Incentives
Build NB is the brand of the community’s "one-stop" shop effort that includes the City via their New Braunfels Industrial Development Corporation (NBIDC), The Chamber and Economic Development Foundation. The NBIDC issues loans and grants funded by the Type B tax. The revenues from the Type B tax can be used to fund a wide variety of projects including land, buildings, equipment, facilities expenditures and improvements related to projects defined in Section 2 of the Act or found by
the NBIDC to be required or suitable for use for other projects.
Each incentive program is carefully tailored for a company’s needs and based on the number of jobs, amount of wages above the average county or industry wage, and capital investment to the community. The following economic programs are offered to assist interested business and industries in their expansion or relocation:
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Economic Development Incentives such as grants and loans
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Reinvestment Zone Designation (TIF/TIRZ)
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Freeport Exemption
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School Property Tax Relief
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Industrial Development Bond Financing
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Utilities Impact Fee Waiver
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State-sponsored programs
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Tax Abatements
Funding for the types of qualified projects include:
Business Development:
Direct loans, guarantees, interest subsidies, grants, relocation and moving expenses, subsidized land & building costs, equipment purchases, GAP financing.
Facility Development:
Building construction, existing building expansion and upgrades, industrial land development.
Infrastructure Development:
Utility extensions to industry, utility development to key industrial areas, infrastructure upgrade, rail spurs for industry.
Workforce Development:
Job training costs, equipment for training programs, coordinate with Local School Districts (ISDs), Supplement Skills Development Fund grants, technical/vocational center
.
CHAPTER 380/381 DEVELOPMENT AGREEMENTS
The City of New Braunfels and Comal County will consider economic development incentives in accordance with Chapter 380/381 of the Texas Local Government Code. Grants and loans can be provided to eligible prospects by the City Council and Commissioners Court are determined on a case-by-case basis. As stated in Chapter 380/381 the economic development agreements must promote development and diversification of the economy of the state, elimination of unemployment or underemployment in the state, and development
and expansion of commerce in the state.
TAX INCREMENT FINANCING/REINVESTMENT ZONE (TIF/TIRZ)
A TIRZ can also be referred to as tax increment financing (TIF). New Braunfels has two established special districts in the city limits that cover Town Center at Creekside development and Westpointe Village . For Creekside, The City of New Braunfels and Comal County each participate to pay back $26 million in infrastructure improvements by the developer (New Quest). Every TIRZ is created to meet the unique individual needs of the development.
FREEPORT EXEMPTION
New Braunfels has "Triple Freeport Exemption" status via the City (New Braunfels), County (Comal) and local school district (Comal ISD) – which exempts taxation on various types of goods that are detained in Texas for a short period of time (no less than 175 days). The exemption covers good, wares, merchandise, ores and certain aircraft and aircraft parts, but does not include oil, natural gas or petroleum products. More information can be found at the Comal Appraisal District or download the form
50-113 from the Texas State Comptroller’s Office.
INDUSTRIAL DEVELOPMENT BOND FINANCING
Governed by the Texas Development Corporation Act of 1979, political subdivisions are authorized to create non-profit lending corporations to provide tax exempt financing for commercial, industrial and manufacturing projects.
The Comal County Industrial Development Authority (CCIDA) acts as issuer for tax-exempt industrial revenue bonds. A number of projects have been approved and bonds sold to finance projects in New Braunfels.
UTILITIES IMPACT FEE WAIVER POLICY
Is available to manufacturers and service industries which own qualifying real and personal property and are willing to execute a contract with New Braunfels Utilities for the waiver of impact fees designed to promote long-term significant positive economic impact to the community.
A manufacturer or service industry requesting a waiver must apply for water or sewer service and agree to expend a designated sum of money or provide a certain number of jobs according to the scoring formula in use by the City of New Braunfels and Comal County for property tax abatement.
SCHOOL PROPERTY TAX RELIEF
In 2001 during the 77th Legislative session House Bill 1200 provided relief from school property taxes for large capital investments. The law applies only to a corporation or limited liability company that is subject to payment of state franchise taxes. In addition, the company must create at least twenty-five new permanent jobs, pay at least 80% of a group health benefit plan for its employees and pay at least 110% of the county average weekly wage.
TEXAS ECONOMIC DEVELOPMENT BANK
The Texas Economic Development Bank was established to provide flexible funding and oversight of several finance and tax incentive programs. The incentive programs target three key audiences which include Texas businesses, communities and lending institutions.
The Economic Development Bank programs include Finance Programs, Enterprise Programs and Small Business Assistance. The Bank’s effectiveness is measured by the number of jobs created and retained and the total amount of non state funds leveraged as a result of the bank’s efforts. The Bank offers a variety of financial incentives to help communities and businesses in this state compete and succeed in the global marketplace. The Bank also helps communities get financing to fund their economic development
efforts.Incentives include:
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Make loans to near-bankable businesses in the lender’s community
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Make low-interest loans to qualifying businesses
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Provide bond-based long-term debt financing for capital investment in public entities, in large commercial and industrial projects, and for other economic development purposes
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Act as a link between businesses searching for investment capital and potential investors
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Inform institutional lenders of economic development plans and strategies for each region of this state and encourage institutional lenders to support those plans in their marketing and investment strategies
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Offer communities a one-stop source of financing for their economic development efforts
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Provide communities with technical assistance in the development of their incentive programs to attract and retain businesses and in the design of incentive packages for specific proposals
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Provide expanding businesses, or businesses relocating to this state, with a single source of information concerning financial incentives offered state to those businesses.
Financial Resources:
The State of Texas is able to offer many competitive incentive programs to help establish and expand businesses across the state. A more in depth breakdown of the programs is listed below.
DEFENSE ECONOMIC READJUSTMENT ZONE
PROGRAM
The (DERZ) was established as a tool for business recruitment and job creation in adversely impacted defense dependent communities. It is designed to provide assistance to Texas communities, businesses and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction of federal defense contracting expenditures.
TEXAS EMERGING TECHNOLOGY FUND (ETF)
The ETF created by the Texas Legislature at the urging of Governor Rick Perry, provides Texas with an un-paralleled advantage by expediting the development and commercialization of new technologies, and by recruiting the best research talent in the world. Matching and commercialization funds coupled with additional federal and outside investments mean new technology is emerging in Texas.
TEXAS ENTERPRISE FUND
The fund can be used for a variety of economic development projects including infrastructure and community development, job training programs and business incentives. To be eligible for TEF support, a project must demonstrate a significant return on the state’s investment and strong local support. The review process will consider a variety of factors, including job creation and wages, capital investment, financial strength of the applicant, applicant’s business history, analysis of the relevant
business sector, and public and private sector financial support. Before funds can be awarded, the governor, lieutenant governor and speaker must unanimously agree to support the use of the TEF for each specific project.
TEXAS ENTERPRISE ZONE PROGRAM
The purpose of the Texas Enterprise Zone Program is to encourage job creation and capital investment in areas of economic distress by providing communities with an economic development tool through which they can offer state and local incentives and program priority to new or expanding business located in these designated areas. If a company locates in a New Braunfels Enterprise Zone, a company can also qualify for the following incentives:
SALES TAX REFUND: A company could qualify for up to $2,500+ per job in state sales tax refunds for qualified equipment purchases & building construction. Both local and state sales tax would be utilized in the
calculations.
STATE FRANCHISE TAX DEDUCTION: As an Enterprise project in New Braunfels, your company could be eligible to deduct from its taxable capital 50% of its capital investment. The deduction may be taken on each franchise tax report based on your fiscal year.
After apportionment, deductions from both capital and earned surplus are allowed for enterprise zone investments. The state tax rate on capital assets is $2.50 per $1,000 of taxable capital and the earned surplus tax rate is 4.5%.Specifically, enterprise zone projects are eligible for a deduction from taxable capital that equals up to 50% of the project’s capital investment in the enterprise zone. The allowable deduction from taxable earned surplus is 5% of the qualified investment.
TEXAS LEVERAGE FUND
The Texas Leverage Fund (TLF) is an "economic development bank" offering an added source of financing to communities that have passed the economic development sales tax. This program allows the community to make loans to local businesses for expansion or to recruit new industries.
TEXAS LINKED DEPOSIT PROGRAM
The State of Texas Linked Deposit Program was established to encourage lending to historically underutilized businesses, child-care providers, non-profit corporations, and/or small businesses located in an Enterprise Zone by providing lenders and borrowers a lower cost of capital.
TEXAS PRODUCT/BUSINESS FUND
The State of Texas Product/Business Fund provides capital loans for product commercialization and businesses.
The fund provides asset backed 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.
SKILLS DEVELOPMENT FUND
The Skills Development Fund 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.
SMALL BUSINESS ADMINISTRATION 504 LOAN
PROGRAM
The Small Business Administration (SBA) was established in 1953 as an independent agency of the federal government to aid, counsel and assist small business concerns. The SBA works with Economic Development corporations and private-sector lenders to provide financing to small businesses through the 504 Loan Program. The 504 Loan Program provides growing businesses with long-term, fixed-rate financing for major fixed assets such as land and buildings. Typically a 504 project includes:
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A loan secured from a private sector lender with a senior lien covering up to 50 percent of the project cost
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A loan secured from a CDC (backed by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost
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A contribution from the borrower of at least 10 percent equity