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I I I e e Economic Development Incentives Policy June 2006 Page 7 C. San Marcos Municipal Airport: A developer that invests $500,000 or more in improvements to property leased from the City at the San Marcos Municipal Airport will be eligible for a credit of up to 5% of the total investment for site preparation expenses against fixed rental payments due under the lease. I 5. Financing Incentives A. Revolving Loan Funds: The City has available a limited amount of funds to commit to businesses. Applicants should check with the City Community Development Block Grant staff for funding availability. B. Tax Increment Financing (TIF): Tax increment financing is a tax reinvestment tool that allows local governments to fund infrastructure improvements within a defined area. TIFs work by allowing taxing entities to repay the costs of improvements to a designated area with the future tax revenues generated by increased property values. TIFs can be created on a case-by-case basis by the City Council. C. Freeport Exemption: Businesses involved in the export of tangible property such as goods, wares, and merchandise may be eligible for the Freeport Exemption. This incentive is designed to exempt some or a company's entire inventory from property taxes, To be eligible, property must be assembled, stored, manufactured or fabricated locally and then exported out of the state within 175 days after the property was acquired or imported into the state. This is an exemption available to any company that conforms to qualifications set out by state law. Again, the City Council will consider granting a Freeport Exemption on a case-by-case basis. D. Chapter 380 Grants and Loans: The City Council can provide grants or loans to eligible prospects on a case-by-case basis to promote local economic development and to stimulate business and commercial activity in the City, in accordance with Chapter 380 of the Texas Local Government Code. The grants or loans can be used to facilitate the acquisition or improvement of real property, the acquisition of equipment or facilities, or other purposes directly related to economic development. I 6. Incentives Requirinq State Approval The City of San Marcos can assist businesses with the application process for the following programs. A. Enterprise Projects: The City of San Marcos will facilitate the designation of an Enterprise Zone and work with prospects on their State application to be recognized as an Enterprise Project. In order to qualify for an Enterprise Zone, a project must locate in a Census Tract that has a low and moderate income population of 20% or more. All of the City of San Marcos' Census Tracts qualify to be designated as an Enterprise Zone. Being designated by the State as an Enterprise Project provides valuable incentives including refunds of sales and use taxes, and franchise tax credits. Additionally the State Comptroller can refund sales tax on natural gas and electricity B. Industrial Revenue Bonds: The State of Texas Industrial Revenue Bond Program is designed to provide tax-exempt financing of land and depreciable property for eligible industrial or manufacturing projects. The Development Corporation Act allows cities, counties, and conservation/reclamation districts to form non-profit industrial development corporations or authorities on their behalf. The purpose is to issue taxable and tax-exempt bonds for eligible projects in their jurisdictions. The City of San Marcos Industrial Development Corporation acts as a conduit through which funds are channeled. Generally, all debt service on the bonds is paid by the business under the terms of a lease, sale, or loan agreement. As such, it does not constitute a debt or obligation of the City, the Industrial Development Corporation, or the State of Texas. If Revenue bonds would help a prospect, the City stands ready to assist with selecting bond counsel and working to issue the bonds. C. Job Training Funds: The City of San Marcos will assist companies locating or expanding in San Marcos with securing State-provided job training assistance The State of Texas, through the Governor's Office, offers the Enterprise Fund to assist with training for newly-created jobs. Acting through the Texas Workforce Commission, the State offers the Skills Development Fund to finance customized job training for local businesses that is provided by public community and technical colleges. This fund offers. on average, up to $1,000 for each job needing customized job training I