The Texas Enterprise Fund (TEF) is the state’s premier deal-closing fund, used by the Governor’s Office to attract and retain major business investments in Texas. As a discretionary grant program, TEF provides direct financial incentives to companies that commit to substantial job creation and capital investment in the state. In 2026, the program continues to play a central role in Texas economic development, particularly for manufacturing, technology, headquarters relocations, and other large-scale projects.
How the Texas Enterprise Fund Works
TEF operates as a deal-closing fund rather than an open application program. This means that companies do not apply through a standard process. Instead, TEF awards are negotiated between the company, the Governor’s Office, local economic development organizations, and the Texas Economic Development and Tourism Office. Awards are tied to binding performance agreements that require the company to meet specific job creation and capital investment milestones. See our complete TEF guide.
2026 Award Activity
TEF awards in 2026 continue to reflect the state’s competitive position for attracting large employers. Key trends include:
- Manufacturing expansion: Several manufacturing projects have received or are in negotiation for TEF support, particularly in advanced manufacturing, semiconductors, and defense-related production.
- Corporate headquarters: Companies relocating or expanding headquarters operations in Texas continue to receive TEF consideration, especially when the project involves significant high-wage job creation.
- Data center investments: The growth of data center development in Texas has generated TEF interest, particularly for projects with substantial job counts and capital investment.
- Life sciences: Biotechnology and medical device companies expanding in Texas represent a growing share of TEF activity.
Award Structure
TEF awards are structured as performance-based grants with clawback provisions:
- Grant amounts: Awards vary widely based on project size, typically ranging from several hundred thousand dollars to tens of millions of dollars for the largest projects.
- Performance requirements: Each agreement specifies minimum job creation numbers, wage levels, capital investment thresholds, and timelines for achievement.
- Clawback provisions: If the company fails to meet its performance commitments, it must repay all or a portion of the TEF grant. These provisions are legally binding and have been enforced in past agreements.
- Wage requirements: TEF projects typically require wages at or above the county average wage for the project location.
Eligibility Considerations
TEF is not available to all businesses. The program targets companies that are considering Texas alongside other states or countries for a major project. Key eligibility factors include:
- The project must involve significant job creation (typically 50 or more new jobs)
- The company must demonstrate that Texas is competing with other locations for the project
- The project must represent a substantial capital investment
- Local community support must be demonstrated, usually through matching local incentives
- The company must have a strong financial position and track record
How to Pursue TEF
- Contact your local EDC: Economic development corporations at the city and county level are typically the entry point for TEF discussions. They can connect you with the Governor’s Office.
- Prepare a project summary: Document the projected job count, wage levels, capital investment, timeline, and the competitive sites being considered.
- Engage early: TEF negotiations take time. Engage with local and state economic development contacts well before your final site selection deadline.
Complementary Programs
TEF is often combined with other state and local incentive programs:
- Chapter 380/381 agreements from cities and counties
- Property tax abatements under Chapter 312
- Skills Development Fund training grants
- Enterprise Zone state sales tax refunds
Screen Your Business
While TEF targets large projects, our screening report identifies all federal, state, and local programs that may match your business, including workforce training grants, tax credits, and lending programs available to companies of all sizes. Start your free screening →