The Texas Enterprise Fund (TEF) is the state's largest deal-closing grant program, and manufacturing companies have historically been among its primary beneficiaries. Administered by the Office of the Governor, TEF provides performance-based cash grants to businesses that commit to creating jobs and investing capital in Texas.
This guide explains how TEF works specifically for manufacturers, what the program looks for in manufacturing applicants, and how to position your company for a successful application.
How TEF Works for Manufacturers
TEF is a "deal-closing" fund, meaning it is designed to tip the scales when a company is deciding between Texas and a competing state for a new facility, expansion, or relocation. For manufacturers, this typically means the company is evaluating multiple states for a new production facility, distribution center, or major expansion of existing operations.
Awards are negotiated directly with the Governor's Office and are tied to specific performance commitments — primarily job creation targets and capital investment thresholds. Manufacturing projects are well-suited to TEF because they tend to create large numbers of jobs and require significant capital investment in facilities and equipment.
What TEF Looks for in Manufacturing Projects
Job Creation
TEF awards are heavily weighted toward job creation. The program looks for projects that will create a meaningful number of new, permanent, full-time positions. For manufacturing applicants, this includes production workers, quality control staff, maintenance technicians, engineers, and management positions. Projects creating 50 or more jobs are generally competitive, though larger projects creating hundreds of positions may receive proportionally larger awards.
Capital Investment
Manufacturing projects naturally involve substantial capital investment in land, buildings, and equipment. TEF evaluates the total investment a company plans to make in Texas, including facility construction or renovation, production equipment, and infrastructure. Manufacturing projects involving tens of millions of dollars in capital expenditure are typical TEF candidates.
Wage Levels
TEF considers the average wages associated with the new positions. The program favors projects where wages meet or exceed the prevailing average wage for the region. Manufacturing positions that pay above the regional average — such as advanced manufacturing, aerospace components, or semiconductor fabrication — are particularly competitive.
Community Support
TEF typically requires demonstrated support from local government. This means the city or county where the manufacturing facility will be located should be prepared to provide matching incentives such as property tax abatements, infrastructure improvements, or Chapter 380 grants. A strong local support package strengthens the TEF application significantly.
Manufacturing Sectors That Have Received TEF Awards
TEF has awarded grants across a range of manufacturing sectors, including:
- Advanced manufacturing: Companies producing high-precision components, electronics, and industrial equipment
- Automotive and aerospace: Vehicle assembly, parts manufacturing, and aerospace component producers
- Food and beverage manufacturing: Large-scale food processing and packaging operations
- Chemical and plastics: Chemical production, polymer manufacturing, and specialty chemical producers
- Semiconductor and electronics: Chip fabrication, circuit board assembly, and related supply chain manufacturing
- Building materials: Concrete, steel, glass, and other construction material manufacturers
How to Apply
- Establish a competitive situation: TEF is designed for companies considering Texas against other states. Your application should demonstrate that your company is actively evaluating at least one other location.
- Engage your local economic development organization: Local EDOs can facilitate introductions to the Governor's Office and help assemble the local incentive package that typically accompanies a TEF application.
- Prepare a detailed project plan: Include projected job creation timelines, capital investment amounts, wage levels, facility specifications, and economic impact estimates.
- Negotiate terms: TEF awards are negotiated, not applied for through a standard form. The Governor's Office will evaluate your project and propose terms based on the expected economic impact.
Stacking TEF with Other Manufacturing Incentives
TEF works best as part of a layered incentive package. Manufacturers should also evaluate:
- Skills Development Fund: State-funded workforce training for your new employees through community college partnerships. See our guide to the Skills Development Fund for manufacturers.
- Manufacturing equipment sales tax exemption: Texas exempts manufacturing machinery and equipment from sales and use tax.
- Freeport Exemption: Property tax exemption on inventory held in Texas for 175 days or fewer before shipping out of state.
- Local property tax abatements: Many Texas cities and counties offer abatements on new facility construction. Full guide to manufacturing grants in Texas.
- JETI Act property tax limitations: For large capital projects, the Texas Jobs, Energy, Technology & Innovation Act may provide additional property tax savings.
TEF Award Sizes for Manufacturing
TEF awards vary significantly based on project size. Manufacturing awards have historically ranged from several hundred thousand dollars for mid-size operations to tens of millions of dollars for major facility investments. The award amount is negotiated based on the projected economic impact, job creation, capital investment, and competitive pressure from other states.
All TEF awards include clawback provisions — if the company fails to meet its job creation and investment commitments, it must return a portion or all of the grant.
Bottom Line
TEF is a powerful tool for manufacturers planning major investments in Texas, but it is not a program you can simply apply to online. Success requires a genuine competitive situation, strong local support, and a project that creates significant jobs and capital investment. If your manufacturing company is evaluating Texas for a new facility or major expansion, TEF may be one of the most valuable incentives available.
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