INCENTIVES

Local Incentives

The 10/35 Economic Development Alliance provides information on New Braunfels and Seguin Planning & Zoning Commissions and comprehensive master plans. Taxes are among the lowest in the state. Fast-tract permitting is a service available for new industries locating to 10/35 Economic Development Alliance region.

Each incentive program is carefully tailored for each company’s needs and is based on the number of jobs, amount of wages above the average county wage, and cost of capital investment to the community. The following economic programs are considered to assist interested business and industries in their expansion or relocation:

• Incentives such as grants and loans
• Reinvestment Zone Designation
• Triple Freeport Exemption
• Industrial Development Bond Financing
• State-sponsored incentives
• Tax Abatements
• TIF/TIRZ
• Chapter 380/381

A more in-depth breakdown of the local programs is listed below:

SALES TAX REFUND
If your company locates in the 10/35 Economic Development Alliance Enterprise Zone and qualifies as an Enterprise Project, you could qualify for up to $2,500 per job in sales tax refunds for qualified equipment purchases & building construction. Both local and state sales tax would be utilized in the calculations.

FREEPORT EXEMPTION
10/35 Economic Development Alliance has “Triple Freeport Exemption” status via each City (New Braunfels and Seguin), County (Comal. Guadalupe) and local school districts – which exempts taxation on various types of goods that are detained in Texas for a short period of time (no less than 175 days). The exemption covers good, wares, merchandise, ores and certain aircraft and aircraft parts, but does not include oil, natural gas or petroleum products..

STATE FRANCHISE TAX DEDUCTION
As an Enterprise project in the 10/35 Economic Development Alliance region, your company could be eligible to deduct from its taxable capital 50% of its capital investment. The deduction may be taken on each franchise tax report based on your fiscal year.

SCHOOL PROPERTY TAX REFUNDS
In 2001 during the 77th Legislative session House Bill 1200 provided relief from school property taxes for large capital investments. The law applies only to a corporation or limited liability company that is subject to payment of state franchise taxes. In addition the company must create at least twenty-five new permanent jobs, pay at least 80% of a group health benefit plan for its employees and pay at least 110% of the county average weekly wage.

INDUSTRIAL DEVELOPMENT BOND FINANCING
Governed by the Texas Development Corporation Act of 1979, political subdivisions are authorized to create non-profit lending corporations to provide tax exempt financing for commercial, industrial and manufacturing projects.. A number of projects have been approved and bonds sold to finance projects in 10/35 Economic Development Alliance region.

 FACILITATION OF PERMITS AND PRICING

 BUILDING PERMITS

Building Permits are required prior to the construction or remodeling of any structure. This includes repairs, demolition and alterations. Qualified construction contractors are generally familiar with these requirements and can obtain these permits. A list of licensed contractors is available through each City (New Braunfels and Seguin.) City building officials will conduct various inspections and issue a Certificate of Occupancy if the construction is sufficiently complete.

ZONING

The 10/35 Economic Development Alliance has comprehensive zoning ordinances. The ordinances address all land uses from residential to industrial. Flexibility was built into the ordinance to enhance development; however, the usual protections addressing the integrity of residential areas are also present. There are not state building codes; however, there are state regulations governing fire protection, underground storage facilities, and the environment.

TAX ABATEMENTS 

Tax abatement agreements are made with the owners of real property to exempt from taxation a portion of the value of the real property or of tangible personal property, or both. The duration of an agreement may be for a period of time determined appropriate by the City Council and County based on the economic life of the improvements and consistent with the provisions of this policy, but in no case for more than ten years in accordance with state law. Special terms and conditions may be set in the agreement governing each specific tax abatement.

WORKFORCE TRAINING

The communities established the Central Texas Technology Center in 2004 to further meet the needs of local employers. The campus, operated by Alamo Colleges specializes in technical skills training. The campus is owned by the cities in the 10/35 Economic Development Alliance and offers a wide range of academic, technical, and continuing education programs to include an Associate of Arts Degrees. The CTTC is the regional workforce development center for 10/35 Economic Development Alliance regional area.

ECONOMIC DEVELOPMENT CORPORATION FINANCING
The 10/35 Economic Development Alliance Industrial Development Corporation is established by City Council and use a portion of the local sales tax to consider funding for the following  types of qualified projects.

Business Development:
  Direct Loans, Guarantees, Interest Subsidies, Grants, Relocation and Moving Expenses, Subsidized Land & Building costs, Equipment purchases, GAP                          financing.

Facility Development:
  Building construction, Existing building expansion and upgrades, Industrial land  development.

                Infrastructure Development:  Utility Extensions to Industry, Utility Development to key industrial areas, Infrastructure upgrade, rail spurs for industry.

Workforce Development:
  Job Training Costs, Equipment for Training Programs, coordinate with ISDS, Supplement Skills Development Fund grants, Technical/Vocational center.

 

Financial Incentives

CHAPTER 380/381 ECONOMIC DEVELOPMENT GRANTS

The 10/35 Economic Development Alliance region offers economic development loans in accordance with Chapter 380/381 of the Texas Local Government Code.  Grants and loans can be provided to eligible prospects by the City Council and are determined on a case-to-case basis. As stated in Chapter 380/381, the economic development grants must promote development and diversification of the economy of the state, elimination of unemployment or underemployment in the state, and development and expansion of commerce in the state.

INDUSTRIAL REVENUE BONDS

The State of Texas 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 and 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.

TAX INCREMENT FINANCING (TIF) FUNDS

10/35 Economic Development Alliance has multiple established special districts and Tax Increment Reinvestment Zones (TIRZ). Every TIRZ is created to meet the unique individual needs of the developer. For more information about how TIRZ, contact the 10/35 Economic Development Alliance.

State Incentives

Texas has emerged and continues to prove that it is the best state in which to do business in. This past year Texas has been recognized as America’s Top State for Economy (CNBC, July 2009), Number One for Business (Business Facilities 2009), The Number One Exporting US State for seven straight years (WERTrade 2009), the 2008 Gold Shovel Recipient (Area Development, June/July 2009), and the Number one State for Business Growth (Chief Executive Magazine).

The Texas Economic Development Bank was established to provide flexible funding and oversight of several finance and tax incentive programs.  The incentive programs target three key audiences which include Texas businesses, Texas communities and Texas lending institutions.  The Economic Development Bank programs include Finance Programs, Enterprise Programs and Small Business Assistance. The Bank’s effectiveness is measured by the number of jobs created and retained and the total amount of non state funds leveraged as a result of the bank’s efforts. The Bank offers a variety of financial incentives to help communities and businesses in this state compete and succeed in the global marketplace. The Bank also helps communities get financing to fund their economic development efforts.

The Texas Economic Development Bank was established for the purpose of:

  • Providing globally competitive, cost-effective state incentives to expanding businesses operating in this state and businesses relocating to this state
  • Ensuring that communities and businesses in this state have access to capital for economic development purposes

Financial Resources:

  • Emerging Technology Fund
  • Enterprise Fund
  • Loan Assistance
  • Tax Incentives

The State of Texas is able to offer many competitive incentive programs to help establish and expand businesses across the state. A more in depth breakdown of the programs is listed below.

TEXAS ENTERPRISE FUND

The fund can be used for a variety of economic development projects including infrastructure and community development, job training programs and business incentives. To be eligible for TEF support, a project must demonstrate a significant return on the state’s investment and strong local support.  The review process will consider a variety of factors, including job creation and wages, capital investment, financial strength of the applicant, applicant’s business history, analysis of the relevant business sector, and public and private sector financial support. Before funds can be awarded, the governor, lieutenant governor and speaker must unanimously agree to support the use of the TEF for each specific project.

TEXAS ENTERPRISE ZONE PROGRAM

The purpose of the Texas Enterprise Zone Program is to encourage job creation and capital investment in areas of economic distress by providing communities with an economic development tool through which they can offer state and local incentives and program priority to new or expanding business located in these designated areas.

TEXAS LEVERAGE FUND

The Texas Leverage Fund (TLF) is an “economic development bank” offering an added source of financing to communities that have passed the economic development sales tax. This program allows the community to make loans to local businesses for expansion or to recruit new industries.

TEXAS LINKED DEPOSIT PROGRAM

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.

SMALL BUSINESS ADMINISTRATION 504 LOAN PROGRAM

The Small Business Administration (SBA) was established in 1953 as an independent agency of the federal government to aid, counsel and assist small business concerns. The SBA works with Economic Development corporations and private-sector lenders to provide financing to small businesses through the 504 Loan Program. The 504 Loan Program provides growing businesses with long-term, fixed-rate financing for major fixed assets such as land and buildings. Typically a 504 project includes:

  • A loan secured from a private sector lender with a senior lien covering up to 50 percent of the project cost
  • A loan secured from a CDC (backed by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost
  • A contribution from the borrower of at least 10 percent equity

TEXAS PRODUCT/BUSINESS FUND

The state of Texas Product/Business Fund provides capital loans for product commercialization and businesses.
The fund provides asset back financing to companies currently doing business in the state.  Financing is done in the form of direct asset based loans with a variable interest rate tied to London Interbank Offered Rate (LIBOR).  Loans can be amortized up to the life of the asset.

SKILLS DEVELOPMENT FUND

The Skills Development Fund program assists businesses and trade unions by financing the design and implementation of customized job training projects. This fund successfully merges business needs and local customized training opportunities into a winning formula to increase the skills level and wages of the Texas workforce.

DEFENSE ECONOMIC READJUSTMENT ZONE PROGRAM
The Defense Economic Readjustment Zone Program (DERZ) was established as a tool for business recruitment and job creation in adversely impacted defense dependent communities. It is designed to provide assistance to Texas communities, businesses and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures.

 

manufacturing

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