Overview of the Most Commonly Used State and Local Incentives for Qualifying Projects

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Overview of the Most Commonly Used State and Local Incentives for Qualifying Projects For assistance on your project in Waller County, contact: Vince Yokom Executive Director Waller

2 Overview of the Most Commonly Used State and Local Incentives for Qualifying Projects For assistance on your project in Waller County, contact: Vince Yokom Executive Director Waller County Economic Development Partnership 519 9th St. Suite A Hempstead, TX Office x23 vyokom@wallercounty.org Waller County Incentives Overview Page 1 of 6

Waller County Tax Incentives IMPORTANT: Do not start construction before applying for abatements! Applying for county properly tax abatements is a fast and friendly process.

The application is the official record of the project that is submitted to commissioners court for approval.

Complete Economic Impact Analysis Apply for Incentives Public Notice & Commissioners Approval Main considerations for a successful analysis: 1.

3 Waller County Tax Incentives IMPORTANT: Do not start construction before applying for abatements! Applying for county properly tax abatements is a fast and friendly process. It starts with the prospect completing an economic impact analysis. Then, if the analysis is favorable, the project moves to completing an application for tax abatements. The application is the official record of the project that is submitted to commissioners court for approval. The entire process can be completed within days, depending on when the application is filed for public hearing requirements and posting. Complete Economic Impact Analysis Apply for Incentives Public Notice & Commissioners Approval Main considerations for a successful analysis: 1. Top priority is given to the quality (and quantity) of jobs as measured in terms of compensation as compared to the industry current averages. 2. Overall environmental impact. 3. Quality and fit of the project. 4. Taxable value created by the new investment. Abatements are extended to qualifying companies based on the results of the economic impact analysis. It s important to note that not all property will qualify for an abatement. Qualifying property is outlined in the County incentives policy. Chapter 381 Development Agreements In addition to the wide variety of designated programs, the State of Texas allows counties to create their own development agreements. Usually referred to as a Chapter 381, this tool allows counties to negotiate directly with developers and businesses when necessary. These agreements can take a wide variety of forms and are negotiated based on the specific requirements and project specifications. Industrial Development Corporation A key component for financing projects, the Waller County IDC s mission is to qualify prospects looking to obtain bond financing for their project. Each project is submitted to the board for review and undergoes an application process. If successful, the applicant can receive substantial investment capital. This program is especially suited for small manufacturing companies. Waller County Incentives Overview Page 2 of 6

4 Freeport tax exemption All three school districts offer Freeport tax exemptions for qualifying inventories. In Texas, the Freeport exemption is an exemption on ad velorum taxes for inventory shipping out of the state within 175 days. If you think you may qualify, contact the Waller County Appraisal District for more information ( ). State Incentive Programs 1 Enterprise Zone Waller County meets the requirements to be considered an Enterprise Zone. This designation allows us to apply for state assistance for projects creating new jobs. Participation Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September and December. Benefits to Participation 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 the capital investment and jobs created at the qualified business site. Level of Capital Investment Maximum number of jobs allocated Maximum potential refund Maximum refund per job allocated $40,000 to $399, $25,000 $2,500 $400,000 to $999, $62,500 $2,500 $1,000,000 to $4,999, $312,500 $2,500 $5,000,000 to $149,999, $1,250,000 $2,500 Double Jumbo Project $150,000,000 to $249,999,999 Triple Jumbo Project $250,000,000 or more 500 $2,500,000 $5, $3,750,000 $7,500 In addition, local communities must offer incentives to participants under the enterprise zone program, such as tax abatement, tax increment financing and one-stop permitting. 1 Provided by the state web site and subject to change Waller County Incentives Overview Page 3 of 6

Participation Requirements Communities may nominate projects, for a designation period of not less than one year up to five years, non-inclusive of a 90-day window prior to the application deadline.

5 Participation Requirements Communities may nominate projects, for a designation period of not less than one year 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. o If located within a zone, the company commits that at least 25% of their new employees will meet economically disadvantaged or enterprise zone residence requirements. o 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. Under limited statutory provisions, an enterprise project designation may be granted for job retention. Enterprise Fund This fund is administered through the Governor s Office of Economic Development and Tourism. This is a discretionary fund to encourage quality projects to locate in Texas when we are competing with another state. Once a project has been qualified through a local EDO, the community can apply for funds to help close the deal if needed. Success is based on the quality and quantity of new jobs created in Texas. Visit for more details. Texas Capital Fund One of the advantages of being a rural county is that we have access to a variety of grants. The Texas Capital Fund (TCF) program is administered by the Texas Department of Agriculture through an interagency agreement with the Office of Rural Community Affairs (ORCA). The TCF program encourages business development, retention, or expansion by providing funds to eligible applicants. Funds will be awarded for the express purpose of assisting in the creation of new permanent jobs or retention of existing permanent jobs, primarily for low and moderate income (LMI) persons. In order to comply with the national goal of expanding economic opportunities for LMI persons, a minimum of 51 percent or more of all the jobs created or retained by the business must benefit persons who qualify as LMI. These funds are a part of the U. S. Department of Housing and Urban Development's (HUD) Community Development Block Grant (CDBG) program and is known as the Texas Community Development Program (TCDP) in our state. The program is only available to non-entitlement city or county governments. Nonentitlement cities/counties do not receive direct funding from HUD and typically include cities with a population of less than 50,000 and counties of less than 200,000. There are over 1,200 eligible cities and counties in the state. Awarded cities and counties receive funds to make public infrastructure and/or real estate improvements to support a specific business that is expanding or beginning operations in the applicant's jurisdiction and are contingent upon the business making a capital investment and creating/retaining jobs for Texans. Waller County Incentives Overview Page 4 of 6

6 Chapter 313 School District Value Limitation 2 This state program is designed to help manufacturing companies making large investments in Texas communities. Waller County School District Economic Development Categories Under Chapter 313 Tax Code School District Name ISD # Subject to Subchapter C Category # Minimum Limitation Amount Minimum Qualified Investment Amount Hempstead Y 3 $20 Million $10 Million Royal Y 1 $30 Million $30 million Waller Y 2 $25 Million $20 Million Katy Y 1 $30 Million $30 Million For up to date information, visit Wage Targets and Information: The designation of a school district as subject to Subchapter C is currently based on county demographic characteristics and/or whether the school district is in a county designated as a strategic investment area (SIA). Waller County qualifies as an SIA. Tax Code Chapter 313 provides that the required number of qualifying jobs, amount of investment and the minimum amount of the value limitation vary according to whether the school district is considered rural (subject to Subchapter C) or non-rural (subject to Subchapter B), and according to the amount of taxable property value in the school district. Districts become subject to Subchapter C either because of their demographic characteristics (having territory in a county with population under 50,000, and a county in which, from 2000 to 2010 according to the federal decennial census, the population remained the same, decreased or increased, but at a rate of not more than the average rate of increase in the state during that period), or because the school district has territory in a county that qualifies as a Strategic Investment Area (SIA). After Jan. 1, 2014, applicants are required to select one of two wage targets for qualifying jobs. See Tax Code (5)(A) and (5)(B). The wage targets are: percent of the county average manufacturing wage for the last previous four quarters available at the time of application, or percent of the average manufacturing wage for the COG region for the previous four quarters available at the time of application. If a district is subject to Subchapter C because of its demographic characteristics, Section (b) still requires an applicant in that district to meet the regional wage standard for manufacturing wages. If a district is subject to Subchapter C only because the district has territory in an SIA, then the applicant may choose between the two manufacturing-related wage targets. 2 Information taken from Texas State Comptroller s Office web site and is subject to change. Waller County Incentives Overview Page 5 of 6

Wage information may be obtained from the Texas Workforce Commission. The Texas Workforce Commission has posted the average regional manufacturing wage levels at http://www.tracer2.

7 Wage information may be obtained from the Texas Workforce Commission. The Texas Workforce Commission has posted the average regional manufacturing wage levels at The county average manufacturing and all jobs (all industries) wage figures can be found at the Workforce Commission's "Tracer" website at Foreign Trade Zones In short, the FTZ allows companies to reduce their taxes on imports and exports while maintaining the local community's ability to collect taxes through agreements with the company. By establishing local sub-zones, communities can use the FTZ program to attract companies that may otherwise locate elsewhere. It is a competitive advantage for those companies needing this support. Waller County will consider establishing FTZs for the right opportunity. This is a federal program under the authority of the US Customs and Border Protection agency. We work as part of the service area for the Port of Houston Authority in FTZ #84. Contact our office for more details and to discuss this program in more detail. Disclaimer Every effort was made to ensure that the information presented is up to date and accurate. Since much of the information is provided by others, it doesn t represent a commitment by WCEDP, WCEDP partners or board of directors. No commitments are made until a project has been defined and determined to be viable through official negotiations with federal, state and local officials. Waller County Incentives Overview Page 6 of 6

Economic Incentives. City of Conroe Schedule years: 100%, 75%, 50%, 25% Minimum FTEs Montgomery Co. Minimum FTEs City of Conroe

Economic Incentives. City of Conroe Schedule years: 100%, 75%, 50%, 25% Minimum FTEs Montgomery Co. Minimum FTEs City of Conroe Economic Incentives There are a range of economic incentives available to qualifying new, relocating or expanding companies in the Conroe area. GCEDC Staff will work with you to develop an incentive proposal