Introduction

The Corpus Christi Regional Economic Development Corporation serves as the central point of contact for incentive application and processing. The availability and amount of the incentives depend on the number of jobs to be created or retained, the annual wages of the jobs, and factors that would contribute to the strengthen of the local economy.

Renewal Community

Corpus Christi’s Renewal Community provides special federal tax incentives to businesses located in the Renewal Community which includes 1990 census tracts 1, 3, 4, 10 and 11 and 2000 census tracts 5, 7, 13, 35, and 50.  Renewal Community incentives are:

• Renewal Community Wage Credit
• Welfare to Work
• Work Opportunity Tax Credit
• Commercial Revitalization Deduction
• Increased Section 179
• Historic Tax Credit
• Reduced Development Fees
• Tax Abatement

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More detailed Renewal Community information is available through the Corpus Christi Regional Economic Development Corporation.

Introduction

The Corpus Christi Regional Economic Development Corporation serves as the central point of contact for incentive application and processing. The availability and amount of the incentives depend on the number of jobs to be created or retained, the annual wages of the jobs, and factors that would contribute to the strengthen of the local economy.

Strategic Investment Areas (SIA)

Nueces County, including the City of Corpus Christi, is a designated SIA for 2007. The Renewal Community area (discussed above) is an SIA until 2009. Businesses within the Renewal Community are eligible for job creation, investment and R&D credits against the franchise tax as long as the business has a franchise tax liability and is not a Limited Partnership.

Corpus Christi Business & Job Development Corporation (4A Funds)

On November 5, 2002 Corpus Christi voters passed Proposition 2 which authorized the use of 1/8^th of a cent of the local sales tax for use in the attraction of long-term investment and the establishment of new jobs in Corpus Christi.  The Corpus Christi Business & Job Development Corporation Board oversees the allocation of the dedicated funds, commonly referred to as 4A funds, which are intended to promote, encourage and enhance the creation of jobs which expand the city’s tax base and economy through the retention, expansion and recruitment of primary employers. The 4A funds may be used for the following:

• Land, facilities, equipment & infrastructure grants
• Loan participation/guarantees
• Direct low interest loans
• Rent subsidies
• Relocation and moving expense reimbursements
• Job training grants/loans

The Corpus Christi Regional Economic Development Corporation is the authorized lead organization that prepares the incentive proposals and guides eligible primary employers through the approval process.

The City of Corpus Christi will, on an individual merit basis, give consideration to providing economic incentives to a company in accordance with the Corpus Christi Chapter 380 Economic development Program Policies and Procedures as authorized by Chapter 380 of the Texas Local Government Code, as amended from time to time.

Chapter 380 Program requirements:

A. To be considered for incentives as a Chapter 380 Economic Development Program under these Policies and Procedures, a project must at least meet the following minimum requirements:

1. Either the project

a. will result in a minimum increased taxable value for the City of $25,000,000 in real and business  personal property (excluding inventory and supplies); or

b. will result in the retention of at least 500 full-time permanent jobs and each job shall pay at least a “living wage.” For the purposes of this Program “living wage” shall mean that annual amount determined by the U. S. Department of Health and Human Services for the Corpus Christi area as being at the poverty level for a family of three, divided by 2,080 hours per year; and

2. In addition, the project

a. will make a unique or unequaled contribution to development or redevelopment efforts in the City  of Corpus Christi, due to its magnitude, significance to the community or aesthetic quality; or

b. will enhance the City’s fiscal ability to provide high quality municipal services for the safety,  comfort and enjoyment of Corpus Christi residents.

B. A project shall not be eligible for incentives under these Policies and Procedures if a building permit has been issued for the project prior to making application in accordance with these Policies and Procedures, except a project providing job retention as set forth in

1. b. above

C. Incentives provided in accordance with these Policies and Procedures will be provided only to the extent that the revenue realized by the City and attributable to a project exceeds a minimum amount established by the Agreement. The public benefit or amount of revenue realized by the City and attributable to the project must be commensurate with value of any incentives granted under this Program.

Additional factors to be considered by the City Council in determining whether to authorize an Agreement for incentives as a Chapter 380 Economic Development Program (Program) are:

A. the number and types of jobs to be created or retained;

B. the financial capacity of the applicant to undertake and complete the proposed program;

C. other incentive programs for which the applicant has applied or is qualified;

D. the market conditions and growth potential for the business activity, and

E. any other factors the City Council finds helpful and relevant to accomplishing the City's economic development objectives.

Industrial Districts

There are three industrial districts in Corpus Christi. These districts have been deannexed from the city and as part of the deannexation agreement companies receive a city tax phase-in when they locate in an industrial district.

Projects that have less than $5 million in capital investment will be taxed by the city at 60% of value (40% discount or abatement). Projects over $5 million in capital investment receive the following city tax phase-in schedule for improvements:

There are no zoning, platting, permitting or building code enforcement requirements for companies located in an industrial district.

The industrial district agreement, which can be renewed every ten years, includes a “Most Favored Nations” clause which provides that all entities in the industrial district must be treated alike. If one entity receives a benefit then that benefit must be extended to all other entities in the industrial district.

The two industrial districts are below:

Industrial District 1

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Industrial District 2

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Property Tax Abatements

Tax abatements are also available to companies that are planning to invest in new facilities that are located outside of the Renewal Community and industrial districts.  Tax abatements are negotiated with the taxing entities for each project, and the maximum abatement is 100% for ten years.  The CCREDC helps draft the legal documents, makes recommendations to the various taxing entities and guides the tax abatement proposal through the approval process.

State Enterprise Zones

Such zones are allocated every two years by the State. Communities are assigned “slots” that may be used depending on proposed investment and job creation. The slots are not guaranteed and the total “slots” available every two years are on a first come basis. The company may be eligible for a refund of sales tax paid. The level of refund is based on the level of proposed investment and jobs retained or created over a period of 3-5 years. Application for Enterprise Zone benefits are due September 1^st, December 1^st, March 1^st, and July 1^st, until all “slots” are assigned. The Enterprise Zone parameters and refund schedule follows:

Freeport Exemption

Property tax exemptions on certain business inventory items are available from a variety of Nueces County taxing entities that have authorized the Freeport Exemption. The Freeport Exemption pertains to the following inventories:

1. Items to be exported out of state within 175 days of their arrival in Texas.
2. Items in Texas for assembling, storing, manufacturing, repair, maintenance, processing or fabricating purposes.
3. Items that remain in the company's continous possession the entire time they are in the state.
4. Petroleum products are not eligible for the Freeport Exemption.

The Nueces County taxing entities that have authorized the Freeport Exemption are:

• City of Corpus Christi
• City of Agua Dulce
• City of Port Aransas
• City of Robstown
• Agua Dulce ISD
• Driscoll ISD
• London ISD
• Robstown ISD
• West Oso ISD

Industrial Revenue Bonds

The State of Texas Industrial Revenue Bond (IRB) Program is designed to provide tax-exempt or taxable financing for eligible industrial or manufacturing projects as defined in the Development Corporation Act of 1979.  The Development Corporation Act allows cities, counties, conservation and reclamation districts to form non-profit industrial development corporations (IDC) or authorities on their behalf.  The purpose of the IRB program is to provide up to $10 million in bonds for projects within the IDC’s jurisdictions.

The industrial development corporation acts as a conduit through which monies are channeled. Generally, bond debt service is 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 IDC or the State of Texas.

Training Programs

The Corpus Christi Regional Economic Development Corporation has a vested interest in the quality of the local workforce. In an effort to enhance the workforce, and to meet the needs of new and existing employers, incentive funds are available for job training.  Companies may take advantage of local training programs that will develop and upgrade the skills of employees and new hires.

Tax Increment Financing

Tax increment financing is an economic development tool that can fund public improvements such as water and wastewater lines, roads, and other improvements that are needed for the successful development of a project. TIFs are widely used throughout the U.S. and are popular because of their flexibility and local control.

Texas Enterprise Fund

In 2003, the 78th Texas Legislature established the $295 million Texas Enterprise Fund (TEF) to allow the state to respond quickly and aggressively to opportunities to bring jobs and employers to Texas.

The Texas Enterprise Fund provides the state's leaders with the flexibility and financial resources to help strengthen the state's economy. The fund can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives. Before funds can be awarded, the Governor, Lieutenant Governor and Speaker must unanimously agree to support the use of the Texas Enterprise Fund for each specific project.

The Texas Enterprise Fund will be used primarily to attract new business to the state or assist with the substantial expansion of an existing business as part of a competitive recruitment situation.  State leadership also will be able to use TEF funds to leverage other resources for an economic development project.

Texas Emerging Technology Fund

The Texas Emerging Technology Fund was established on September 1, 2005. The ETF serves as a funding mechanism for emerging technologies that will create high-quality new jobs in the state. The Fiscal Year 2007 ETF funding allocation is as follows:

• $50 million is reserved to Regional Centers of Innovation and Commercialization project activity.
• $25 million is reserved for emerging technology research matching grant activity.
• $25 million is reserved for acquisition of research superiority grant activity.

CAPCO Program

This new investment vehicle provides two hundred million dollars ($200,000,000) in new working capital for qualified start-up businesses in Texas. Thirty percent (30%) or sixty million dollars ($60,000,000) are assigned for use in SIAs (discussed above). Eighty percent (80%) of the payroll must been paid to Texas employees and the business must have no more than 100 employees at the time of funding.