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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
