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Capital Access Fund |
Loan program for businesses with fewer than 500 employees. |
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OVERVIEW: |
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The Texas Capital Access Fund was established to increase the
availability of financing for businesses and nonprofit
organizations that face barriers in accessing capital.
Through the use of the Capital Access Fund, businesses that
might otherwise fall outside the guidelines of conventional
lending may still have the opportunity to receive financing.
The essential element of the program is a reserve account
established at the lending institution to act as a credit
enhancement, inducing the financial institution to make a
loan. |
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For more information, see:
http://www.tded.state.tx.us/texascapitalaccess |
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Industrial Revenue Bonds |
Tax-exempt financing to businesses for land and depreciable
property. |
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OVERVIEW: |
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The State of Texas Small Business Industrial Revenue Bond Program
is designed to provide tax-exempt financing to finance land
and depreciable property for eligible industrial or
manufacturing projects. The Development Corporation Act
allows cities, counties, conservation and reclamation
districts to form non-profit industrial development
corporations or authorities on their behalf. The purpose is
to issue taxable and tax-exempt bonds for eligible projects
in their jurisdictions.
The industrial development corporation acts as a conduit
through which all monies are channeled. Generally, all debt
services on the bonds are paid by the business under the
terms of a lease, sale, or loan agreement. As such, it does
not constitute a debt or obligation of the governmental
unit, the industrial development corporation, or the State
of Texas. |
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For more information, see:
http://www.tded.state.tx.us/TexasIRBProgram/ |
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Infrastructure Development |
Grants and loans to non-entitlement communities for public and
private infrastructure projects. |
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OVERVIEW: |
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The Texas Capital Fund Infrastructure Development Program is an
economic development tool designed to provide financial
resources to non-entitlement communities. 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. |
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For more information, see:
http://www.tded.state.tx.us/TexasCapitalFund/tcf-infr.htm |
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Enterprise Zone Program |
Encouraging job creation and capital investment by providing tax
incentives to businesses in economically distressed areas. |
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OVERVIEW: |
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The purpose of the Texas Enterprise Zone Program is to encourage
job creation and capital investment in areas of economic
distress. The program provides communities with an economic
development tool to offer state and local incentives
and program priority to new or expanding business in these
designated areas.
The Texas Department of Economic Development (TDED)
administers and coordinates local, state and federal
efforts. The Department provides community and business
assistance, approves applications and evaluates and reports
the program’s effectiveness to the Legislature.
The purpose of the Texas Enterprise Zone Program is to
encourage job creation and capital investment in areas of
economic distress. The program provides communities with an
economic development tool to offer state and local
incentives and program priority to new or expanding business
in these designated areas.
The Texas Department of Economic Development (TDED)
administers and coordinates local, state and federal
efforts. The Department provides community and business
assistance, approves applications and evaluates and reports
the program’s effectiveness to the Legislature. |
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For more information, see:
http://www.tded.state.tx.us/TexasEnterpriseZone |
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Texas Skills Development Fund |
Texas Skills aids in financing for training programs. Training
can be customized and specifically tailored to industry
needs. |
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SERVICES: |
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The Skills Development Fund is an innovative program created to
assist Texas public community and technical colleges with
financing for 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. |
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For more information, see:
http://www.twc.state.tx.us/svcs/funds/sdfintro.htm |
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State Sales and Use Tax Exemptions |
Exemption from state sales and use tax on equipment, new
construction and specific utilities. |
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OVERVIEW: |
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Manufacturing Machinery & Equipment:
Leased or purchased machinery, equipment, replacement parts,
and accessories that have a useful life of more than six
months, and 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.
Cost of equipment x 8.25% = State sales and use tax
exemption
Natural Gas & Electricity:
Texas companies are exempt from paying state sales and use
tax on electricity and natural gas used in manufacturing,
processing, or fabricating tangible personal property. The
company must complete a “predominant use study” that shows
that at least 50% of the electricity or natural gas consumed
by the business directly causes a physical change to a
product. |
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Property Tax Rule 9.105 |
Refund of State Taxes on Abated Property. |
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OVERVIEW: |
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The Texas Comptroller of Public Accounts offers a refund of State
taxes paid by companies owning certain abated property. A
company who meets the following three conditions may apply
for a refund:
* Paid property taxes to a school district on property that
is located in a reinvestment zone established under Chapter
312.
* Is exempt in whole or in part from property tax imposed
by a city or county under a tax abatement agreement
established under Chapter 312.
* Is not in a tax abatement agreement with a school
district.
The refund is equal to the amount of property taxes that
would have been paid had the company entered into a school
district abatement agreement with terms identical to the
city or county abatement agreement, not to exceed the net
state sales and use taxes and state franchise taxes paid or
collected and remitted during that calendar year. The
refund amount may also be limited by a statewide
appropriation per year for this refund program. |
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Freeport Exemption |
Exemption for various types of goods. |
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OVERVIEW: |
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A community may choose to offer the Freeport exemption for
various types of goods that are detained in Texas for a
short period of time. Freeport property includes goods,
wares, merchandise, ores, and certain aircraft and aircraft
parts. Freeport property qualifies for an exemption from ad
valorem taxation only if it has been detained in the state
for 175 days or less for the purpose of assembly, storage,
manufacturing, processing, or fabricating. |
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Economic Development and Diversification In-State Tuition for
Employees |
In-state tuition offer for new employees. |
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OVERVIEW: |
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The Economic Development and Diversification In-state Tuition
incentive may be offered to qualified businesses who are in
the decision-making process to relocate or expand their
operations into Texas. 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. |
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Franchise Tax Credits for Economic Development |
Tax credits for economic development. |
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OVERVIEW: |
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The Texas Legislature recently created new franchise tax credits
for economic development. Eligible corporations may take
advantage of certain research and development, capital
investment, and job creation credits. Businesses located in
designated county strategic investment areas (SIA) qualify
for these tax credits.
Research and Development (R & D):
A corporation may claim a credit for certain incremental
qualified research expenses incurred and basic research
payments made for research conducted in Texas during the
period upon which the tax is based.
Job Creation:
To be eligible for a job creation credit, a corporation must
be a qualified business and must create at least 10
qualifying jobs. In addition, the corporation must pay an
average weekly wage for each year in which credits are
claimed of at least 110 percent of the county average weekly
wage for the counties where the jobs are located.
Capital Investment:
A corporation may use a capital investment credit to reduce
its franchise tax liability. To take advantage of this
credit a corporation must be a qualified business; pay an
average weekly wage that is at least 110 percent of the
county average weekly wage in the county where the job is
located; offer a specified group health benefit plan to all
full time employees, for which the corporation pays at least
80 percent of the costs; and make a minimum $500,000
qualified capital investment (QCI). |
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Bonds |
Financing for construction or upgrade projects on governmentally
owned facilities. |
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OVERVIEW: |
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Sales Tax Bonds
Sales Tax Bonds do not fall under the volume cap and are
eligible to communities that have passed the economic
development sales tax.
Exempt-Facility Bonds
Bonds can be issued to finance certain facilities such as
airports, dock and wharf facilities, mass commuting
facilities, high-speed inter-rail facilities, or certain
qualified hazardous waste facilities (including certain
training and storage facilities). There is no limit on the
amount of the issue and these issues do not require a
reservation under the volume cap. Although the facility
must be governmentally owned, it may be leased or subject to
management contracts with the business.
Other types of exempt bonds include projects for water,
sewage and solid waste facilities, facilities for the local
furnishing of electricity or gas, local district heating or
cooling facilities. These types of exempt-facility issues
must reserve a portion of the volume cap. Exempt-facility
bonds that are not governmentally owned may reserve up to
$25 million in tax-exempt volume cap allocation each year,
however, there is no restriction to project size. |
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Linked Deposit Fund |
Lower interest rate loan program for qualified business. |
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OVERVIEW: |
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The State of Texas Linked Deposit Program ("Linked Deposit
Program") was established to encourage lending to
historically underutilized businesses, child care providers,
non-profit corporations, and/or small businesses located in
an Enterprise Zone by providing lenders and borrowers a
lower cost of capital. |
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For more information, See:
http://www.tded.state.tx.us/TexasLinkedDeposit/ |
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Real Estate Development |
Interest free loans to non-entitlement cities for real estate
development. |
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OVERVIEW: |
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The Texas Capital Fund Real Estate Development Program is an
economic development tool designed to provide financial
resources to non-entitlement communities. Funds must be used
for real estate development to assist a business that
commits to create and/or retain permanent jobs, primarily
for low and moderate-income persons. This program encourages
new business development and expansions. |
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USE OF PROCEEDS: |
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Funds may be used for: Acquisition, Construction, Rehabilitation.
Refinancing is not an eligible use of proceeds. |
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For more information, see:
http://www.tded.state.tx.us/TexasCapitalFund/tcf-real.htm |
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Funds must be used for real estate development (acquisitions,
construction and/or rehabilitation) to assist a business
which commits to create and/or retain permanent jobs
primarily for low and moderate income persons. This program
encourages business development and expansions located in
non-entitlement communites. The minimum award is $50,000
and the maximum is $750,000. The award may not exceed fifty
percent (50%) of the total project cost. Funds are provided
with no interest accruing and with payments based on a 20
year amortization schedule. |
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P.O. Box 1609