Texas Incentives Boost Jobs, Investment
Texas offers a number of advantages that make it attractive for new investment and job creation. The state has one of the lowest tax burdens in the United States, including no personal income tax, no state tax on property used for pollution control, no state tax on goods in transit and no state tax on machinery and equipment utilized in manufacturing.
The state also has invested in business expansion and job creation through a suite of incentive programs. Among them:
The Texas Emerging Technology Fund (TETF): The TETF was created by the Texas Legislature in 2005 at the urging of Gov. Rick Perry to promote research, development and commercialization of emerging technologies. TETF grants are awarded in the following three areas:
- Research Superiority Acquisition: Funds for Texas higher education institutions to recruit the best research talent in the world.
- Commercialization Awards: Funds to help companies take ideas from concept to development to ready for the marketplace.
- Matching Awards: Funds to create public-private partnerships that leverage the unique strengths of universities, federal government grant programs, and industry.
Priority is given to emerging technology projects that will enhance Texas’ global competitiveness that are collaborative and leverage both critical expertise and financial resources. The TETF has allocated more than $154 million in funds to 111 early stage companies, and $161 million in grant matching and research superiority funds to Texas universities.
Texas Enterprise Fund (TEF): The TEF is the largest “deal-closing” fund of its kind in the nation, and is used only as a final incentive tool where a single Texas site is competing with another viable out-of-state option. Additionally, the TEF will only be considered to help close a deal that already has significant local support behind it from a prospective Texas community. Projects that are considered for the TEF must demonstrate a significant rate of return on the public dollars being invested in the project and meet several criteria to be considered for an award, including:
- Competition with another state for the project must exist and the business must not have already announced a location decision.
- Projected new job creation must be significant and the new positions must be high-paying jobs – above the average wage of the county where the project would be located.
- Capital investment by the company must be significant.
- The project must have community involvement from the city, county and/or school district, primarily in the form of local economic incentive offers.
- The applicant’s business sector must be an advanced industry that could potentially locate in another state or country.
Through April 2011, the TEF has invested more than $434.2 million and closed the deal on projects generating 59,025 new jobs and more than $14.7 billion in capital investment in the state.
The Texas Product/Business Fund: 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. Texas companies or out-of-state/international companies doing business in the state are eligible to apply. Applicants can submit a free brief pre-assessment in order to check eligibility.
Skills Development Fund: The 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.