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Incentives - Local and State

Local Incentives

The City of Lockhart and the Lockhart Economic Development team understand the unique and confidential needs of businesses and developers. To facilitate and encourage development, the City offers progressive economic development incentives.

Lockhart Industrial Park II is owned and operated by the City of Lockhart and Lockhart Economic Development Corporation; and land is offered at competitive prices to stimulate job creation and investment in the community.

4B Sales Tax Funds

These funds can be used to attract new industrial development, assist with expansions, or provide related infrastructure. (A development assistance package could be used by the company to meet location and development costs in Lockhart.)

Triple Freeport Tax Exemption

Texas communities tax business inventory at the same rate as land, buildings and equipment. However, some cities, like Lockhart, grant the Triple Freeport Exemption from all three taxing entities, the City of Lockhart, Caldwell County and the Lockhart Independent School District.

The exemption covers tangible goods, excluding services and petroleum products, which are detained in the state for purposes of assembling, storing, manufacturing, processing, or fabricating by the person who acquired or imported the property. To qualify for the exemption, the goods must be transported out of state no later than 175 days after the date the owner acquired or imported the property.

The owner must file an application with the Chief Appraiser by April 30 of each year the exemption is sought. The Caldwell County Appraisal District provides information and the application for Freeport Exemptions.

Foreign Trade Zone 183

Goods that enter a Foreign Trade Zone are not subject to Customs duties or ad valorem taxes until they are brought out of the zone for sale in the US market. Goods shipped directly to foreign destinations from the zone are exempt from duty payments. Foreign Trade Zone 183 was recently reorganized to include Caldwell County.

Foreign Trade Zones

A Foreign Trade Zone (FTZ) is an area within the United States which is designated by the federal government as outside of U.S. Customs territory. FTZs encourage investment in the U.S. and the creation of American jobs by allowing U.S. businesses to operate with equivalent customs treatment to business conducted off-shore. Business using FTZs can reduce customs duties and fees, and achieve logistics benefits for the import and export of goods. FTZs can be an effective part of a community economic development program.

The Austin region is served by FTZ 183 which was established in the 1990's to capitalize on the growth of the high tech industry and to provide local businesses with a tool to help them compete in the global economy. The Foreign Trade Zone of Central Texas, Inc (FTZCTI), is the grantee of FTZ 183 is run by a board of directors appointed by the cities and chambers in the MSA. The Austin Chamber of Commerce is the administrator for FTZ 183.

In July 2012, the Foreign Trade Zone of Central Texas received approval from the federal government to operate under new streamlined procedures designed to make U.S. business more competitive. Under the new approval, all of the five county metropolitan statistical area (MSA) has been preapproved by the federal government as eligible foreign trade zone property. With the concurrence of local officials, the federal government will provide any eligible business in the MSA foreign trade zone designation on an expedited and simplified basis. A process that has taken historically over a year and been very expensive will now take less than 45 days with modest expense.

Foreign Trade Zone and Freeport

There is quite a bit of overlap of the FTZ and freeport exemptions. Freeport exempts inventory which is held in Texas for less than 175 days from property tax. The FTZ exempts any item imported from outside the U.S., regardless of the ultimate destination, and there is no time restriction.  For example, inventory which is held in Austin for 90 days and then goes to Arkansas would be exempt under Freeport, but not FTZ. Inventory imported into an Austin FTZ from Japan which is sold to a customer in Fort Worth is exempt under FTZ, but not Freeport. Practically speaking, for jurisdictions which have a Freeport exemption, the incremental effect of the FTZ is to exempt inventory which has been imported from outside the U.S. and is destined for a Texas customer. All other inventory that might be exempt under the FTZ exemption is already exempt under Freeport. And, of course, the Freeport exemption applies to all property within the jurisdiction, while the FTZ exemption is site specific, applying only to inventory in activated FTZ space.

For any questions, for more information, and assistance please email: ecodev@lockhart-tx.org

Tax abatements

The City of Lockhartand Caldwell County considers tax abatements to eligible developments, based upon the new tax base value the project will add to Lockhart and based upon the number and type of jobs the project will save or create.

Sales Tax Rebate

The City of Lockhart and Caldwell County acknowledge the impact of new sales tax generating companies on their region and consider eligible developments based upon the generation of new sales tax, along with job creation and investment.

Tax Exempt Financing

Lockhart has established the Lockhart Economic Development Corporation to provide the conduit for issuing tax-exempt industrial revenue bonds for manufacturing company developments that meet state and federal guidelines.

Job Training

Lockhart offers all of the training programs available to companies through the state of Texas. These training programs include those offered through the Texas Workforce Commission and Skills Development Fund. The Austin Community College System is prepared to assist companies to develop specific skills. Gary Job Corps, located in Caldwell County, offers training and graduates______ each year.

Corporate Relocation Assistance

The Lockhart Economic Development Departmentassists companies not only in matters related to business (such as support services and products) but also personal and family services including school, house availability, local banks, churches or synagogues, shopping, clubs and organizations, medical services, arts and culture, etc. Request Contact ecodev@lockhart-tx.org

State:

The Texas Enterprise Fund can be used for a variety of economic development projects, including infrastructure development, community development, job training programs and business incentives.

The Texas Capital Fund Infrastructure and Real Estate Programs provide a way for an eligible applicant to receive funds to make infrastructure and/or real estate improvements to support a specific business that is expanding or beginning operations in the applicant’s jurisdiction. The business must create or retain jobs for Texans.

The Skills Development Fund, offered through the Texas Workforce Commission, assists businesses and trade union by financing the design and implementation of customized job training projects at public community colleges or technical colleges.

The Emerging Technology Fund was created by the state to attract investment in cutting-edge research and technology. Projects are eligible for funding if they will result in the creation of high quality new jobs and have the potential to result in a medical or scientific breakthrough.

For information on local or state incentives, Economic Development Director at 512-398-3461 or by email at ecodev@lockhart.-tx.org

Property Tax Economic Development Programs

Value Limitation & Tax Credits, Chapter 313, Tax Code

An appraised value limitation is an agreement in which a taxpayer agrees to build or install property and create jobs in exchange for an eight year limitation on the taxable property value for school district maintenance and operations tax (M&O) purposes. The minimum limitation varies by school district. The application for a limitation on the appraised value for M&O purposes is submitted directly to the school district and may require an application fee, which is established by each school district. View application forms #50-296 and # 50-300 for School Districts-Economic Development Act.

To qualify for a tax credit, a separate application must be submitted before September 1 of the third year of a ten year period. The credit is for the M&O taxes paid over the limitation amount in the first two years. The school districts tax collector must credit the overage in equal parts over the last seven years of the agreement, but the credit may not exceed 50 percent of the total taxes paid on the qualified property for a given year. Any eligible amount not credited in the seven year period must be credited over the next three years, but not to exceed the total taxes paid on the qualified property. View further details about the Appraised Value Limitation and Tax Credit.

Tax Abatement Act Chapter 312, Tax Code

A tax abatement is an agreement between a taxpayer and a taxing unit that exempts all or part of the increase in the value of the real property and/or tangible personal property from taxation for a period not to exceed 10 years. School districts may not enter into abatement agreements. Each taxing unit that wants to consider tax abatement proposals must adopt guidelines and criteria for the creation of a reinvestment zone and must hold a public hearing. After these steps are complete, the taxing unit may, by official action, designate a zone.

Seven days written notice of the hearing must be given to the presiding officer of each of the other taxing units that has taxing jurisdiction over real property within the zone. Notice of the hearing must also be published at least seven days before the hearing in a newspaper of general circulation in the city. At the public hearing on the reinvestment zone, the governing body must find that the improvements sought are feasible and would benefit the zone after the expiration of the agreement, and the zone meets one of the applicable criteria for reinvestment zones.

Tax Increment Financing, Chapter 311, Tax Code

Tax increment financing (TIF) is a tool that local governments can use to publicly finance needed structural improvements and enhanced infrastructure within a reinvestment zone.

A reinvestment zone can be initiated by petition of the affected property owners. A municipality or county can initiate a reinvestment zone without the need for a petition. Restrictions on the creation of a reinvestment zone include:

  • No more than 10 percent of the property may be used for residential purposes (does not apply if the district is created by a petition of the landowners).
  • May not contain property that cumulatively would exceed 15 percent of the total appraised property value within the city and its industrial districts.
  • May not create or change the boundaries of an existing zone if the zone would contain more than 15 percent of the total appraised value or real property taxable by a county or school district.

Learn more about Tax Increment Financing Registry.