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Corporate Recruitment and Incentives

The mission of Corporate Recruitment and Incentives (CRI) is to
“increase the number of quality jobs in Utah by helping existing companies expand and by recruiting new companies to the State.”

Financial incentives are available for business relocation and expansion for select companies that create new, high-paying jobs to help improve the standard of living, increase the tax base, attract and retain top-level management, and diversify the state economy. Incentives are offered as either tax credits or grants.

The incentive amount and duration is decided by the GOED board and executive director based on statutory guidelines and evaluation criteria including the financial strength of the company, the number and salary of jobs created, amount of new state tax revenue, long-term capital investment, competition with other locations and whether the company is a headquarters or in a targeted cluster.

Incentives are based on the following “three pillars of success and sustainability”:

1. Post-performance — Incentives are disbursed after the company has met contractual performance benchmarks, such as job creation and payment of new state taxes.

2. Single Taxpayer — Incentive amounts are based on new state taxes generated by the project.

3. Competition — Incentives must make Utah competitive with other locations.

Links to Incentive Reports

Incentive Reports from 2006 to 2013

Renewable Energy Development Incentive (REDI), U.C.A. 63M-1-2800

A post-performance refundable tax credit for up to 100% of new state revenues (state corporate/partnership income, sales and withholding taxes) over the life of the project (up to 20 years) for renewable/alternative energy generation and related manufacturing.

Private Activity Bond Authority, U.C.A 63M-1-3001

The Private Activity Bond Authority Review Board is charged with managing the State’s volume cap for the following programs: Private Activity Bond Authority Program (PAB), and the Qualified Energy Conservation Bond Program (QECB).

PAB is Utah’s tax-exempt bonding authority for creating a lower-cost, long-term source of capital under the Federal Tax Act of 1986. QECBs are taxable bonds issued for “qualified conservation purposes.”

Utah Recycling Market Development Zones, U.C.A. 63M-1-1103

Businesses within a Recycling Zone can claim state income tax credits of 5% on the investment in eligible equipment for the handling and/or consumption of recycled materials.

Currently recycling zones are located in 20 of the 29 counties Fifty companies within these zones have invested over $354 million in machinery and equipment since 1997. In 2012, 12 companies have invested over $13.7 million and during 2011, 24 companies invested $40.3 million and during 2010, 16 companies invested $24.1 million. Total to date employment gain in FY2013 was 158 employees.

Life Science and Technology Tax Credits, U.C.A. 63M-1-2910

Life science and technology companies generating new state revenues are eligible for a post-performance refundable tax credit of up to the amount of new state revenues generated over three years. Investors in a Utah life science company are eligible for a non-refundable, post-performance tax credit of up to 35% of their investment, paid over three years.

During 2011, GOED awarded four companies a total of $1M in tax credits to be distributed over three years. 2013 was the second year to measure economic impact; the new projects associated with the tax credits resulted in the creation of 59 jobs during 2012 and 2013. During 2013, GOED awarded $204,750 in post-performance tax credits to be distributed over three years, for ten investors to invest in three life science companies.

Alternative Energy Development Tax Credit,

U.C.A. 63M-4-501, 505

As of this date no companies have applied for nor have any tax credits been issued. We expect the first tax credits to be applied for in the coming year.

Funds for employee training may be available The State Legislature appropriated Job Growth Funds during the 2010 General Session to be used by DWS for workforce development and labor exchange activities.

Since the 2010 General Session, the Utah State Legislature has continued to authorize the use of these funds. Workforce development includes job creation, job retention, and job training.

For state fiscal year 2013 (July 1, 2012 – June 30, 2013) DWS has paid out $334,216[1] of the Job Growth Training Fund to GOED.

The funds are to be used by GOED in their employer recruitment efforts and are specific to assisting companies with their training of incumbent, or new, employees.

The training curriculums may be based in-house or hosted by an external education institution by both existing and new companies in the State of Utah. [1] Funding is not tied to individual income or asset restrictions. The funding is to be used as deemed appropriate by GOED in concert with existing Utah, or new to Utah, employer requesting the funding.

Economic Development Tax Increment Financing (EDTIF), U.C.A. 63M-1-2406, 2407

An EDTIF is a post-performance incentive with a maximum cap tax credit that can be up to 30% of the state corporate income, sales and withholding taxes paid by the company over a maximum 20 year term. Each year as the company meets the criteria in its contract with the state, it may earn a portion of the tax credit incentive.

FY2013 Summary:

• Sum of Contracted Jobs from 2006 to 2013: 19,105
• Jobs created to date by aggregate from 2006 to 2013: 11,933 or 62.4%

Total EDTIF Commitments (balances of contractually obligated incentive payments):

• Cash rebates $95,410,849 representing 3 companies
• Tax credits $560,739,737 representing 82 companies

Actual Partial Rebates for FY2013:
• 2 projects with actual payouts totaling $1,492,784

Actual Tax Credits for FY2013:

• 44 projects with actual tax credits totaling $11,365,913

Industrial Assistance Fund (IAF), U.C.A. 63M-1-901, 909

The State Industrial Assistance Fund (IAF)is a post-performance appropriated fund for the creation of high paying jobs in the state.

This incentive can be earned as Utah jobs created meet the IAF requirements resulting in higher quality jobs, and occasionally for specific “economic opportunities” that have significant economic impact on the state depending on the amount of purchases made in Utah and the economic impact associated with the project.

Total IAF Commitments (balances of contractually obligated incentive payments):

• Standard IAF $8,271,600 representing 30 companies

• Rural Fast Track Program commitments $1,535,647 representing 58 organizations
• Economic Opportunity $3,882,367 representing 8 companies

• 3 projects with actual payouts totaling $353,000
• 10 projects with actual tax credits totaling $404,696
• 2 Economic Opportunities with actual payouts totaling $540,715

Aggregate Total of Offered Incentives from 2006 to 2013

• From 2006 to 2013 the State incented the creation of 19,105 jobs. • To date the incented companies have created 11,933 or 62.4% of the committed jobs. • From 2006 to 2013 the State committed to issue tax credits to the companies who earn credits over the 10 year average term of their commitments, totaling $810,277,207. • Since 2006 the aggregate incentives, which have been claimed by the companies who have created jobs, is $58,901,449 or 7%.