Texas operates a multi-layered economic development system that spans the Governor's Office, state agencies, regional councils, local economic development corporations, and federal partnerships. This guide covers the major economic development programs available to Texas businesses and explains how the system is structured.
State-Level Economic Development Programs
Texas Enterprise Fund (TEF)
The Texas Enterprise Fund is the state's premier deal-closing fund. Administered by the Governor's Office, TEF provides cash grants to businesses that commit to creating jobs and making capital investments in Texas. Awards are negotiated on a project-by-project basis and include clawback provisions if job creation targets are not met. TEF is typically used for large-scale relocation and expansion projects.
Skills Development Fund
Administered by the Texas Workforce Commission, the Skills Development Fund provides grants to businesses for customized workforce training delivered through partnerships with public community and technical colleges. The program helps businesses train new hires and upskill existing employees. Grants cover training costs and may include curriculum development expenses.
Texas Capital Fund
The Texas Capital Fund, administered by the Texas Department of Agriculture, provides grants to non-entitlement cities and counties for infrastructure improvements that support business development. Programs include infrastructure development, main street improvements, and real estate development assistance, primarily targeted at rural communities.
Product Development and Small Business Incubator Fund
Administered through the Texas Economic Development Bank, this program provides financial assistance for early-stage product development and business incubation. It supports technology commercialization and new product development by Texas businesses.
Enterprise Zone Program
The Texas Enterprise Zone Program provides state sales and use tax refunds to businesses that create jobs in economically distressed areas. Zones are nominated by local governments and approved by the state. Refunds are based on job creation performance within the zone.
Regional and Local Economic Development
Economic Development Corporations (EDCs)
Many Texas cities and counties have created economic development corporations funded by dedicated sales tax revenue. Type A EDCs focus primarily on manufacturing and industrial development. Type B EDCs have broader authority to fund community development, infrastructure, parks, and quality-of-life projects that support business attraction and retention. EDCs are major players in local incentive negotiations.
Councils of Government (COGs)
Texas has 24 regional councils of government that coordinate planning and administer federal and state programs for their member jurisdictions. COGs manage economic development planning, workforce development grants, infrastructure funding, and regional coordination. They serve as an important conduit for federal Economic Development Administration (EDA) funding.
Property Tax Abatements
Under Chapter 312 of the Texas Tax Code, cities and counties can offer property tax abatements to businesses making qualifying investments. Abatements typically cover 5-10 years and apply to the increase in property value from new construction or improvements. Most jurisdictions publish abatement guidelines with minimum thresholds.
Tax Increment Reinvestment Zones
TIRZs capture growth in property tax revenue within designated areas and reinvest it in public improvements. They are used extensively in Texas cities to fund infrastructure, streetscape improvements, and development incentives within targeted districts.
Federal Economic Development Resources
Economic Development Administration (EDA)
The EDA funds infrastructure, planning, and economic adjustment projects across Texas. EDA grants typically flow through regional development organizations and local governments rather than directly to individual businesses.
USDA Rural Development
USDA Rural Development operates multiple programs for rural Texas communities, including Rural Business Development Grants, Business and Industry Loan Guarantees, and the Rural Energy for America Program. See our guide to rural business grants.
Opportunity Zones
Federal Opportunity Zone designations are found across Texas, providing capital gains tax incentives for investments in economically distressed communities. While the incentive goes to investors rather than businesses directly, the capital flows into communities and can support business development.
Workforce Development Programs
Workforce development is a key component of Texas economic development:
- Skills Development Fund: Customized training grants through community colleges
- JET Grants: Jobs and Education for Texans grants for equipment purchases at educational institutions
- WIOA Programs: Federal workforce training programs administered through local workforce boards
- Apprenticeship Texas: Support for registered apprenticeship programs
See our workforce training grants guide.
How to Navigate the System
The Texas economic development system involves multiple agencies, levels of government, and program types. Most businesses are eligible for programs at the local, state, and federal level simultaneously. Our free screening report checks your business against 150+ verified programs and shows you which ones may match. Start your free screening →