Area, and (ii) grants or other forms of financial aid to governmental and/or nonprofit agencies, departments, commissions, authorities, entities and/or other organizations that serve the City, including the Surrounding Area, and such agencies, departments, commissions, authorities, entities and/or other organizations shall include but not be limited to those providing or otherwise supporting affordable housing in the City, including the Surrounding Area, all to the extent provided by and in accordance with applicable law.

• (e) “Public Purpose Amount” has that meaning provided m Section 2(b) of this

• (f) “Surrounding Area” means those parcels of land in the City, or portions thereof, that are located within a five (5) mile radius of the AI Property.

• (g) “AI Personal Property” means personal property compnsmg Artificial Intelligence Infrastructure in the City.

• (h) “AI Real Property” means those parcels of real property within the City described on Exhibit A attached hereto, to the extent Artificial Intelligence Infrastructure is located, wholly or partially, on such To the extent that any parcels of real property described on

Exhibit A no longer have Artificial Intelligence Infrastructure located, wholly or partially, on such property, such parcels shall no longer constitute AI Real Property.

• (i) “Al Property” means, collectively, AI Personal Property and AI Real

Section 2. Allocation of Public Purpose Amount.

• (a) Subject to annual budgeting and appropriation by Council, the City hereby determines to allocate annually the Public Purpose Amount for Public Purposes, and the Council is hereby authorized to pass such operating budget ordinance, budget amendment or other legislation as necessary to effectuate such appropriation. To the extent so budgeted and appropriated, the Public Purpose Amount shall be used for Public Purposes upon the terms and in the manner provided herein.

• (b) The Public Purpose Amount shall be lawfully available funds of the City equal in amount to 25% of the real and personal property tax revenues collected by the City on the AI Property in the most recent year, which year may be a tax year, fiscal year or calendar year, as determined by the Chief Financial Officer of the Notwithstanding the foregoing, the Public Purpose Amount, as calculated above, to be allocated by the City to Public Purposes in any year shall decrease by that amount of money allocated by other public entities during such year specifically to benefit those areas of the City surrounding the Artificial Intelligence Infrastructure. The Public Purpose Amount, to the extent so budgeted and appropriated, shall be an appropriation from the General Fund of the City or any other lawfully available funds of the City.

• (c) It is the intent of the City that there be $100 million allocated in the aggregate, inclusive of the Public Purpose Amount allocated by the City and monies allocated by other public entities, to benefit those areas of the City surrounding the Artificial Intelligence Infrastructure, and once $100 million in the aggregate has been so allocated, as determined by the Chief Financial Officer of the City, the Council is hereby directed to review the terms of this Ordinance to determine whether further allocation by the City of the Public Purpose Amount for Public Purposes pursuant to the terms herein is necessary or desirable.

• (d) The Council hereby confirms that the provisions of this Ordinance comprise the guidelines directing for what purposes the Public Purpose Amount may be spent, and the Public Purpose Amount, as applied pursuant to the terms herein, promotes the general welfare of the residents of the City. The Public Purpose Amount so appropriated in any year shall be used and expended under the direction and control of Council, as provided herein and pursuant to the terms herein, in conjunction with the guidelines set forth in this Ordinance and, if applicable, Section 6-54-111, Tennessee Code Annotated, as amended, and any related required procedures of the comptroller of the treasury of the State of Tennessee, to the extent so

Section 3. Miscellaneous Authorizations.

All prior actions undertaken by the Mayor of the City (the “Mayor”) or his designee and other officials, employees, attorneys and agents of the City preliminary to and in preparation for the adoption of this Ordinance are hereby ratified, confirmed and approved.

The Mayor or his designee and other appropriate officials of the City are hereby authorized to enter into such agreements, and they and other appropriate officials of the City are hereby authorized to execute such certificates or other documents and take such other actions, as may be necessary or appropriate to carry out the intent of this Ordinance.

Section 4. Severability.

The provisions of this Ordinance are hereby severable. If any of these sections, provisions, sentences, clauses, phrases, or parts are held unconstitutional or void, the remainder of this Ordinance shall continue in full force and effect.

Section 5. Effective Date.

This Ordinance shall take effect from and after the date it shall have been passed by the Council, signed by the Chairman of the Council, and certified and delivered to the Office of Mayor in writing by the comptroller and become effective as otherwise provided by law.

SPONSOR: City Administration

 J. FORD CANALE CHAIRMAN

MD109660

LEGAL 53670