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July 12, 2003
FOR IMMEDIATE RELEASE
New Retention Incentives Reflect Texas Economy.
At the close of the 78th Texas Legislative Session, Governor Rick Perry
signed into law Senate Bill 275, again expanding and easing the acquisition
of incentives offered by the Texas Enterprise Zone Program. The changes
create a new multi-tiered investment that rewards larger investment with
double or triple tax incentives for Texas businesses for investing and keeping
jobs in Texas.
At the request of Senator Frank Madla, Karin Richmond, Business Incentives
Practice Leader for Ryan & Company, developed portions of the new legislation
for the Texas Enterprise Zone Program. The new legislative highlights include:
- Qualification for retention project designation has been eased to
include any combination of product line increases and/or decreases or
retooling that results in an overall increase in production, a decrease
in unit cost or - now - holding production levels at a steady rate;
- Creation of five incentive levels ranging from $25,000 and a minimum
of 10 created or retained jobs to $3,750,000 with a minimum of 500 jobs,
based on qualifying investment and job creation and/or retention;
- Businesses are eligible for project designation regardless of whether
the business site is in an Enterprise Zone;
- As of September 1, 2003 approved businesses may receive sales tax
refunds on purchases of both consumables and taxable services; and
- Compliance process has been streamlined to allow faster approval of
refunds.
This legislation takes effect September 1, 2003 for businesses applying
for designation as Enterprise Zone Projects by the Texas Office of Economic
Development. Only 85 businesses will be eligible to receive these benefits
during the next two years.
Proposed Enterprise
Project Investment |
Maximum Jobs
for Credit |
Refund Dollars
per Job |
Maximum
Refund |
| $40,000-$399,999 |
10 |
$2,500 |
$25,000 |
| $400,000-$999,999 |
25 |
$2,500 |
$62,500 |
| $1,000,000-$4,999,999 |
125 |
$2,500 |
$312,500 |
| $5,000,000-$149,999,999 |
500 |
$2,500 |
$1,250,000 |
| $150,000,000-$249,999,999 |
500 |
$5,000 |
$2,500,000 |
| $250,000,000+ |
500 |
$7,500 |
$3,750,000 |
For more information on this subject, please view Ms. Richmond's presentation,
" Retention,
Retooling, and Rethinking Incentives in a Jobless Recovery". Ms. Richmond's
presentation was delivered as part of the proceedings at the International
Economic Development Council's Annual Conference on September 16, 2003 in
Cincinnati, Ohio. Also available is Ms. Richmond's presentation titled,
" Retention,
Retooling, and Rethinking Incentives," originally presented at International
Economic Development Council's Globalliances Congress on June 6, 2003.
If you have any questions regarding this information, please contact Mr. G. Brint Ryan,
Managing Principal of Ryan & Company, at 972.934.0022.
Mr. Ryan can also be reached via e-mail.
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