The Texas Enterprise Fund (TEF) is the state's largest deal-closing fund. It is administered by the Office of the Governor and is used as a financial incentive to attract businesses to Texas or encourage significant expansions by existing Texas businesses. The fund has been operational since 2003 and has awarded hundreds of millions of dollars across a range of industries.
This guide explains how the Texas Enterprise Fund works, who qualifies, how awards are determined, and what businesses should understand before pursuing a TEF award.
How the Texas Enterprise Fund Works
TEF operates as a deal-closing fund, meaning it is typically offered when Texas is competing with other states for a specific business project. The fund is not a general-purpose grant program that businesses apply for independently. Instead, projects are typically referred to the Governor's office through local economic development organizations, the Texas Economic Development Corporation, or legislative offices.
Awards are structured as performance-based grants tied to specific commitments for job creation, capital investment, and community impact. Payments are typically made over multiple years as the business meets its milestones.
Eligibility and Selection Criteria
TEF awards are discretionary. The Governor, Lieutenant Governor, and Speaker of the House must all agree on each award. Projects are evaluated based on:
- Number and quality of jobs to be created
- Average wages relative to the local labor market
- Amount of capital investment
- Economic impact on the local community
- Whether Texas is competing with another state for the project
- The financial strength and track record of the applicant
- Local community support and matching incentives
What TEF Awards Look Like
TEF awards vary significantly in size depending on the project. Past awards have ranged from under $1 million for smaller projects to tens of millions of dollars for major corporate relocations and manufacturing expansions. The award amount reflects the projected economic impact and the competitive pressure from other states.
Performance Requirements and Clawbacks
TEF agreements include specific performance benchmarks that must be met for the business to retain its award. Common requirements include:
- Minimum number of jobs created within a defined timeframe
- Minimum average wage levels for created jobs
- Minimum capital investment amounts
- Maintaining operations in Texas for a specified period
If a business fails to meet its performance obligations, the state can require repayment of all or a portion of the award. The Governor's office publishes annual reports on TEF performance, including any clawback actions.
Industries That Have Received TEF Awards
TEF awards have been made across many industries, including manufacturing, technology, aerospace and defense, life sciences, energy, financial services, and corporate headquarters. The program is industry-agnostic but tends to favor projects with significant employment and capital investment commitments.
How to Pursue a TEF Award
- Work with local economic development: Contact your local economic development corporation or chamber of commerce. Most TEF projects are initiated through local partners who refer the project to the state.
- Engage the Governor's Economic Development and Tourism Division: The state's economic development team evaluates projects and coordinates with local communities.
- Prepare a detailed project proposal: Include job creation numbers, wage levels, capital investment plans, timeline, and the competitive landscape.
- Demonstrate community support: Local matching incentives, such as Chapter 380 agreements or tax abatements, strengthen a TEF application.
Find Programs That May Fit Your Business
The Texas Enterprise Fund is reserved for significant economic development projects. Most Texas businesses benefit more from programs like workforce training grants, tax credits, SBA financing, and local incentives. Understanding your full range of options helps you build a complete incentive package.
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