Taxing entities in the region are very competitive in attracting companies that create primary jobs, which bring new revenues into the area (versus service sector jobs which do not bring in new revenues). The entities have approved temporary tax abatement for qualified projects. There is also help with streamline permitting within the city. There are different levels of incentives based on the investment, number of permanent jobs and type of industry. Incentive offers are performance-based and are reflective of the value of return on investment to the respective taxing entities. In Texas, incentives process starts at the local level. These incentives are listed below.
Texas Enterprise Fund
The Texas Enterprise Fund provides the state’s leaders with a “deal closing fund” that has 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 review process will consider a variety of factors associated with each project, including job creation and wages, capital investment, the financial strength of the applicant, the applicant’s business history, analysis of the relevant business sector, and public and private sector financial support.
Texas Enterprise Zone Program
The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December. (https://texaswideopenforbusiness.com/services/tax-incentives)
Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refund is related to both the capital investment and jobs created at the qualified business site. The designation period is up to five years, non-inclusive of a 90-day window prior to the application deadline. Employment and capital investment commitments must be incurred and met within this timeframe. Projects may be physically located in or outside of an Enterprise Zone. If located within a zone, the company must commit that at least 25% of their new employees will meet economically disadvantaged or enterprise zone residence requirements. If located outside of a zone, the company commits that at least 35% of their new employees will meet economically disadvantaged or enterprise zone residency requirements. Typically, companies may receive $2,500 in TEZ funds for each qualified job created.
TEXAS SKILLS DEVELOPMENT FUND
Texas supports a program where employers can work with local colleges or WorkSource companies to provide training for their employees. These grants can be up to $1,500/employee. In this area, a company would work through Del Mar College who will submit the grant request, outline a syllabus, and administer the funds. The company would work with Del Mar College to formulate the syllabus and the trainees must be current employees at the time of training.
TAX ABATEMENT PROGRAM
The City of Corpus Christi, Nueces County, San Patricio County, and Del Mar College all have a tax abatement policy. These policies allow a company that is expanding or relocating to receive a tax abatement benefit from each of these taxing entities. There is up to 100% abatement at the city level and up to 70% abatement at the county and college level. There is an annual report due from the company concerning buying local.
The first requirement is that construction cannot have begun prior to the application. The company must be engaged in basic manufacturing or service facilities, petrochemical facilities, regional telecommunications/data processing centers, regional visitor/amusement facilities, and projects located in certain zones.
Chapter 313 Tax Limitation
This Act allows school districts to attract new taxable property and create jobs by offering a tax credit and an eight-year limitation on the appraised value of a property for the maintenance and operations portion of the school district property tax. The property remains fully taxable for the purposes of any school district debt service tax.
In exchange for the appraised value limitation and tax credit, an agreement with the school district to create a specific number of jobs and be devoted to manufacturing, research and development, a clean coal project, an advanced clean energy project, renewable energy electric generation, electric power generation using integrated gasification combined cycle technology, nuclear electric power generation, or a computer center used primarily in connection to one of the other categories. To obtain a limitation, a property owner must file an application with the school district. If the school district decides to consider the application, the school district must send a copy of the application to the Comptroller and the relevant appraisal district. The Comptroller has up to 91 days to review an application after receiving it from the school district, and the school district has up to 151 days to act on it after receiving it from the applicant.
The Freeport Exemption
The freeport exemption includes a total exemption for personal property, excluding petroleum products, which is detained in this state for a temporary period (175 days or fewer) for assembling, storing, manufacturing, processing or fabrication purposes. Applications for freeport exemptions must be filed with the county appraisal district, and the chief appraiser will compute the exemption, if any.
These entities are those that have a Freeport Exemption:
Counties: San Patricio and Jim Wells
Cities: Corpus Christi and Robstown
School Districts: Agua Dulce, Ingleside, Robstown and West Oso.
Corpus Christi Type A Program
This is a City of Corpus Christi program that is designed to promote, encourage and enhance the creation of jobs which expand the City tax base and economy through granting business incentives which assist in the retention, expansion and recruitment of locate or to expand in the Corpus Christi city limits.
Capital investment for a facility may be eligible for incentives by Agreement if it creates jobs for a primary employer that generates most of its revenues through sales and business dealings outside of the Corpus Christi region. Incentives may be granted for land or capital investment related to either new facilities or improvements to existing facilities for the purpose of modernization, expansion, or for capital investment necessary for the retention of an existing primary employer. There are job creation, health insurance and wage requirements. This incentive is paid in arrears after the investment has been made and jobs created.