Financing Incentives

The following information is provided in order to give an accurate account of available Financing Incentives for the City of Kilgore.  Additional more detailed information is available by contacting the Kilgore Economic Development Corporation.

Texas Enterprise Fund
The 78th Legislature created the Texas Enterprise Fund, giving the governor the ability to respond quickly to opportunities to bring companies and jobs to Texas.  The fund is intended to attract high-impact facilities that have the opportunity to provide high returns for taxpayer investment.  The Toyota assembly plant in San Antonio and a state-of-the-art Texas Instruments semiconductor wafer fab project in Richardson are both examples of projects that are eligible to benefit from the Texas Enterprise Fund. 
 
Applications are received throughout the year and TEF awards are made several times annually. For a complete list of awardees, click here.

For more information on the Texas Enterprise Fund, call 512-936-0101 or click here.

Emerging Technology Program
This program is designed to help Texas create jobs and grow the economy over the long-term by expediting the development and commercialization of new technologies and attracting and creating jobs in technology fields.  
 
ETF grants are awarded in the following three areas:
  • Research Superiority Acquisition -- funds for Texas higher education institutions to recruit the best research talent in the world.
  • Commercialization Awards -- funds to help companies take ideas from concept to development to ready for the marketplace.
  • Matching Awards -- funds create public-private partnerships which leverage the unique strengths of universities, federal government grant programs, and industry.

The first step is to contact the Regional Center of Innovation and Commercialization (RCIC) in your area. Click here for more information. There are seven RCICs and one Texas Life Science Center to serve stakeholders throughout the state.

RCICs receive applications for ETF awards each calendar quarter from companies within their regions and help guide companies through the application process. For detailed information about applying for ETF grants, click here.
 

ED Sales Tax Incentives

The Kilgore Economic Development Corporation (KEDC) was created by the voters in 1990 to use the revenue generated by a ½ cent sales tax for economic development to encourage the creation and retention of jobs and capital investment in Kilgore. The KEDC Board of Directors works with interested parties for the use of these funds as an incentive to locate or expand in Kilgore.  The amount and type of the incentive depends upon the economic impact of the project and the specific needs of the company.  Incentive funds can be applied to costs associated with land or facility acquisition, facility construction, remodeling, infrastructure, training programs, etc., according to the terms of an economic development performance agreement between KEDC and the company. 

Texas Capital Fund

Designed to promote growth in non-entitlement areas, the Texas Capital Fund can be used for businesses creating new full-time jobs, a majority of which benefit low to moderate-income persons.  This program requires an application and competitive rating process which sometimes delays the funding process.  If the timing of the project makes it possible, the TCF programs available to Kilgore are:

TCF Infrastructure Grant Program

 Funds may be used for construction and/or improvements of water or wastewater facilities, public road construction, natural gas line services, rail spurs, and electric power services.  Minimum and maximum awards are $50,000 and $750,000 and may not exceed 50% of the total project cost.

TCF Real Estate Development Program

Funds may be used to acquire, construct, or rehabilitate real estate to support a for-profit or a non-profit entity willing to commit to creating or retaining jobs primarily for low or moderate income persons.  Minimum and maximum awards are $50,000 and $750,000 and may not exceed 50% of the total project cost.

Funds may be used for:

*       acquisition of land and/or buildings

*       construction of new buildings and site improvements

*       rehabilitation of buildings and site improvements

Terms 
The minimum award is $50,000 and the maximum is $1,000,000 inclusive of administration costs. Awards of more than $750,000 require a greater level of job creation/retention and matching funds, and are limited to two (2) per year.  The award may not exceed fifty percent (50%) of the total project cost. Required minimum equity injection of the total project cost by the business:

*       ten (10%), if operating for 3+ years

*       thirty-three percent (33%), if operating for less than 3 years

Applicant must not sell/transfer ownership for a minimum of five years.

The business must remit to the applicant a monthly lease payment equal to the award amount divided over a maximum 240 month period.

Applicant may elect to deposit lease payments in a revolving loan fund for use at the local level and receive one award per program year; or return payments to the state for use in a state revolving loan fund, which allows the applicant to be eligible for as many awards per program year as it has eligible projects.

The lease agreement with the business must be for at least three years or until the contract between the applicant and the Texas Department of Agriculture is satisfactorily closed.

Collateral
An applicant may use the real estate as collateral to secure additional funding for the real estate improvements.

 

 

Chapter 380 Incentives

The City may offer a range of incentives designed to promote local economic development.  These incentives are normally negotiated between the company and the City but can include reimbursement of certain expenses. Chapter 380 agreements are often offered in lieu of tax abatement.

Tax Increment Financing

The City can designate a reinvestment zone to provide tax increment financing of project costs for public works or public improvements in the zone. Tax increment bonds or notes may be used to pay project costs. The proceeds from taxes on improvements within the zone are used to pay the debt service on the bonds or notes or for the cost of the project for a designated time as determined by a TIF plan adopted by the taxing entities participating. School districts are prohibited from participating in TIFs. The TIF can be used to finance improvements required by a project in order to locate in the City of Kilgore.

Industrial Revenue Bonds

KEDC may issue tax-exempt bonds to finance land and depreciable property for manufacturing facilities. The maximum bond amount is $10,000,000 for tax-exempt issues, and the maturity of the bonds may extend to the lesser of 40 years or 120 percent of the depreciable life of the assets being financed. Eligible project costs include the acquisition by a business of an existing facility, acquisition of land, construction of new facilities, machinery, tools, equipment, and a limited amount of the bond issuance costs. The bonds are subject to the state’s private activity bond volume cap administered by the Texas Bond Review Board.

NETEDD Revolving Loan Fund
The NETEDD RLF will finance up to 1/3 of total project costs not less than $50,000 or greater than $300,000 depending upon availability of funds. Interest rate is fixed over the life of the loan at prime rate depending on credit worthiness. The term of the loan is determined by the useful life of the assets pledged as collateral, and NETEDD will subordinate to the local lender. Equity injection of 25% is usually required.
 
The Chapman Revolving Loan Fund is a direct loan program for businesses or governmental entities to provide loan funds.  The original funds were from a grant from Housing and Urban Development.  Former U.S. Representative Jim Chapman was the catalyst for obtaining the funds.
 
The Northeast Texas Economic Development District has a revolving loan fund that is managed by ATCOG.  These funds are available for loans in the original sixteen counties of the economic district as direct loans to certain manufacturers and commerical entities.
 
For more information contact Richard M. Powell, Economic Development Manager, at the Ark-Tex Regional Development Company in Texarkana at 903.832.8636 or rpowell@atcog.org.
 
 

 

Chapman Revolving Loan Fund
Chapman Revolving Loan Fund is a loan-guarantee program for projects creating permanent full-time jobs. The program will guarantee not less than $35,000 and not greater than $250,000 or 50% of the total project cost, whichever is less. Generally the interest rate is calculated at CD rate plus 3% amortized for 7 to 15 years depending on the purpose of the loan.
SBA 504 Loan Program

Small Business Administration 504 Loan Program is a direct-lending program providing long-term financing for fixed assets at a fixed rate of interest at or below New York prime rate. Designed to create and retain full-time jobs and to help businesses start-up or expand, the loan usually includes a senior lien from a private-sector lender covering 50% of the project cost and at least 10% equity injection. Generally the business must create or retain one job for every $35,000 provided by the SBA. The maximum loan is $1,000,000 for job creation. Companies located in Kilgore have access to the program through the East Texas Regional Certified Development Company.

SBA 7a Loan Program
Small Business Administration 7(a) Loan Guaranty Program provides guarantees for small businesses unable to secure financing on reasonable terms through normal lending channels. The SBA will guarantee up to 75% of a private-sector loan up to a maximum of $750,000. The rate and term of the loan are set by the private-sector lender.
Economic Development Administration
This program provides grants funded on a competitive basis for public water and wastewater facilities, access roads, rail spurs, or projects consistent with an overall economic development plan that serves industry and commerce.  The application and approval process requires additional time.
TX Capital Access Program

The program is designed to increase the availability of financing for businesses and non-profit organizations that face barriers in accessing capital.  Eligible borrowers can be any small business with less than 500 employees or a non-profit corporation.  The proceeds may be used for working capital or the purchase, construction, or lease of capital assets including land, buildings, and equipment.

Linked Deposit Program
This program encourages lending to qualified businesses which are historically underutilized, child care providers, non-profit corporations and small businesses located in an enterprise zone.  It offers lenders and borrowers a lower cost of capital.  Loan amounts range from $10,000 to $250,000.  Proceeds may be used for working capital, purchase, construction or lease of capital assets, including land, buildings and equipment.
Agricultural Business Programs
The Texas Department of Agriculture offers a variety of financing and guarantee programs to assist eligible businesses or individuals involved in agricultural-related economic development projects. These include:  Texas Agricultural Finance Authority Loan Guaranty Program, Direct Loan Program, Loan Participation Program, Young Farmer Program, Farm & Ranch Finance Program, and Linked Deposit Program.
Industry Development Loan Program

The Texas Industry Development (TID) Loan Program provides capital to Texas communities at favorable market rates. The main objective of TID is to support projects that will stimulate the creation of jobs. TID loans can be used for a variety of purposes including community infrastructure development. TID financing is available for loans above $5,000,000.

TID Program loans are variable rate, low-cost, long-term financing opportunities to cover costs of economic development projects. The term of the loan cannot extend beyond the useful life of the assets, or bond maturity in 2025. Debt service is provided by the issuing authority.
 

The TID program operates within a non-profit corporation under the Development Corporation Act of 1979 (Vernon's Texas Civil Statutes Article 5190.6), Texas Small Business Industrial Development Corporation (TSBIDC). The 67th Legislature in 1981 authorized TSBIDC to issue bonds for economic development projects and is administered by the Office of the Governor.

Product Development Fund

The Texas Product Development Fund provides financing to aid in the development, production and commercialization of new or improved products within the state. Products appropriate for the Fund are inventions, devices, techniques, or processes that have advanced beyond the theoretical stage and are ready for immediate commercial application.

Preference for funding will be given to the state’s defined industry clusters within emerging technology fields including semiconductors; nanotechnology; biotechnology and biomedicine; renewable energy; agriculture and aerospace. Job creation and job retention within Texas will be considered within funding priorities.
 
The Fund is a revolving loan program with capital provided from $25 million in taxable bonds issued in 2005. The Office of the Governor, Texas Economic Development Bank administers the Fund at the direction of the Governor’s appointed nine member board.
Small Business Fund

The Texas Small Business Fund provides financing to foster and stimulate the development of small businesses in Texas. Preference for funding will be given to the state’s defined industry clusters within emerging technology fields including semiconductors; nanotechnology; biotechnology and biomedicine; renewable energy; agriculture and aerospace.

Preference will be given to small businesses that have received financing from the state’s Small Business Development Centers (SBDC) or through the Small Business Innovative Research program (SBIR).
 
The Fund is a revolving loan program with capital provided from $20 million in taxable bonds issued in 2005. The Office of the Governor, Texas Economic Development Bank administers the Fund at the direction of the Governor’s appointed nine member board.