1 / 40

Virginia Enterprise Zone Program

Virginia Enterprise Zone Program . June 1, 2007. Outline of Presentation.

ojal
Download Presentation

Virginia Enterprise Zone Program

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Virginia Enterprise Zone Program June 1, 2007

  2. Outline of Presentation • Purpose - The purpose of this presentation is to provide an overview of the Virginia Enterprise Zone program for localities that may not be familiar with it. A PowerPoint presentation with the details of the actual designation application will be available at the How-to-Apply workshops. • Program Overview • Incentives • State and Local Roles & Responsibilities • Designation Amendment Procedures

  3. Program Overview

  4. Overview: Enterprise Zones • Enterprise Zone • Geographical area of county, city, or town designated by the Governor for 10-20 years. • First established by General Assembly in 1982 (Virginia Enterprise Zone Act) • State & local government partnership • Means to stimulate job creation, private investment, and revitalization.

  5. Enterprise Zones

  6. EZ Statute 2005 • July 1, 2005: General Assembly passed Enterprise Zone Grant Act • Transitioned program from tax credits incentives to grants: • Job Creation Grant • Real Property Investment Grant

  7. Incentives

  8. State Incentives • New performance based grants: • Job Creation Grant • Real Property Investment Grant • Click below for summary chart on State incentives http://www.dhcd.virginia.gov/CommunityDevelopmentRevitalization/PDFs/vez_state_incentives.pdf

  9. Job Creation Grant • Encourages the creation of higher quality jobs • Eligible positions: • Net new to Virginia • Over 4 job threshold • Permanent full-time • Pay at least 175% of Federal minimum wage • Provide health benefits

  10. Job Creation Grant: Amount • Based on wages paid for the position • For businesses providing health benefits & • Pay at least 175% of Federal minimum wage ($9.01/hour) • Up to $500/position per year • Pay at least 200% of Federal minimum wage ($10.30/hour) • Up to $800/position per year

  11. Job Creation Grant: Term • Capped at 350 positions annually • Available for 5-consecutive year term • Restrictions: • Retail, personal service, or food and beverage positions • Units of local, state, or federal government

  12. Job Creation Grants: Application Materials • Zone verification • Payroll documentation • W-4 • First and last payroll records for base and/or grant • year • Health benefits information • Part of position’s premium paid by employer • Health insurance waivers for those declining firm’s insurance • W-9 • CPA’s Attestation Report

  13. Real Property Investment Grant • Based on qualified real property investments made by individual/entity to commercial, industrial, or mixed-use* buildings in Enterprise Zones • Applicant: Zone Investor • Owner • Owner of space* • Tenant* • Developer * Supplemental application material

  14. Real Property Investment Grant: Amount • Eligibility thresholds based on type of investment: • $50,000 for rehab or expansion • $250,000 for new construction • Up to 20% of total cost of qualified real property investment

  15. Real Property Investment Grant: Term • Capped per building/facility • Investments less than $5 Million: $125,000 per building or facility • Investments of $5 Million or more: $250,000 per building or facility • 5-consecutive year term • Restrictions: • Units of local, state, or federal government

  16. Qualified Real Property Investment

  17. CPA’s Attestation Report • Code requires that an independent CPA licensed in VA perform the agreed upon procedures established by DHCD and report on findings in EZ grant applications to DHCD

  18. Enterprise Zone Grant Deadlines

  19. Grant Awards and General Limitations • Funds allocated annually by General Assembly • $16.5 million in grants available grant year 2006 • Should requests exceed grants allocated, all qualified requests will be pro-rated • Pro-ration was 61 percent for the 2005 grant year

  20. Local Incentives

  21. Local Incentives • Crucial part of program’s success • Means to create an improved climate for private business development & expansion

  22. Local Incentives • Consistent with local revitalization and development goals (overcoming barriers to business operations) • Local government may propose any type of incentive permissible under Federal and State Law (as long as zone specific)

  23. Local Tax Incentives • Dos and Don’ts • Constitutionality is a must! • Article 10, Section 1, Uniformity Clause: • Taxation has to be uniform in territory, subject, class • “Territory” refers to entire locality

  24. Local Tax Incentives • Dos and Don’ts (cont.) • Applies to “property” type taxes – real estate, machinery & tools • Unless expressly allowed by the GA, like 58.1-3220 & 3221; or • As a grant, typically thru an IDA, for machinery & tools tax • Do not use words abatement, refund, rebate

  25. Local Tax Incentives • Dos and Don’ts (cont.) • Uniformity does not apply to BPOL, utility tax, permit fees • Rebates, refunds, abatement are allowed

  26. Local Incentives • Partial exemption for substantially rehabilitated real estate (58.1-3221, VA Code) • Grants based on the value of machinery & tool tax • Architectural assistance – grants, design • Reduced permit and user fees • Special rates for BPOL tax

  27. Local Incentives • Special zoning districts (e.g., parking) • Fast-track permitting • Exemptions from local ordinances • Infrastructure improvements • Crime reduction measures (security audits; assistance w/purchase cost)

  28. Local Incentives • Quality vs. quantity • Measurable and effective • Should represent sound fiscal policy

  29. Roles & Responsibilities

  30. State Role & Responsibility • Annual site visit • Confer with you and your clients on state qualification, on-site and via phone • Review & advise on amendments to boundaries or incentives • Provide periodic administrator meetings • Participation in local workshops and zone promotion

  31. Zone Assessment • Means to evaluate level of participation, success, and value of zone • Offer more targeted technical assistance • Considerations • INCENTIVES! • Local utilization • State utilization • Physical appearance of zone • Marketing efforts • Number of stakeholders involved

  32. Local Responsibilities • Program performance evaluation: • Data Collection • Incentive utilization • Private Sector Investment • Public Sector Investment • Submit an Annual Report to DHCD (July) • Discusses zone activity and is the basis for an annual report to the General Assembly. Click below to view a copy of the report. www.dhcd.virginia.gov/CommunityDevelopmentRevitalization/Word/VEZ_%20Annual_Program_Report.doc • Annual site assessment visits with DHCD staff

  33. Local Responsibilities • Process/Management Structure for: • Zone administration and local incentive promotion • What departments are involved and what are their roles • Compilation of comprehensive list of addresses & businesses within zone • State Incentives promotion • Meet state requirements • Attend how-to-qualify workshops • Respond to questions about state incentives • State grant forms and applications • Zone Marketing

  34. Zone Characteristics: Size Guidelines Cities: • Minimum of 1/4 square mile (160 acres) • Maximum of 1 square mile (640 acres); • Or, 7 percent of the jurisdiction’s land area or population, whichever is largest

  35. Zone Characteristics: Size Guidelines Consolidated Cities: • Minimum of 1/2 square miles (320 acres) • Maximum of 6 square miles (3,840 acres) • Hampton, Newport News, Richmond, Suffolk, Virginia Beach

  36. Zone Characteristics: Size Guidelines Counties: • Minimum of 1/2 square mile (320 acres) • Maximum of 6 square miles (3,840 acres)

  37. Zone Characteristics: Size Guidelines Unincorporated Areas of County: • Minimum of 1/2 square mile (320 acres) • Maximum of 6 square miles (3,840 acres)

  38. Zone Characteristics: Zone Configurations • Joint zones – an enterprise zone located in two or more jurisdictions (cities or counties). • Each locality’s portion of the joint zone can consist of up to three non-contiguous geographic areas relative to that locality. • One of the locality’s three possible zone areas must be contiguous to at least one other participant’s zone area as part of the joint application.

  39. Zone Characteristics: Size Configurations • Single zone – an enterprise zone located entirely within a single jurisdiction (city or county). A county zone including areas within incorporated town limits is considered part of the county’s zone acreage and constitutes a single zone. • EXAMPLE: Smyth County applies for a single zone designation. A portion of the proposed zone includes part of Marion’s town limits. The acreage within the town limits counts towards Smyth County’s zone acreage. The town is not required to offer incentives (but can) and is considered part of the county’s zone. County limits Portion of town limits in County’s single zone County EZ boundaries Town limits

  40. Zone Characteristics: Size Configurations Example of a Joint Zone Configuration Locality One Locality Three Contiguous joint zone areas Non-contiguous zone areas (3 per locality) Locality Two

More Related