1. An Offer Letter is a written document that outlines the community's initial incentive offer to the prospect.
2. The Offer Letter is NOT a binding contract.
3. An Offer Letter is sent to a prospect after the staff and KEDC leadership have reviewed the Economic Impact Analysis.
4. The Offer Letter is the beginning of negotiations with the prospect.
5. An Offer Letter can be submitted to the prospect with a clear understanding that the offer is contingent on the approval of the authorizing agencies.
6. Cash incentives are subject to the official approval of the Killeen Economic Development Corporation.
7. Tax abatement agreements are subject to the official approval of the Killeen City Council.
1. The Performance Agreement is a written document created after KEDC has approved the incentive package.
2. The Performance Agreement should clearly state:
1. the parties to the agreement;
2. KEDC's responsibilities;
3. the Prospects responsibilities;
4. the terms and conditions under which KEDC can access the prospect's records;
5. default definitions; and
6. penalties for failure to remedy a default.
3. The Performance Agreement is executed by the president of KEDC.
4. The executed document is mailed to the prospect for execution by their officer.
Texas State Incentives
Below is a brief description of incentives available to companies through the State of Texas Governor's Office.
1. Texas Enterprise Fund: The 78th Texas Legislature established the Texas Enterprise Fund (TEF) in 2003 to help attract new jobs and investment to the state. The fund was subsequently re-appropriated by the Legislature in 2005, 2007, 2009, 2011, 2013, and 2015. As the largest "deal closing" fund of its kind in the nation, TEF continues to attract jobs to Texas. The fund is used only as a final incentive tool where a single Texas community is competing with another viable out-of-state option. TEF is an application-driven program, where a prospective company considering relocating to or expanding in Texas submits an application to the Office of the Governor (OOG) for review. The OOG never advocates for one Texas community over another and has no input on which Texas community the company ultimately selects.
Projects considered for a TEF award must demonstrate a significant rate of return on the public dollars being invested in the project. Additionally, every TEF project must meet several primary measures to be considered. These include competition with another state or country for the project, significant projected job creation, above-average projected wages, substantial capital investment by the company, and community involvement in the form of local economic incentive offers.
2. Enterprise Zone: Must hire 25 percent of jobs from those that are economically disadvantaged. If nominated, the company can receive an average of $2,500 per job created for state sales and use tax on qualified expenditures. The project's apportioned taxable capital may be reduced by 50 percent of the capital investment or the apportioned earned surplus income may be reduced by 5 percent of the capital investment made in the Enterprise Zone (the business must pay the highest liability).
3. Skills Development Fund: KEDC can apply for the Skills Development Fund through the Texas Workforce Commission to obtain funding for customized training with Central Texas College.
4. Texas Industry Development Loan Program (TID): The Killeen Economic Development Corporation can leverage funds through this program for projects above $5 million. Projects can include the cost of purchasing land, buildings, construction, machinery, and equipment.
5. Industrial Revenue Bonds: This is a tax-exempt financing program to finance land and depreciable property for eligible industrial or manufacturing projects. Capital Investment bond range from $2-$10 million. The debt service on the bond is payable by the company.
6. Taxable Industrial Revenue Bonds: This is taxed revenue bond, which is typically with higher interest rates than tax-exempt issues, but these issues do not have restrictions on the use of the amount.
Click here for more detailed information about State incentives.