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I I I Economic Development Incentives Policy February, 2005 Page 7 Main Street program has a small fa<;:ade improvement grant that can be used for such things as signage or new canopies. Foreign Trade Zone Foreign trade zones (FTZs) are sites in or near a U S Customs port of entry where foreign and domestic merchandise is generally considered to be in international trade. Goods can be brought into a 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. Financina Incentives Revolving Loan Funds The City of San Marcos has available a limited amount of funds to commit to businesses. Check with the Community Development Block Grant staff for funding availability Tax Increment Financing (TIF) Tax increment financing is a tax reinvestment tool that allows local governments to publicly fund needed structural improvements and enhanced infrastructure 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 increasing property values. TIFs can be created on a case-by-case basis by the San Marcos City Council 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 (Standard perpetual exemption available to any company that conforms to qualifications set out by state law) Again, the San Marcos City Council will consider granting a Freeport Exemption on a case-by-case basis. Incentives Reauirina State Approval The City of San Marcos can assist businesses with the application process for the following programs: 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 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 Industrial Development Corporation acts as a conduit through which all monies are channeled Generally, all debt services on the bonds are 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 governmental unit, 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 council and working to float the bond 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