Incentives

Overview

Cameron economic development incentive packages are determined by type of business; quality of jobs created or retained; wages paid; capital investment; and overall community impact. County and State incentives may also be available. The Cameron Economic development team, inclusive of City leadership is ready to work with you to identify the incentives available for your potential Cameron locations.

The Cameron Economic Development Team

The Cameron Economic Development team is comprised of the Cameron Industrial Foundation; the Cameron Economic Development Corporation; the Economic Development Director; as well as the City of Cameron.

Cameron Industrial Foundation

The Cameron Industrial Foundation (CIF) is a non–profit organization. This organization works with new and expanding businesses interested in establishing or growing their presence in Cameron.

Cameron Economic Development Corporation

The Cameron Economic Development Corporation (CEDC) is a public entity established under the authority of the City of Cameron to administer an economic development sales tax known as a “Type B” sales tax.

Economic Development Executive Director

The Economic Development Executive Director is your primary point of contact. The director will work with you to understand the needs of your business for a new or expanding location and be available to guide your project through to completion.

City of Cameron

The City of Cameron is an active and essential partner in business attraction and retention
As a team we work to address the needs of your project in Cameron, Texas.

Cameron’s Target Industries

In 2015, the EDC prioritized four strategic industry clusters:

1. Advanced Manufacturing

• Plastics
• Rail–served manufacturing
• Specialty metals

2. Specialty Agriculture

• Feed and Livestock Production
• Specialty goods production
• Agritourism
• Plant and Animal Sciences

3. Back Office and Administrative

• Medical Records Processing
• Financial Processing
• Accounting
• Order Processing

Details and More Details

Eligible Projects:

Projects eligible for funding include industrial development projects, such as business infrastructure, manufacturing, research and development, and job training classes. Emphasis is placed on business creating or retaining primary jobs. The term primary job refers to a job that is available at a company for which a majority of the products or services of that company are ultimately exported to regional, statewide, national or international markets infusing new dollars into the local economy; and is included in one of the following North American Industry Classification System (NAICS) sector codes, as defined in the Development Corporation Act of 1979, as amended.

Permissible Projects:

Section 2(11) of the Development Corporation Act of 1979, Article 5190.6 defines the scope of permissible projects for a Type B Corporation as land, buildings, equipment, facilities, expenditures, targeted infrastructure and improvements (one or more) that are for the creation or retention of primary jobs that are found by the board of directors to be required or suitable for any of the following projects:

• Manufacturing and industrial facilitates
• Research and development facilities
• Military facilities
• Transportation facilities (including but not limited to airports, hangars, airport maintenance and repair facilities, air cargo facilities, related infrastructure located on or adjacent to an airport facility, ports, mass commuting facilities, and parking facilities).
• Sewage or solid waste disposal facilities
• Recycling facilities
• Air or water pollution control facilities
• Distribution Centers
• Small warehouse facilities
• Primary job training facilities for use by institutions of higher education
• Regional or national corporate headquarters

A Type B Corporation may also provide land, buildings, equipment, facilities and improvements found by the board of directors to promote or develop new or expanded business enterprises that create or retain primary jobs, including a project to provide:

• Public safety facilities
• Streets and roads
• Drainage and related improvements
• Demolition of existing structures
• General municipally owned improvements
• Any improvements or facilities that are related to any of those projects and any other projects that the board in its discretion determines promotes or develops new or expanded business enterprises that create or retain primary jobs.

Performance Agreement

The Cameron Economic Development Corporation must have a written performance agreement with any business that it funds directly or makes expenditures that benefit an eligible project. A performance agreement is required to contain the following at a minimum:

• A schedule of additional jobs to be created or retained
• The capital investment to be made by the business for the project, and
• The terms of repayment of CEDC investment if the business fails to meet the parameters specified in the agreement.

Type of Incentive:

Land

The CEDC may offer land at the Cameron Business Park at a discount depending on the overall economic impact of the project.

Grant Funding

The CEDC may provide grants as outlined in the preceding section titled “Permissible Projects”. Typically all grants are in the form of a forgivable loan up to as much as $1,000 per job created or retained subject to final negotiation.

Small Business Administration (SBA) CDC/504 Loans.

The Certified Development Company (CDC)/504 Loan program is a long–term financing tool for economic development within a community. The 504 program provides growing businesses with long–term, fixed-rate financing for major fixed assets, such as land and buildings. A certified development company is a non–profit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. Typically, a 504 project includes a loan secured with a first lien from a private–sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC covering up to 40 percent of the cost and a contribution of at least 10 percent equity from the small business being helped.

Opportunity Zone

The City of Cameron is largely covered by an Opportunity Zone.  Opportunity Zones allow an investor to defer capital gains tax on a qualifying opportunity zone project. The investor benefits of an Opportunity Zone are explained at https://opportunityzones.hud.gov/investors.  Entrepreneurial benefits are described at  https://opportunityzones.hud.gov/entrepreneurs.  

Cameron's Opportunity Zone roughly mirrors the New Market Tax Credit (NMTC) Qualifying zone although the NMTC Zone is more expansive than the Opportunity Zone.

City of Cameron:

Tax Abatements

The City of Cameron offers property tax abatement on real or personal property to certain types of businesses based on capital investment and the number of jobs created or retained. Typical city abatement does not exceed 5 years. The abatement schedule is designed to provide the greatest possible value to the project early which in many cases may indicate a shorter term of abatement. The maximum term allowed for abatement on real property and fixed improvements is 10 years as defined by the State of Texas.

All tax abatement applications are subject to City Council approval. Abatements are submitted for City Council approval with the completed incentive recommendations as outlined in “Incentive Application Process and Timeline”. All abatement applications must be approved prior to the start of construction.

Texas PACE Financing

Both the City of Cameron and Milam County authorized the use of Texas PACE Clean Energy Financing for property improvements.

WHAT IS PACE? Property Assessed Clean Energy (TX-PACE) is a proven financial tool that incentivizes Texas’ property owners to upgrade facility infrastructure with little or no capital outlay. Approved by State legislation and established by local governments, TX-PACE programs enable owners to lower their operating costs and use the savings to pay for eligible water conservation, energy efficiency, resiliency, and distributed generation projects. Owners gain access to private, affordable, long-term (typically 10-20 years) financing that is not available through traditional funding avenues. 

For more details visit www.texaspaceauthority.org or contact the Cameron Economic Development Office.

Milam County:

Tax Abatements

The Cameron Economic Development team will coordinate with Milam County and the business to facilitate the tax abatement process between the business and County. Any tax abatement incentives are at the sole discretion of the Milam County Commissioners Court and subject to the terms and conditions set forth by Milam County.

State of Texas:

Enterprise Zone Program

The Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state. Local communities must nominate a company as an Enterprise Project to be eligible to participate in the program. Legislation limits allocation to the state and local communities per biennium. The state accepts applications quarterly with deadlines on the first working day of March, June, September, and December. Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of refunding are related to the capital investment and jobs created or retained at the qualified business.

Texas Enterprise Fund

The Texas Enterprise Fund is managed by the Governor of Texas and is considered to be the State’s “deal-closing” fund when a site in Texas is in contention with a site in another 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. Capital investment, job creation, wages generated, the financial strength of the applicant, applicant’s business history, analysis of the relevant business sector, and federal and local government and private-sector financial support of a project are all considered to be significant factors in approving of the Texas Enterprise Fund.

Texas Product/Business Fund

The Texas Product/Business Fund provides asset-backed financing to companies doing business in Texas. Financing is done in the form of direct asset-based loans with competitive lending rates. Loans can be amortized up to the life of the asset.

Benefit

• Asset-Based Loans
• Competitive Loan–To–Value (LTV)
• Positive EBITDA not required
• Secure loans with property plant and equipment and accounts receivable
• Competitive variable interest rates
• Communities or individuals can assist as Guarantors
• Funds from asset-based financing can be used for day–to–day operating expenses, or as capital for restructuring, turnarounds, mergers and acquisitions, buyouts, new equipment, new product lines, more efficient product lines, etc.
• Past loans have varied in use and amounts, which have been as low as $225,000 and as high as $40 million

Bond Financing:

Industrial Revenue Bond Program

The State of Texas Industrial Revenue Bond Program (IRB) is designed to provide tax-exempt or taxable financing for eligible industrial or manufacturing projects as defined in the Development Corporation Act of 1979. The Act allows cities, counties, and conservation and reclamation districts to form non–profit industrial development corporations (IDCs) or authorities on their behalf. The purpose is to provide bond financing for projects within their jurisdictions.

The IDC issues bonds to finance the capital costs for an industrial or manufacturing business. Generally, the bond debt service is paid by the business under the terms of a lease, sale, or loan agreement. As such, it does not constitute a debt or obligation of the sponsoring governmental unit, the IDC, or the State of Texas.

Texas 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. Note: A project will not be eligible for funding under the program if the project is moving existing jobs from one municipality or county in Texas to another municipality or county within the state.

See http://www.texaswideopenforbusiness.com/incentives-financing/financing/tid.php for details regarding the Texas State Financing Programs.

State Sales Tax Exemptions:

Manufacturing Machinery & Equipment

Leased or purchased machinery, equipment, replacement parts, and accessories that have a useful life of more than six months, and that are used or consumed in the manufacturing, processing, fabricating or repairing of tangible personal property for ultimate sale, are exempt from state and local sales and use tax. Texas businesses are exempt from paying state sales and use tax on labor for constructing new facilities. Texas businesses are exempt from paying state sales and use tax on the purchase of machinery exclusively used in processing, packing, or marketing agricultural products by the original producer at a location a operated by the original producer.

Natural Gas & Electricity

Texas companies are exempt from paying state sales and use tax on electricity and natural gas used in manufacturing, processing, or fabricating tangible personal property. The company must complete a “predominate use study” that shows that at least 50% of the electricity or natural gas consumed by the business directly causes a change to a product.

Texas Workforce Solutions:

Workforce Training

The Skills Development Fund was created to finance customized job training for local businesses, in cooperation with Texas public community and technical colleges. The Fund is administered by the Texas Workforce Commission. Grants are awarded on a competitive basis to help fund companies who partner with community colleges to design custom job training for the company. Cameron and Milam County are in the Temple College service area. Temple College is the lead entity for workforce training grants. They have the ability to coordinate with technical colleges to create, obtain, and administer custom training for a business.

Workforce Solutions of Central Texas

Workforce Solutions of Central Texas with offices in Rockdale is ready and willing to help with local recruitment efforts including pre-employment screening services.

Evaluation Criteria

To be eligible to contract for economic development incentives the followings criteria must be met:

1. The business must have a profitable history and demonstrate good management.
2. The proposed project must create or retain jobs that are equal to or greater than the prevailing wage in Cameron or Milam County.
3. The project must be consistent with Cameron's economic development goals.
4. The project must conform to the requirements of city zoning; building codes and applicable ordinances.

If the project meets basic eligibility requirements the following additional factors will be considered to determine the level of incentives.

Employment Impact

• Wage level of jobs to be created or retained, as well as benefits offered to full-time employees.
• The number of new residents moving to the community and potential for new housing to support new employees.

Investment

• Type and value of proposed private and public improvements.
• Amount of local taxes to be generated through project construction (sales and use tax, ad valorem, utilities, fees).
• Costs, if any, to be incurred by the community to provide services or facilities for the project.

Community Impact

• The project falls within a target industry.
• Positive or negative impact on the opportunities of existing businesses.
• Potential for attracting related businesses or residents to the community as a result of the project.
• Overall, maturity and market potential of the industry.
• Life of the proposed project.

Other Factors

• Level and potential for business visitors.
• Number and frequency of overnight truck deliveries.
• Likelihood of incentives being a determining factor in the decision to locate or expand in Cameron.

Incentive Application Process and Timeline

1. Business completes and submits Application for Economic Development Assistance / Impact Data Sheets to the Cameron Economic Development Director. (see Economic Development Director for datasheet)
    
2. Economic Development Director reviews the application for completeness. Should additional documentation be required the business owner/developer will be contacted to gather the needed information.
    
3. Upon completion and review of the Application for Economic Development Assistance / Impact Data Sheets, an economic development impact analysis is performed and economic development incentives are negotiated. The Economic Development Incentive Agreement is between the Owner/Developer of the project and the CEDC. The agreement outlines the obligations of the applicant and the CEDC.
    
4. Staff forwards summaries of the economic impact analysis and application, proposed incentive agreement, and a recommendation for approval or disapproval to the Cameron Industrial Foundation (CIF). The CIF authorizes the presentation of recommendations to the CEDC.
    
5. The CEDC board of directors approves or disapproves the Agreement. If disapproved the application stops.
    
6. If approved, the Agreement moves forward for City Council approval.
    
7. If approved by City Council, the CEDC publishes a notice in the newspaper of the project and a public hearing if required. Funding of the project can occur no sooner than 60 days from the first publication date.