Overview of the Most Commonly Used · Overview of the Most Commonly Used ... IMPORTANT: Do not start construction before applying for incentives! Applying for county properly tax

OverviewoftheMostCommonlyUsedStateandLocalIncentivesforQualifyingProjects

For assistance on your project in

Waller County, contact:

Vince Yokom CEcD, EDFP

Executive Director

Waller County Economic

Development Partnership 519 9th St. Suite A Hempstead, TX 77445 Office 979-921-9059 x23 [email protected] www.wallercounty.org

Waller County Incentives Overview Page This information is presented as a courtesy and may change without notice. It does not represent a commitment by Waller County or the WCEDP.

2

Waller County Tax Incentives IMPORTANT: Do not start construction before applying for incentives! 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 30-45 days, depending on when the application is filed for public hearing

requirements and posting.

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.


3

Freeport tax exemption

Waller, Hempstead, and Royal 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 (979-921-0060). To learn more about

this incentive, visit the Texas Comptroller’s website at

https://comptroller.texas.gov/economy/local/transit-exemptions/.

State Incentive Programs

Enterprise Zone

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. For the latest information visit

https://gov.texas.gov/business/page/texas-enterprise-zone-program.

*Double and Triple Jumbo Projects may not count retained jobs for benefit. A Triple Jumbo Project must create at least 500 jobs.


4

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.

Texas 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 https://gov.texas.gov/business/page/texas-enterprise-fund for more details.


5

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. 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. Non-

entitlement 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.


6

Chapter 313 School District Value Limitation1 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 237-902 Y

3 $20 Million

$10 Million

Royal 237-905 Y

1 $30 Million

$30 million

Waller 237-904 Y

2

$30 Million

$30 Million

Katy 101-914 Y 1

$30 Million

$30 Million

For up to date information, visit

https://comptroller.texas.gov/economy/local/ch313/values.php

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.

1 Information taken from Texas State Comptroller’s Office web site and is subject to change.


7

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 313.021(5)(A) and 313.021(5)(B). The wage targets are:

1. 110 percent of the county average manufacturing wage for the last previous four

quarters available at the time of application, or

2. 110 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

313.051(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. Labor market information is available on the Texas Workforce Commission

website at https://www.twc.texas.gov/businesses/labor-market-information.

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 supporting 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.


8

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.

Documents

Overview of the Most Commonly Used · Overview of the Most Commonly Used ... IMPORTANT: Do not start construction before applying for incentives! Applying for county properly tax