TITLE 10. COMMUNITY DEVELOPMENT

PART 5. OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM OFFICE

CHAPTER 176. ENTERPRISE ZONE PROGRAM

The Office of the Governor, Texas Economic Development and Tourism Office ("Office") proposes amendments to 10 TAC §§176.1 - 176.5. The amendments clarify definitions, provide for the electronic submission of applications and other communications through an electronic portal, clarify notice requirements, align the text of the rules with statutory language, and improve readability.

SECTION BY SECTION SUMMARY

Proposed amendment to rule §176.1 would specifically note the participation of veterans in the program. The proposed amendments also clarify that a single project may only have one concurrent designation for the same qualified business. The amendments also clarify that the window during which a project may begin making investments and creating jobs for program purposes is ninety business days, as specified in section 2303.003(1-b), Texas Government Code. The amendments would also require the submission of applications and other written communications through a manner specified by the office, to include an electronic portal.

Proposed amendment to rule §176.2 would remove a requirement that the required ordinance include a statement that the governing body is in full compliance with chapter 2303, Texas Government Code. The requirement is not established in statute and applicants otherwise demonstrate they are compliance with chapter 2303, Texas Government Code. The proposed amendments also clarify notice and posting requirements. Other changes enhance readability and make conforming redesignations of provisions to account for additions and deletions of regulatory text.

Proposed amendment to rule §176.3 would specifically note the veteran hiring requirements specified in Section 2303.402(a), Texas Government Code. Other changes align regulatory text with current statutes and enhance the readability and clarity of the text.

Proposed amendment to rule §176.4 would reduce the amount of application materials an applicant has to provide, such as removing the requirement the application must be hole-punched and in a three-ring binder. Instead, applications must be submitted using the Office's electronic portal. Other changes align rules with the statutory allowance provided by section 2303.4052(b), which allows the submission of digital scans of certified copies of required documents. The amendments would also clarify that applicants must include information related to full-time jobs, rather than any type of job. Other non-substantive changes modernize the regulatory text, enhance readability, and promote clarity.

Proposed amendment to rule §176.5 would align rule text with statute by noting the Texas Comptroller of Public Accounts will report certain information to the Office on or before the 60th day after the end of the fiscal year, rather than October 1 of each year.

FISCAL NOTE

Adriana Cruz, Executive Director of the Office, has determined that the first five-year period the proposed rules are in effect, there will be no additional estimated cost, reduction of costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rules. Additionally, Ms. Cruz has determined that enforcing or administering the rules does not have foreseeable implications relating to the costs or revenues of state or local government.

PUBLIC BENEFIT

Ms. Cruz has determined for the first five-year period the proposed rules are in effect, the public benefit will be clarity and consistency in the creation of and operation of the Office's advisory committees, as well as a benefit to Texas in identifying countries with which the Office can enhance business and economic development relationships.

PROBABLE ECONOMIC COSTS

Ms. Cruz has determined for the first five-year period the proposed rules are in effect, there will be no additional economic costs to persons required to comply with the proposed rules.

REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO-BUSINESSES AND RURAL COMMUNITIES.

Ms. Cruz has determined that the proposed rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities; therefore, a regulatory flexibility analysis under §2006.002, Texas Government Code, is not required.

LOCAL EMPLOYMENT IMPACT STATEMENT

Ms. Cruz has determined the proposed rulemaking does not have an impact on local economy; therefore, no local employment impact statement under §2001.022, Texas Government Code, is required.

GOVERNMENT GROWTH IMPACT STATEMENT

Ms. Cruz has determined that during each year of the first five years in which the proposed rules are in effect, the rules:

1) will not create or eliminate a government program;

2) will not require the creation of new employee positions or the elimination of existing employee positions;

3) will not require an increase or decrease in future legislative appropriations to the OOG;

4) will not require an increase or decrease in fees paid to the OOG;

5) will not create new regulations;

6) will expand certain existing regulations, limit certain existing regulations, or repeal existing regulations;

7) will not increase the number of individuals subject to the applicability of the rules; and

8) will positively affect the Texas economy.

TAKINGS IMPACT ASSESSMENT

Ms. Cruz has determined that there are no private real property interests affected by the proposed rules; therefore, the Office is not required to prepare a takings impact assessment pursuant to §2007.043, Texas Government Code.

REQUEST FOR PUBLIC COMMENTS

Comments on the proposed rules may be submitted to Ray Jensen, Office of the Governor, by email to ray.jensen@gov.texas.gov with the subject line "Texas Enterprise Zone Program Rules." The deadline for receipt of comments is 5:00 p.m., Central Time, on June 9, 2025, which is at least 30 days from the date of publication in the Texas Register.

STATUTORY AUTHORITY.

Section 2303.051(c), Texas Government Code, authorizes the Office to adopt rules necessary to carry out the purposes of chapter 2303, Texas Government Code.

CROSS REFERENCE TO STATUTE

No other statutes, articles, or codes are affected by the proposed rules.

§ 176.1. General Provisions.

(a) Purpose. It is the purpose of the Texas Enterprise Zone Act to establish a process that clearly identifies distressed areas and provides incentives by both local and state government to induce private investment in those areas by the provision of tax incentives and economic development program benefits for the creation and retention of high quality jobs. Under this program , economic development is encouraged by allowing enterprise projects to be designated outside of an enterprise zone, with a higher threshold of hiring economically disadvantaged , [ or ] enterprise zone residents , or veterans . The rules in this chapter [ The purpose of these sections is to ] provide standards of eligibility and procedures for designation of applications for qualified businesses as enterprise projects.

(b) Definition of terms. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Act--The Texas Enterprise Zone Act, Chapter 2303, Texas Government Code, as amended.

(2) Active designation--The period of time from the designation date to the ending date of the project or activity as provided in the nominating ordinance, order or resolution.

(3) Applicant--The municipality or county filing an application with the Bank on behalf of a qualified business for designation of an enterprise project under the Act, §2303.405, and this chapter.

(4) Application date--The first business day of the months of September, December, March and June, if there are designations available.

(5) Approval date--The application date of an enterprise project as approved by the Bank.

(6) Capital investment--Money paid to purchase capital assets to be used in the regular conduct of the business or activity at the qualified business site, or fixed assets including but not limited to land, buildings, labor used to construct or renovate a capital asset, furniture, manufacturing machinery, computers and software, or other machinery and equipment. Expenditures for routine and planned maintenance required to maintain regular business operations are only considered qualified capital investment if there will be a measurable increase in production capacity or if the expenditures will result in increased productivity which may be expressed as a decrease in the overall cost per unit produced, and are limited to 40 percent of the total capital investment spent at the qualified business site. Property that is leased under a capitalized lease is considered a qualified capital investment but property that is leased under an operating lease is not considered a qualified capital investment.

(7) Claim period--A twelve-month period, during the active designation period, for which hours are accumulated by qualified employees to be claimed for benefit.

(8) Concurrent designation--Two [ or more ] enterprise project designations for the same qualified business at the same qualified business site for separate projects or activities, with overlapping designation periods.

(9) Controlled group--A group of businesses as defined in Title 26, Subtitle A, Subchapter B, Part II, Section 1563(a), Internal Revenue Code, or business entities with the same ownership.

(10) Director--The Director of the Texas Economic Development Bank.

(11) Distressed county--A county that has a poverty rate above 15.4 percent based on the most recent decennial census; in which at least 25.4 percent of the adult population does not hold a high school diploma or high school equivalency certificate based on the most recent decennial census; and that has an unemployment rate that has remained above 4.9 percent during the preceding five years, based on Texas Workforce Commission data.

(12) Economic Development and Tourism--Economic Development and Tourism Office in the Governor's Office (Office) as established under Chapter 481, Texas Government Code.

(13) Eligible taxable proceeds--Taxable proceeds generated, paid, or collected by a qualified hotel project or a business at a qualified hotel project including hotel occupancy taxes, ad valorem taxes, sales and used taxes, and mixed beverage taxes.

(14) Enterprise project--A designation given to a qualified business by the Bank under the Act, §2303.406, and §176.3 of this title (relating to Qualification for Designation of Enterprise Projects) making the qualified business eligible for the state tax incentives provided by law for an enterprise project.

(15) Executive Director--The Executive Director of the Office.

(16) Extraterritorial jurisdiction--Territory in the extraterritorial jurisdiction (ETJ) of a municipality that is considered to be in the jurisdiction of the municipality, as defined by Chapter 42, Local Government Code.

(17) Governing body--The governing body of a municipality or county participating in the program.

(18) Governing body liaison--The person who holds the position set out in the ordinance or order indicating participation in the program, for the municipality or county to communicate and negotiate with the Bank or Office, qualified businesses nominated to be enterprise projects and any other entities affected by the enterprise zone.

(19) Local government--A municipality or county.

(20) Local incentive--Each tax incentive, grant, other financial incentive or benefit, or program to be provided by the governing body to business enterprises through the program.

(21) Ninety-day window--The period 90 business days prior to the quarterly application deadline date for which an enterprise project is approved. The period of time in which the project may begin making investment and creating jobs for purposes related to the enterprise project designation.

(22) Nominating body--The governing body of a municipality or county that nominated a project or activity of a qualified business for designation as an enterprise project which is located within the jurisdiction of that governing body.

(23) Primary job--A job to be created or retained for benefit by a designated enterprise project, as defined by the Development Corporation Act of 1979.

(24) Qualified property--Any one or more of the following:

(A) tangible personal property located at the qualified business site that was acquired by a taxpayer not earlier than the 90th day before the date of designation as an enterprise project and was or will be used predominantly by the taxpayer in the active conduct of a trade or business;

(B) real property located at a qualified business site that:

(i) was acquired by the taxpayer not earlier than the 90th day before the date of designation of the enterprise project, and used predominantly by the taxpayer in the active conduct of a trade or business; or

(ii) was the principal residence of the taxpayer on the date of the sale or exchange; or

(C) interest in a corporation, partnership, or other entity if, for the most recent taxable year of the entity ending before the date of sale or exchange, the entity was a qualified business.

(25) Staff--The staff of the Texas Economic Development Bank.

(26) Undocumented worker--An individual who, at the time of employment, is not:

(A) lawfully admitted for permanent residence to the United States; or

(B) authorized under law to be employed in that manner in the United States.

(c) Amendment and suspension of the rules. These sections may be amended by the executive director at any time in accordance with the Administrative Procedure Act, Texas Government Code, Subchapter B, as amended. The executive director may suspend or waive a section, not statutorily imposed, in whole or in part, upon the showing of good cause or when, at the discretion of the executive director, the particular facts or circumstances render such waiver of the section appropriate in a given instance.

(d) Written communication with the office. Applications [ Application ] and other written communications [ communication ] to the office must [ should ] be submitted electronically in the manner specified by the office. [ addressed to the attention of the Office of the Governor, Economic Development and Tourism, Texas Economic Development Bank, Attn: Texas Enterprise Zone Program, Post Office Box 12428, Austin, Texas 78711-2428, or by overnight mail to Office of the Governor, Economic Development and Tourism, Texas Economic Development Bank, Attn: Texas Enterprise Zone Program, 1100 San Jacinto Street, Austin, Texas 78701, (512) 936-0100. ]

(e) Fees. On a regular basis, the bank will review all application fees with regard to the program and make adjustments as needed to further the purposes of the program.

§ 176.2. Participation in the Program.

(a) Participation. A local government that seeks [ wishing ] to participate in the program must submit to the Bank the following:

(1) A copy of all public hearing notices posted in compliance with the requirements set forth in subsection (b) of this section. [ with regard to all public hearings held in conjunction with the nomination of the proposed enterprise project. Three notices must occur at least seven days prior to each public hearing. Required elements for the postings are the date, time and location of the public hearing, the name and address of the proposed project, the designation being sought and notice that tax incentives will be considered, if applicable. The three notices are in the form of a: ]

(2) A certified copy of the ordinance or order, as appropriate[ , with original signatures ] that:

(A) [ (B) ] outlines the local incentives that are offered in the enterprise zone area or areas within its jurisdiction;

(B) [ (C) ] identifies, by position, a liaison to oversee, communicate and negotiate with the bank, qualified businesses nominated to be enterprise projects, and any other entities effected by the enterprise zone;

(C) [ (D) ] states the date a public hearing was conducted with respect to local incentives offered, prior to passing the ordinance or order;

(D) [ (E) ] nominates the qualified business for enterprise project designation;

(E) [ (F) ] state the type of project requested, i.e. single, half, double jumbo or triple jumbo enterprise project;

(F) [ (G) ] states whether [ or not ] the qualified business is located in an enterprise zone; and

(G) [ (H) ] is finally adopted no later than the day of the deadline for which the project will be submitted.

(3) A certified copy of the [ A transcript or, in the absence of a transcript, ] minutes of all public hearings held with respect to local incentives available to business enterprises within the jurisdiction of the governmental entity wishing to participate in the program.

(4) The name, title, address, telephone number, and electronic mail address of the nominating body's liaison.

(5) Provide a summary of the economic objectives to revitalize the jurisdiction, as well as a description of the efforts made to develop and revitalize the jurisdiction of the governing body.

§ 176.3. Qualification for Designation of Enterprise Projects.

(a) The Bank may not designate a nominated qualified business as an enterprise project unless it determines that:

(1) the business meets the requirements set forth in the Act, §2303.402, and this chapter;

(2) the qualified business is located in, or has made substantial commitment to locate in an enterprise zone or at a qualified business site;

(3) the applicant's governing body has not reached the maximum number of designations [ designation ] allowed during the biennium;

(4) the applicant's governing body has demonstrated that a high level of cooperation exists between public and private entities;

(5) the designation of the qualified business as an enterprise project will contribute significantly to the achievement of the plans of the applicant for development and revitalization of the area;

(6) the designation of the qualified business as an enterprise project will further the public purposes of the Act and significantly benefit the goals of the program which include, but are not limited to, high impact projects or activities, targeted industry clusters and creation of primary jobs; and

(7) the applicant's governing body is in compliance with the Act.

(b) For job creation, a qualified business must seek [ be seeking ] to create new jobs, or for an existing business , must seek [ seeking ] to expand and increase their current level of employment in Texas. The program, however, does not allow benefit for moving existing jobs from one municipality or county in Texas to another within the state.

(c) For job retention, a qualified business must submit to the governing body a written request for the retained job benefit with documentation verifying which criteria is applicable. The governing body must authenticate the documentation. A copy of the request from the qualified business requesting the retained jobs benefit to the governing body, as well as the backup documentation, must be attached to the application under the applicable Tab. The governing body liaison must verify that the documentation meets at least one requirement for the retained jobs benefit on the application form. In any case, for job retention, the qualified business must maintain the same level of employment that existed 90 days prior to the date of designation. Documentation that the level of employment has been maintained must be submitted with the job certification application to the Comptroller of Public Accounts. Any of the retained jobs that are subsequently vacated must meet the 25% or 35% economically disadvantaged , [ or ] enterprise zone resident , or veteran hiring requirement, as applicable, when the vacant position is filled. The retained job benefit may not be used to receive benefit for moving existing jobs from one municipality or county in Texas to another within the state.

(d) Municipalities or counties with a population of 250,000 or more, based on the most recent decennial census, are eligible for up to nine enterprise project designations during a state biennium based upon availability.

(e) Municipalities or counties with a population of less than 250,000, based on the most recent decennial census, are eligible for up to six enterprise project designations during a state biennium based upon availability.

(f) The Bank may not allocate more than 12 project designations during a quarterly round unless there were fewer than 12 project designations allocated during a previous round in the biennium to offset the difference. The Bank may allocate the remaining nine designations during any round, and may award a designation to a lower scoring project over and above a higher scoring project if it proposes to create a significant number of new jobs and makes a substantial capital investment.

(g) The governing body of a county [ with a population of one million (1,000,000) or more ] may nominate for designation as an enterprise project a project or activity of a qualified business that is located within the jurisdiction of a municipality located in the county. [ A county during any biennium may not use in any one municipality more than three of the maximum number of designations the county is permitted under Texas Government Code §2303.4069(d)(2). ]

§ 176.4. Application for Designation of Enterprise Projects.

(a) An application must be submitted through the online portal [ filed in the format provided (letter size) ] and must contain all information and documentation required under the Act and this chapter, as applicable. Each application for enterprise project designation must be typed directly on the form provided by the Bank.

(b) [ The application must be submitted hole-punched in a three-ring loose-leaf binder with the application form located behind Tab 1, and must include all applicable attachments hole-punched and placed behind the appropriate Tab sections as specified in the application. ] An application that is submitted with four or more material deficiencies will be declined as incomplete. Material deficiencies are items such as the governing body application certification [ with an original signature ], the qualified business application certification [ with original signatures ], or any other required tabbed item.

(c) The applicant shall file with the Bank one original application for designation as an enterprise project. All applications for enterprise project designation must be received by the Office no earlier than one week before, and no later than 11:59 [ 5:00 ] p.m. Central Standard Time, on the first business day of the following months: September, December, March and June. Further, all applications include a non-refundable application fee in the form of a certified check or money order made payable to the Office of the Governor. The application is not considered to be received unless it is received on the online portal [ at the physical location of the Office ] with the non-refundable application fee submitted under separate cover to Office of the Governor, Economic Development and Tourism, Texas Economic Development Bank, Attn: Financial Services [ Texas Enterprise Zone Program ], Post Office Box 12428 [ 12828 ], Austin, Texas 78711. The application fee must clearly show the name of the nominating jurisdiction, as well as the name of the qualified business. Both the application and the application fee must be received by the application deadline. Applications received after a deadline will not be accepted [ returned to the applicant ], and must be resubmitted to the Bank in the prescribed timeframe to be considered for designation during the next application deadline.

(d) Applications received during a quarterly round will be reviewed and scored by the Bank in accordance with the Act, this chapter and the goals of the program.

(e) The application for designation of an enterprise project must contain the following information and documentation, as applicable:

(1) The participants. The application must contain the name, street address, mailing address, telephone number, [ fax number ] and electronic mail address for each of the following involved in the designation of a qualified business as an enterprise project:

(A) the applicant governing body and the applicant governing body's liaison; and

(B) the qualified business, the primary business's representative and the local business liaison. The local business liaison must be located at the qualified business site.

(2) The applicant. The application must contain the following information and documentation concerning the applicant:

(A) a statement signed by the governing body liaison certifying that the contents of the application are true and correct to the best information and belief of the liaison, and that he or she has read the Act and this chapter and is familiar with the provisions thereof;

(B) a certified copy of the nominating ordinance or order under §176.2(2) [ §176.2(1) ] of this title (relating to Participation in the Program), or if an ordinance or order has already been passed nominating a project for designation, a certified copy of a resolution from the applicant governing body nominating the qualified business for designation as an enterprise project and containing:

(i) nomination of the project or activity as an enterprise project;

(ii) a statement as to whether the project or activity is located in an area designated as an enterprise zone, and, if applicable, that the project is located in an area that is also designated as a defense base development authority established under Chapter 379B, Local Government Code, a federal empowerment zone, a federal enterprise community, or a renewal community;

(iii) reference by number to the nominating ordinance or order indicating participation in the program, with a statement that the local incentives described in the previously issued ordinance or order electing to participate in the enterprise zone program are the same as those made available to the project or activity;

(iv) the active designation period of the project; and

(v) if the project or activity is nominated as a double jumbo enterprise project or a triple jumbo enterprise project, a statement that the designation will count as two or three designations, respectively, against the total number of designations allowed, as applicable.

(C) the block group of the primary business address of the qualified business site, verifiable by the local appraisal district;

(D) the poverty rate for the block group of the primary business address of the qualified business site, or the poverty rate of the distressed county in which the qualified business site is located;

(E) an official census map, which clearly identifies the location of the proposed project and the census area where it is located;

(F) a description of the municipality's or county's procedures and efforts to facilitate and encourage participation by and negotiation between all affected entities in the jurisdiction in which the qualified business is located including a description of the business activity that has occurred in the area within the last year. This description must demonstrate the cooperation among the public and private sectors;

(G) a description of the local effort made by the municipality or county and other affected entities to achieve development and revitalization of the area as described in the Act, §2303.405(c). This includes a brief historical description of the trade and business conducted in the area.

(3) The project. The application must contain the following information and documentation concerning the proposed project:

(A) a statement signed by the primary business representative and the local business liaison certifying that the contents of the application are true and correct to their best information and belief, and that they have read the Act and this chapter and are familiar with the provisions thereof;

(B) a description and introduction of the business applying for the project designation, which includes:

(i) a copy of the articles of incorporation, or the dba statement under which the business operates, filed with the Secretary of State of the State of Texas. The name under which the business is applying for designation must be the same as the business paying state taxes and creating and/or retaining jobs to obtain program benefits;

(ii) the principal owners and history of the business;

(iii) a resolution for corporations or a certificate of authority that provides signatory authority to a person or persons to submit the enterprise project application and sign any contracts or forms on behalf of the business for the enterprise project;

(iv) the number of business locations, total sales, and number of employees in the State of Texas, the United States, and outside the United States;

(v) the federal tax identification number, and/or the Texas Comptroller tax identification number, as applicable, for all participating entities of a controlled group;

(vi) a description of the business' products and services, including NAICS code;

(vii) a description of the business' export history, if applicable; and

(viii) an organizational chart that indicates the business structure, as well as the role of each entity participating in the project;

(C) the plans of the business for expansion, revitalization, and other activity at the qualified business site for the designation period of the project including:

(i) a description of the project location and intended use;

(ii) a summary of short and long-term plans for expansion at the qualified business site;

(iii) the amount of capital investment to be made at the qualified business site during the designation period;

(iv) the status of any required local, state or federal permits or licenses that must be obtained to enable the project to be initiated and completed as represented in the enterprise project application;

(v) a tabular summary of the current number of full-time, part-time [ and seasonal ] jobs which includes the titles and/or Standard Occupational Classification by six-digit code and salary ranges of jobs to be maintained at the qualified business site. Full-time positions will be used for baseline information;

(vi) a tabular summary of the number of new full-time jobs, the titles and/or Standard Occupational Classification by six-digit code and salary ranges of full-time jobs to be created;

(vii) a tabular summary of the number of full-time [ new ] jobs, the titles and/or Standard Occupational Classification by six-digit code and salary ranges of full-time jobs to be retained, if applying for retained job benefit; and

(viii) the total projected annual payroll for the jobs that are being considered for benefit;

(D) commitments from the business that include:

(i) a completed form provided by the Bank, certifying the business as a qualified business;

(ii) a statement from a franchise or subsidiary, if applicable, stating that the business will maintain separate payroll and tax records of the business activity conducted at the qualified business site;

(iii) the percentage of new or additional employees hired to occupy the jobs being claimed for benefit that are residents of any enterprise zone in the state, [ or ] that are economically disadvantaged , or that are veterans ;

(iv) a description of the efforts of the business to develop and revitalize the area as described in the Act, §2303.405(e); and

(v) a statement certifying that the business, or a branch, division, or department of the business, does not and will not knowingly employ an undocumented worker.

(f) Concurrent [ Multiple concurrent ] enterprise project designations. A qualified business that currently has an enterprise project designation may apply for one [ an ] additional enterprise project designation at the same qualified business site. To receive the additional enterprise project designation the governing body must complete an enterprise project application with all of the required nominations and attachments. Additionally, the application must include a breakdown of capital investment and new and/or retained jobs for each designation, clearly delineating what capital investment and jobs will apply to which designation, with timelines for all.

(g) Name change. If the name of a qualified business that has received an enterprise project designation has changed, the Bank may approve the name change for the enterprise project designation. The designated enterprise project must apply for a name change to the Bank no later than 18 months after the enterprise project designation expires, or the business will not be eligible for program benefits. The name change of a project designation by a qualified business does not extend the original designation period, which is applicable to the original and subsequent designee, and which will end on the last day of the original designation period. The receive Bank approval for a name change, the qualified business must submit through the applicant governing body:

(1) a completed Name Change Application, along with a non-refundable cashiers check or money order made payable to Office of the Governor, for a processing fee;

(2) a written explanation by the designee of the reasons for the name change, the date the name change occurred and any changes to the commitments made by the business in the original enterprise project application, if applicable; and

(3) written acknowledgment from the applicant governing body that it is aware of the name change for the project as a qualified business operating at the qualified business site within its jurisdiction.

(h) Assignment or Assumption. The Bank may approve the assignment or assumption of a state-designated enterprise project that has transferred through a sale to another entity that will commit to continue operations at the qualified business site in the way originally committed within the initial enterprise project application, or which otherwise demonstrates to the satisfaction of the Bank that the assignment or assumption is warranted to avoid disruption of operations and loss of jobs. The transfer of a project designation by a qualified business does not extend the original designation period, which is applicable to the original and subsequent designee and which will end on the last day of the original designation period. The designated enterprise project must apply to the Bank, through the appropriate governing body, for designation assignment or assumption no later than 18 months after the enterprise project designation expires, or the business will not be eligible for program benefits. The following must be submitted through the applicant governing body to the Bank:

(1) official action by the governing body in the form of a resolution approving the transfer of the enterprise designation to the purchaser;

(2) a completed Enterprise Project Assignment Application, along with a non-refundable cashiers check or money order made payable to Office of the Governor for a processing fee;

(3) a written relinquishment from the designated project's qualified business to the governing body and Bank to release all claim to the project designation and any benefits represented thereunder and agreeing to the assignment of the designation as of a specific date by the purchaser seeking to assume the designation;

(4) a written certification from the purchaser on a form to be provided by the Bank that the purchaser will be a qualified business under the Act, §2303.402;

(5) a letter of commitment from the purchaser addressed to the governing body and the Bank in the same format as the letter of commitment filed in the original application for project designation by the initial qualified business. The letter should outline any modifications proposed by the purchaser to the original commitments made by the qualified business holding the project designation, including capital investment and jobs to be created or retained, as applicable, and a statement as to why the assignment is essential to their operations at the qualified business site;

(6) a Comptroller of Public Accounts tax identification number and federal tax identification number for the purchaser; and

(7) a copy of the purchasers' articles of incorporation filed with the State of Texas Secretary of State, or the dba statement under which the business operates.

(i) A qualified business may be designated as an enterprise project for no less than one year and no longer than five years. The designation of a qualified business as an enterprise project shall remain in effect during the period beginning on the date of the designation and ending on the earliest of:

(1) the date requested in the application for designation as an enterprise project as indicated in the nominating ordinance, order or resolution, as applicable;

(2) five years after the date the designation is made;

(3) the last day that completes the original project designation period of a qualified business that has assumed the designation of the enterprise project designation through or purchase of a designated qualified business for the purpose of continuing its operations at the applicable qualified business; or

(4) the date the Bank notifies the qualified business and the governing body that the qualified business is not in compliance with any requirement for designation as an enterprise project.

§ 176.5. Monitoring and Reporting Requirements.

(a) Annual reports and certifications.

(1) Governing Body Annual Report. Each municipality or county that participates in the program must submit an annual report to the Bank on or before October 1 of each year. The report must be in a form prescribed by the Bank and contain the information listed in the Act, §2303.205(c). If this report is not received by October 1, the Bank may not designate any additional enterprise projects in the governing body's jurisdiction until such report is received.

(2) Comptroller Annual Report. Not later than the 60th day after the last day of each fiscal year [ No later than October 1 of each year ], the Comptroller will [ shall ] report to the Bank the statewide total of actual jobs created, actual jobs retained and the tax refunds and credits made under this section during the previous fiscal year as required by the Act.

(3) Program Annual Report. The information in the governing body annual report, as well as the Comptroller annual report will be used by the Bank to compile an annual report on the program to the governor, legislature and the Legislative Budget Board by January 1 as required by the Act.

(b) Other reports or documents.

(1) Governing Body Designated Project Status Report. The nominating body shall submit a report to the Bank and Comptroller, conducted at the completion of the enterprise project designation period monitoring the qualified business to determine whether the business or project has followed through on any commitments or goals made in the application for enterprise project designation. This information may also be provided through the Governing Body Annual Report.

(2) Qualified Business Benefit Request Status Report. At the time of submittal of a request for a state tax benefit, the qualified business must provide a certified report to the Comptroller of the actual amount of capital investment, as well as the actual number of new and/or retained jobs by category and title.

(3) Additional Information as requested. The applicant shall furnish additional information, reports or statements as the Bank from time to time may request in connection with the Act and this chapter.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 21, 2025.

TRD-202501293

Adriana Cruz

Executive Director

Office of the Governor, Economic Development and Tourism Office

Earliest possible date of adoption: June 1, 2025

For further information, please call: (512) 463-2000