Contracts
Collaboration Agreements are Mandatory:
To access the new tax exemptions and development incentives, your commercial operations must be legally tied to Texas Tech University.
- Action: If you are a defense contractor or manufacturer at Reese, you must execute a Memorandum of Understanding (MOU) or Research Agreement with TTU. A standard lease with the Authority is no longer sufficient to trigger these specific benefits.
Hiring/Training
Board Interaction:
The Authority’s Board of Directors now requires members with expertise in national security and critical infrastructure.
- Action: Brief your government relations team. Your proposals to the Board must now be technical and aligned with federal defense priorities (DoD, DOE, DHS) rather than general municipal economic development.
Reporting & Record-Keeping
Tax Exemption Documentation (Burden of Proof):
The law grants a presumption that certain property is in "interstate commerce" (tax-exempt) only if you can prove it is held for a "temporary period" before incorporation into a final product.
- New Requirement: You must maintain a "Bill of Materials" trace for all inventory located at the Authority.
- Required Evidence: You must be able to produce:
- 1. A contract showing the final product is for national security or critical infrastructure.
- 2. Proof of collaboration with TTU regarding that specific product.
- 3. Shipping manifests demonstrating the inventory moves out of Texas or to a federal entity.
Fees & Costs
Tax Savings:
- Inventory Tax: Tangible personal property (parts, raw materials, commercial aircraft under development) meeting the criteria is now exempt from ad valorem taxation.
- Lease Costs: No statutory increase in fees, but the Authority is now empowered to prioritize "income-producing" projects, which may tighten negotiation leverage for non-defense tenants.
