State
Texas-A Great State to Grow A Business In
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
Texas Enterprise Fund
The 78 Texas Legislature established the Texas Enterprise Fund (TEF) to provide financial 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 specific project.
Projects that are considered for TEF support must demonstrate a project’s worthiness, maximize the benefit to the state and realize a significant rate of return of the public dollars being used for economic development in Texas. Capital investment; job creation; wages generated; applicant’s financial strength; applicant’s business history; analysis of the relevant business sector; and federal and local government and private sector financial support of a project are all significant factors in approving the use of TEF.
The Texas Emerging Technology Fund (TETF)
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.
Skills Development Fund
The Skills Development Fund is an innovative program created to assist Texas public community and technical colleges finance 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 partnerships with local community colleges and technical schools to provide custom job training.
Average training costs is $1,800 per trainee; however, the benefit may vary depending on the proposal.
For more information, please contact Dale Robertson with the Texas Workforce Commission at (512) 463-8844 or visit the following link:
http://www.twc.state.tx.us/partners/skills-development-fund
Texas Enterprise Zone Program
Under the statewide cap of 105 projects per biennium a community with less than 250,000 in population may have up to six enterprise projects.
A community with 250,000 in population or greater may have up to nine enterprise projects.
Upon a community designating a business as an enterprise project, and upon that project’s designation being approved by the state,
the business would be eligible for the following incentives:
Manufacturing Sales Tax Exemption
Leased or purchased machinery, equipment, replacement parts, and accessories that are used or consumed in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate 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 constructing new facilities.
Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in processing, packing,
or marketing agricultural products by the original producer at a location operated by the original producer.
Texas Product Development Fund
The Texas Product Development and Small Business Incubator Fund, collectively PDSBI, is a revolving loan program financed through original bond issuances.
The primary objective of the program is to aid in the development, production and commercialization of new or improved products and to foster and stimulate small business in the state. The fund provides asset-based lending with flexible loan terms, competitive Loan-to-Value (LTV) and interest rates. Loan proceeds can be used for a broad range of capital and operating expenditures. Your company can secure loans with property, plant and equipment which can be amortized over the life of the asset. Communities or individual investors can assist as Guarantors.
To be eligible, applicants must have at least 3 years of operating history and have unencumbered assets available for collateral. Preference for funding is given to the state’s defend industry clusters including, but not limited to: nano-technology, biotechnology, biomedicine, renewable energy, agriculture and aerospace. Texas is interested in creating and retaining high-quality jobs.
For more information,
contact the Economic Development Bank at (512) 936-0100 orTexasProduct. Fund@gov.texas.gov.
The Office of the Governor, Texas Economic Development Bank administers the Texas Product/Business Fund at the direction of the Governor’s appointed nine-member board.
Pollution Control Property Tax Abatements
A Texas constitutional amendment providing an exemption from property taxation for pollution 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 first receive a determination from the Texas Commission on Environment Quality (TCEQ) that property is for pollution control purposes. That positive use determination is then provided to the local appraisal district, which must accept the TCEQ’s decision and grant the property an exemption from property taxes.
To be eligible for a positive use determination, the property must have been purchased, acquired, constructed, installed, replaced, or reconstructed after January 1, 1994, to meet or exceed federal, state, or local environmental laws, rules, or regulations.
In-State Tuition for Employees
The Economic Development and Diversification In-state Tuition incentive may be offered to qualified businesses that are in the decision-making process to relocate or expand their operations into Texas.
The incentive is targeted to assist high impact projects that are linked to the strategic economic clusters identified in the state. The incentive allows employees and family members of the qualified businesses to pay in-state tuition fees if the individual files with a Texas institution of higher education.
Without this incentive designation, a student must reside in Texas for a 12-month period to be entitled to pay the tuition fees of a Texas resident.
For more information, 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.
Texas Economic Development Act
In 2001, the 77th Texas Legislature enacted House Bill 1200 creating Tax Code Chapter 313, Texas Economic Development Act, to encourage large-scale manufacturing, research and development, renewable energy, nuclear and integrated gasification combined cycle electric generation facilities and other large capital investment projects in the State of Texas. It requires companies to invest a specified amount of money to qualify for a ten-year limitation on the appraised value of a property for the maintenance and operations portion of the school district property tax.
The local school district must elect to participate in order for the company to recognize this benefit. The Act also requires that the limitation 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 writing the basis for the that determination.
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 information,
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.
