 |
Incentives
Conditions for Local Incentives
The purpose of the Silsbee Economic Development Corporation (SEDC) is to promote, encourage, and enhance the creation of primary employer jobs and capital investment in Silsbee, Texas. SEDC can provide grants to businesses that meet the corporation’s goals and objectives. Any proposal to SEDC is contingent upon the company qualifying for assistance under SEDC’s guidelines (create a link to policies and procedures) and may be subject to Silsbee City Council approval. It is understood that the company must provide SEDC all of the necessary information to make this determination.
State Incentives
Texas Enterprise Zone
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 local communities.
Local communities must nominate a company as an Enterprise Project to be eligible to participate in the Enterprise Zone Program and the state must in turn approve projects.
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 $399,999 |
10 |
$25,000 |
$2,500 |
$400,000 to $999,999 |
25 |
$62,500 |
$2,500 |
$1,000,000 to $4,999,999 |
125 |
$312,500 |
$2,500 |
$5,000,000 to $149,999,999 |
500 |
$1,250,000 |
$2,500 |
Double Jumbo Project
$150,000,000 to $249,999,999 |
500 |
$2,500,000 |
$5,000 |
Triple Jumbo Project
$250,000,000 or more |
500 |
$3,750,000 |
$7,500 |
Franchise Tax Credits for Economic Development
The Legislature created three franchise tax credits for economic development. Eligible corporations may take advantage of these credits for certain research and development expenses and payments incurred, for qualified capital investments or expenditures made, or for certain new jobs created in Texas on or after January 1, 2000. Since Hardin County is in a Strategic Investment Area, corporations operating in Silsbee may qualify for special benefits. However, the sum of the three credits cannot exceed 100 percent of a corporation's franchise tax liability, after any other applicable tax credits
Summary of Economic Development Credits
Credit |
Research and Development |
Jobs Creation |
Capital Investment |
Amount of credit |
4 percent of qualified expenses to be taken on a report due before January 1, 2002; Changes to 5 percent of qualified expenses to be taken on a report due after January 1, 2002 |
25 percent of wages paid for new qualifying jobs created in strategic investment areas; credit must be claimed in equal installments over 5 years |
7.5 percent of qualified investment made in strategic investment areas; credit must be claimed in equal installments over 5 years |
Expenditures to which credit applies |
Excess of qualified research expenses in Texas over base year, plus basic research payments in Texas; Expenses must be incurred on or after January 1, 2000 |
Salary and wages paid for new qualifying jobs in central administrative offices, distribution, data processing, manufacturing, research and development, or warehousing; Applies to new jobs created on or after January 1, 2000 |
Investments in depreciable tangible personal property in central administrative offices, distribution, data processing, manufacturing, research and development, or warehousing; Applies to qualified investments made on or after January 1, 2000 |
Areas of state where credit may be established |
Statewide, but expenditures in strategic investment areas qualify for bonus |
Strategic investment areas (special provision for agricultural processors) |
Strategic investment areas (special provision for agricultural processors) |
Limitations |
Credit may not exceed 25 percent of franchise tax due before credits for franchise tax reports due before January 1, 2002; Credits may not exceed 50 percent of tax due for franchise tax reports due after January 1, 2002 |
Credit may not exceed 50 percent of franchise tax due before credits |
Credit may not exceed 50 percent of franchise tax due before credits |
Carryforward |
20 years |
5 years |
5 years |
Expiration |
December 31, 2009 (accumulated credits may still carryforward) |
December 31, 2009 (accumulated credits may still carryforward) |
December 31, 2009 (accumulated credits may still carryforward) |
Other Provisions |
Credit may not be combined with job creation credit |
At least ten new full-time jobs must be created; must pay 110 percent of county average weekly wage and include health insurance; cannot be combined with R&D credit |
A minimum investment of $500,000 is required; jobs at location of investment must pay 110 percent of county average weekly wage and include health insurance |
Natural Gas and Electricity Sales and Use Tax Exemption
Companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property. The company must complete a predominate use study showing that at least 50% of the electricity or natural gas consumed by the business directly causes a physical change to a product.
Manufacturing Machinery and Equipment Sales and Use Tax Exemption
Leased or purchased machinery, equipment, replacement parts, and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating, or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax. Texas businesses are exempt from paying state sales and use tax on labor for constructing new facilities. Machinery exclusively used in processing agricultural products by the original producer is also exempt.
Texas Enterprise Fund
The 78th Legislature created the Texas Enterprise Fund, giving the governor the ability to respond quickly to opportunities to bring companies and jobs to Texas. The fund is intended to attract high-impact facilities that have the opportunity to provide high returns for taxpayer investment. The company must select a single site in Texas which is competing with a site or sites in another state or states. This is a deal-closing incentive. The Toyota assembly plant in San Antonio and a state-of-the-art Texas Instruments semiconductor wafer fab project in Richardson are both examples of projects eligible to benefit from the Texas Enterprise Fund.
Emerging Technology Program
This program is designed to help Texas create jobs and grow the economy over the long-term by expediting the development and commercialization of new technologies and attracting and creating jobs in technology fields.
The Texas Capital Fund
Designed to promote growth in non-entitlement areas, the Texas Capital Fund can be used for businesses creating new full-time jobs, a majority of which benefit low to moderate-income persons. This program requires an application and competitive rating process which sometimes delays the funding process. If the timing of the project makes it possible, the TCF programs available to Silsbee are:
TCF Infrastructure Grant Program: Funds may be used for construction and/or improvements of water or wastewater facilities, public road construction, natural gas line services, rail spurs, and electric power services. Minimum and maximum awards are $50,000 and $750,000 and may not exceed 50% of the total project cost.
TCF Real Estate Development Program: Funds may be used to acquire, construct, or rehabilitate real estate to support a for-profit or a non-profit entity willing to commit to creating or retaining jobs primarily for low or moderate income persons. Minimum and maximum awards are $50,000 and $750,000 and may not exceed 50% of the total project cost.
Small Business Administration 504 Loan Program
The SBA 504 is a direct-lending program providing long-term financing for fixed assets at a fixed rate of interest at or below New York prime rate. Designed to create and retain full-time jobs and to help businesses start-up or expand, the loan usually includes a senior lien from a private-sector lender covering 50% of the project cost and at least 10% equity injection. Generally the business must create or retain one job for every $35,000 provided by the SBA. The maximum loan is $1,000,000 for job creation.
Small Business Administration 7(a) Loan Guaranty Program
The SBA 7(a) program provides guarantees for small businesses unable to secure financing on reasonable terms through normal lending channels. The SBA will guarantee up to 75% of a private-sector loan up to a maximum of $750,000. The rate and term of the loan are set by the private-sector lender.
Small Business Loan Fund
The Small Business Loan Fund was created to provide a tool for rural communities to assist their small businesses access capital by providing awards to eligible cities and counties for loans to businesses with 100 or fewer employees.
The goal of the Program, as stated in the Housing and Community Development Act of 1974 (as amended), is "the development of viable communities ... by expanding economic opportunities, principally for persons of low and moderate income."
Awards range between $50,000 - $100,000 and businesses must commit to creating or retaining at least one job for every $25,000 borrowed primarily for low to moderate income persons.
Microenterprise Loan Fund
The Microenterprise Loan Program offers monies for the development of microenterprises and small businesses at the local level. A "microenterprise" is a commercial enterprise that has five (5) or fewer employees, one (1) or more of whom owns the enterprise.
Microenterprises receiving loan assistance must commit to creating or retaining jobs that will not exceed a maximum cost of $25,000 per job. The jobs created or retained by the microenterprises must principally benefit low- and moderate-income persons.
Economic Development Administration
This program provides grants funded on a competitive basis for public water and wastewater facilities, access roads, rail spurs, or projects consistent with an overall economic development plan that serves industry and commerce. The application and approval process requires additional time.
Texas Capital Access Program
The program is designed to increase the availability of financing for businesses and non-profit organizations that face barriers in accessing capital. Eligible borrowers can be any small business with less than 500 employees or a non-profit corporation. The proceeds may be used for working capital or the purchase, construction, or lease of capital assets including land, buildings, and equipment.
Linked Deposit Program
This program encourages lending to qualified businesses which are historically underutilized, child care providers, non-profit corporations and small businesses located in an enterprise zone. It offers lenders and borrowers a lower cost of capital. Loan amounts range from $10,000 to $250,000. Proceeds may be used for working capital, purchase, construction or lease of capital assets, including land, buildings and equipment.
Agricultural Business Programs
The Texas Department of Agriculture offers a variety of financing and guarantee programs to assist eligible businesses or individuals involved in agricultural-related economic development projects. These include: Texas Agricultural Finance Authority Loan Guaranty Program, Direct Loan Program, Loan Participation Program, Young Farmer Program, Farm & Ranch Finance Program, and Linked Deposit Program.
Job Training Incentives
Skills Development Fund
This fund assists community and technical colleges in financing customized job training for local businesses. Average training costs are $750 to $1,000 per trainee. The fund will provide training for specific skills for workers who will be hired by the business. A business that forms partnerships with local community colleges and technical schools or the higher education extension agency may apply to the Texas Workforce Commission for funding.
Economic Development Sales Tax Incentives
The Silsbee Economic Development Corporation funds can be applied to costs associated with training needs according to the terms of a negotiated economic development agreement between SEDC and the company and according to the requirements in state law.
Local Workforce Development Board
Local boards oversee training funds for specific regions and have some programs available for training certain qualified populations.
|
 |
