Texas combines its wide horizons and accommodating climate, its diverse population and healthy markets and a stubborn pursuit to create an excellent environment for business.

Texas Summary of State Incentives

The 78 Texas Legislature established the Texas Enterprise Fund (TEF) to provide fnancial resources to help strengthen the state’s economy.
The Governor, Lieutenant Governor, and the Speaker of the House must unanimously agree to sup- port the use of TEF for each specifc project.

Projects that are considered for TEF support must demonstrate a project’s worthiness, maximize the beneft to the state and realize a signifcant rate
of return of the public dollars being used for economic development in Texas. Capital invest- ment; job creaton; wages generated; applicant’s fnancial strength;
applicant’s business history; analysis of the relevant business sector; and federal and local government and private sector fnancial support of a project are all signifcant factors in approving the use of TEF.

The Texas Emerging Technology Fund (TETF) was created by legislation in 2005 and had its first award given out by 2006.
The $200 million is designed to help create jobs and to develop the economy of Texas over the long-term by expediting the development and
commercialization of new technologies and attracting and creating jobs in technology fields.
It focuses on three main investment areas:

  • Increasing research collaboration through new regional centers of innovation and commercialization
  • Matching research grants funds
  • Attracting more top-notch research talent

This fund was created to provide Texas with an unparalleled advantage in the research, development and commercialization of emerging technologies. The program works through partnerships
between the state, institutions of higher education and private industry and is dedicated
to three areas: Regional Centers of Innovation and Commercialization; matching grant funds for R&D
projects that accelerate commercialization and that have demonstrated an ability to receive or have
received federal grants or non-state grants; and assisting Texas public universities in attracting highly
renowned research teams from universities and institutions in other states.

The Skills Development Fund is an innovatve program created to assist Texas public community and technical colleges fnance customized job training for their local businesses. The Fund was established by the Legislature in 1995 and is administered by the Texas Workforce Commission. Grants are provided to help companies and labor unions form part- nerships with local community colleges and technical schools to provide custom job training.
Average training costs is $1,800 per trainee; however, the beneft may vary depending on the proposal.

For more informaton, please contact Dale Robertson with the Texas Workforce Commission at (512) 463-8844 or visit the following link:

Under the statewide cap of 105 projects per biennium a community with less than 250,000 in populaton may have up to six enterprise projects.
A community with 250,000 in populaton or greater may have up to nine enterprise projects.

Upon a community designatng a business as an enterprise project, and upon that project’s designaton being approved by the state,
the business would be eligible for the following incentves:


Leased or purchased machinery, equipment, replacement parts, and accessories that are used or consumed in the man- ufacturing, processing, fabricatng,
or repairing of tangible personal property for ultmate sale, are exempt from state and local sales and use tax. Texas businesses are exempt from paying state sales and use tax on labor for constructng new facilites.

Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in pro- cessing, packing,
or marketng agricultural products by the original producer at a locaton operated by the original pro- ducer.

The Texas Product Development and Small Business Incubator Fund, collectvely PDSBI, is a revolving loan program f- nanced through original bond issuances.
The primary objectve of the program is to aid in the development, producton and commercializaton of new or improved products and to foster and stmulate small business in the state.
The fund provides asset-based lending with fexible loan terms, compettve Loan-to-Value (LTV) and interest rates. Loan proceeds can be used for a broad range of capital and operatng expenditures.
Your company can secure loans with property, plant and equipment which can be amortzed over the life of the asset. Communites or individual investors can assist as Guarantors.

To be eligible, applicants must have at least 3 years of operatng history and have unencumbered assets available for collateral. Preference for funding is given to the state’s defned industry clusters including,
but not limited to: nano- technology, biotechnology, biomedicine, renewable energy, agriculture and aerospace. Texas is interested in creatng and retaining high-quality jobs. For more informaton,
contact the Economic Development Bank at (512) 936-0100 orTexasProduct.Fund@gov.texas.gov. The Ofce of the Governor, Texas Economic Development Bank administers the Texas Product/Business Fund at the directon of the Governor’s appointed nine member board.

A Texas consttutonal amendment providing an exempton from property taxaton for polluton control was approved in 1993. The intent was to ensure that compliance with environmental mandates, through capital investments,
did not result in an increase in a facility’s property taxes. A facility must frst receive a determinaton from the Texas Commission on Environment Quality (TCEQ) that property is for polluton control purposes.
That positve use determinaton is then provided to the local appraisal district, which must accept the TCEQ’s decision and grant the property an exempton from property taxes.

To be eligible for a positve use determinaton, the property must have been purchased, acquired, constructed, installed, replaced, or reconstructed afer January 1, 1994, to meet or exceed federal,
state, or local environmental laws, rules, or regulatons.

For more informaton, please see the following link: htps://texaswideopenforbusiness.com/services

/tax-incentvesor contact David Greer with the Texas Commission on Environmental Quality at (512) 239 -5344.

In 2001, the 77th Texas Legislature enacted House Bill 1200 creatng Tax Code Chapter 313, Texas Economic Development Act, to encourage large-scale manufacturing, research and development, renewable e nergy, nuclear and integrated gas- ifcaton combined cycle electric generaton
facilites and other large capital investment projects in the State of Texas. It requires companies to invest a specifed amount of money to qualify for a ten year limitaton on the appraised value of a property for the maintenance and operatons porton of the school district property tax.
The local school district must elect to partcipate in order for the company to recognize this beneft. The Act alsorequires that the limitaton on appraised value be a determining factor in the applicant’s decision to invest capital and construct the project in the state
and requires that the Comptroller state in writng the basis for the that determinaton.

The qualifying investment amount is determined on a sliding scale that begins at $100 million for large urban areas and $30 million for rural areas.
The qualifying investment amount is reduced for areas with a lower tax base. For more infor – maton,

The Economic Development and Diversifcaton In-state Tuiton incentve may be ofered to qualifed businesses that are in the decision-making process to relocate or expand their operatons into Texas.
The incentve is targeted to assist high impact projects that are linked to the strategic economic clusters identfed in the state.
The incentve allows employees and family members of the qualifed businesses to pay in-state tuiton fees if the individual fles with a Texas insttuton of higher educaton.

Without this incentve designaton, a student must reside in Texas for a 12-month period to be ent- tled to pay the tuiton fees of a Texas resident.

An economic development tool designed to provide financial resources to communities under 50,000 in population. Funds from this program can be utilized for public infrastructure needed to assist a business which commits to create and/or retain permanent jobs, primarily for low and moderate income persons.

This program encourages new business development and expansions. The minimum award is $50,000 and the maximum is $500,000.
The award may not exceed 50 percent of the total project costs. A minimum equity injection of 10 percent of the total project
cost by the business is required. There are three funding award rounds per program year.

Texas Manufacturing Assistance Center (TMAC) is part of a national network of Manufacturing Extension Partnerships supported by the National Institute of Standards and Technology.
TMAC helps identify problems in manufacturing processes, recommends solutions and helps execute projects.
TMAC field engineers operate out of offices located nearby to provide hands-on assistance to firms seeking to upgrade their operations to become more competitive.

TMAC services include assessment and benchmarking of existing operations; technical awareness projects (seminars, workshops, etc.); technical assistance projects including specific technology,
engineering or management solutions (e.g., TQM, ISO 9000, Process Improvement,
Inventory Control and Management, Plant/Equipment upgrades, CAD/CAE/CAM); and Deployment Group Management to assist sets of companies with common problems implement common solutions.