SUBJECT: A resolution to approve the assignment of the Cyberonics, Inc., located at 100 Cyperonics Blvd., Houston TX 77058, as an Enterprise Project status to LivaNova USA, Inc.
RECOMMENDATION: (Summary): A resolution to approve the assignment of the Cyberonics, Inc. enterprise project status to LivaNova USA, Inc.
SPECIFIC EXPLANATION:
The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment. A State Enterprise Zone is any census tract block group that has a 20% or higher poverty rate, as determined by the U.S. Census Bureau during each decennial census.
State law requires a municipality or county to nominate a project of a qualified business for designation as an Enterprise Project to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium; the City is limited to a maximum of 9 project designations. Chapter 2303 of the Texas Government Code grants municipalities the authority to nominate projects located within their extraterritorial jurisdiction (ETJ).
Enterprise Projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of a refund is based on the capital investment and jobs created or retained at the qualified business site. Depending on the investment amount, there is a refund to the company of $2,500 and up to $7,500 per job.
In 2013, the City of Houston passed Resolution No. 2013-21 which nominated Cyberonics, Inc. as an enterprise project based on its location within a Texas Enterprise Zone. The company is located at 100 Cyberonics Blvd., Houston, TX, 77058. An Enterprise Zone is any census tract block group that has a 20% or more poverty rate, as determined by the U.S. Census Bureau during each decennial census.
In 2015, Houston-based Cyberonics Inc. completed its merger with Italy-based Sorin SpA. The merged medical technology companies created a new entity, called LivaNova PLC and LivaNova USA, Inc. is the legal name for the business unit that was formerly operating under the name Cyberonics Inc. There is approximately 1 year remaining of the 2013 approved Texas Enterprise Zone Program benefit for Cyberonics Inc. and the City of Houston must pass a resolution assigning the enterprise project status and benefits of Cyberonics, Inc. to LivaNova for it to receive the remainder of its sales and use tax refund.
The Enterprise Zone benefits will transfer under the current designation that was given to Cyberonics, Inc. and the designation period will remain the same (September 3, 2013 through September 3, 2018). The assignment will not require the City to use any of its nine allocated nominations.
LivaNova USA is a medical technology company with core expertise in neuromodulation. The company developed and markets the Vagus Nerve Stimulation Therapy System, which is FDA-approved for the treatment of refractory epilepsy and treatment-resistant depression.
cc: Marta Crinejo, Agenda Director
Anna Russell, City Secretary
Ronald Lewis, City Attorney
Kim Mickelson, Senior Assistant City Attorney