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Economic Development Incentives Policy-June 2007 Page 5 zone without formal Customs entry or without incurring Customs duties or excise taxes unless and until they are imported into the United States. The purpose of the Zone is the creation of jobs realized from the cost savings from delayed or forgiven tariffs. The City of San Marcos currently has a FTZ located at the San Marcos Municipal Airport. D. 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. E. Historically Underutilized Business (HUB) Zone Empowerment Contracting Program: This program provides federal contracting assistance for qualified small businesses that are located in HUB zones, increase employment opportunities, stimulate capital investment in those geographic areas and empower communities through economic leveraging. This program will provide opportunities to contract with the City of San Marcos, Hays County, and Texas State University-San Marcos. Eligibility Criteria 1. The business must be registered as a small business per the U.S. Small Business Administration (SBA) standards. 2. The business must be owned and controlled by a U.S. citizen. 3. The principal place of business should be located in a HUB Zone. 4. At least 35% of the business' employees must reside in a HUB Zone. F. Property Tax Phase-In Program: The City of San Marcos offers property tax phase-ins for new or expanded commercial or industrial construction, as well as business personal property taxes associated with real property. City property tax phase-ins are granted through a contract approved by the City Council. After qualification, the City will assist applicants in seeking phase-in agreements with the other taxing authorities. Eligibility Criteria 1. Micro Business and Small Business Criteria a. Proposed development and/or redevelopment must create, maintain, or retain at least five (5) jobs. b. Twenty percent (20%) of the job salaries for the created, maintained, or retained five (5) positions must pay hourly employees over $17 per hour base rate at the straight time rate or pay salaried employees over $36,000 annually. c. Applicant can be an existing business and must provide financial statements and/or income tax returns. d. Applicants must have a business plan with appropriate projected financial statements. e. Capital investment by applicant must equal at least $250,000. f. Start-up businesses will be considered on case-by-case basis. 2. Medium and Large Business Criteria a. Proposed development and/or redevelopment must create, maintain, or retain at least ten (10) jobs. b. Twenty percent (20%) of the job salaries for the created, maintained, or retained ten (10) positions must pay hourly employees over $17 per hour base rate at the straight time rate or pay salaried employees over $36,000 annually. c. Temporary positions will not be considered as full-time positions for tax phase-in purposes. d. Applicant can be an existing business and must provide financial statements and/or income tax returns. e. Capital investment by the applicant must equal at least $1,000,000. f. Start-up businesses will be considered on case-by-case basis. Minimum Required Investment An applicant requesting a tax phase-in shall agree as a condition of any tax phase-in ultimately approved by the City Council to expend a certain minimum amount of funds on real or personal property improvements and to provide a certain number of jobs, as provided in the table below: