SEARCH SITE
VIRGINIA LAW PORTAL
- Code of Virginia
- Virginia Administrative Code
- Constitution of Virginia
- Charters
- Authorities
- Compacts
- Uncodified Acts
- RIS Users (account required)
SEARCHABLE DATABASES
- Bills & Resolutions
session legislation - Bill Summaries
session summaries - Reports to the General Assembly
House and Senate documents - Legislative Liaisons
State agency contacts
ACROSS SESSIONS
- Subject Index: Since 1995
- Bills & Resolutions: Since 1994
- Summaries: Since 1994
Developed and maintained by the Division of Legislative Automated Systems.
2005 SESSION
052721108Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Title 2.2 a chapter numbered 51.1, consisting of sections numbered 2.2-5105 through 2.2-5108, as follows:
§ 2.2-5105. Short title; definitions.
A. This chapter shall be known and may be cited as the "Virginia Economic Development Incentive Act."
B. As used in this chapter, unless the context requires a different meaning:
"Act" means the Virginia Economic Development Incentive Act.
"Basic employment" means employment that brings mostly new or additional income into Virginia and adds to the gross state product.
"Capital investment" means investment in real property, personal property, or both, at a facility within the Commonwealth that is capitalized by the company. Expenditures for maintenance, replacement, or repair of existing machinery, tools and personal or real property shall not constitute a capital investment; however, expenditures for the replacement of property shall not be ineligible for designation as a capital investment if such replacement results in a measurable increase in productivity.
"Eligible company" means, for companies located in an Metropolitan Statistical Area with a population of 300,000 or more in the 2000 census, a Virginia employer that creates or causes to be created at least 400 jobs with average salaries at least 50 percent greater than the Prevailing Average Wage, and makes a capital investment of at least $5 million or $6,500 per job, whichever is greater. For all companies located elsewhere in Virginia, “eligible company” shall mean a Virginia employer that creates or causes to be created at least 200 jobs with average salaries at least 50 percent greater than the Prevailing Average Wage, and making a capital investment of at least $6,500 per job.
"Fund" means the Virginia Economic Development Incentive Fund, created pursuant to § 2.2-5106.
"Net present value of benefits to Virginia" means the present value of the amount by which the anticipated additional state tax revenue is expected to accrue to the Commonwealth as a result of the capital investment and jobs created, over a period following the completion of the capital investment not to exceed 20 years, exceeds the value of all incentives provided by the Commonwealth, including any grant under this chapter, for such capital investment during that period.
"New job" means employment of an indefinite duration at the eligible facility, created as the direct result of the present project, for which the standard fringe benefits are paid by the firm for the employee, requiring a minimum of either (i) 35 hours of an employee's time per week for the entire normal year of the firm's operations, which "normal year" must consist of at least 48 weeks or (ii) 1,680 hours per year. Seasonal or temporary positions, positions created when a job function is shifted from an existing location in the Commonwealth to the facility, and positions with suppliers, and similar multiplier or spin-off jobs shall not qualify as new jobs under this chapter.
"Partnership" means the Virginia Economic Development Partnership.
"Prevailing Average Wage" means that amount determined by the Virginia Employment Commission to be the average wage paid workers in the city or county of the Commonwealth where the eligible company is located.
"Secretary" means the Secretary of Commerce and Trade.
§ 2.2-5106. Virginia Economic Development Incentive Fund.
A. There is established a special fund in the state treasury to be known as the Virginia Economic Development Incentive Fund (the Fund). The Fund shall consist of such moneys as may be appropriated by the General Assembly and designated for the Fund, constituting a “sinking fund” that includes some proportion of the marginal revenues derived by the Commonwealth and attributable to the projects for which eligible companies received grants under this Act. The Fund shall be used solely for the payment of economic development incentive grants to eligible Virginia companies pursuant to this chapter. The Partnership shall administer the Virginia Economic Development Incentive Fund.
B. The Partnership shall allocate from the Fund moneys in the following order of priority: (i) unpaid grant amounts carried forward from prior years because eligible companies did not receive the full amount of any grant to which they were eligible in a prior year and (ii) other approved applicants. If the moneys in the Fund are less than the amount of grants to which approved applicants in any class of priority are eligible, the moneys in the Fund shall be apportioned pro rata among eligible applicants in such class, based upon the amount of the grant to which an approved applicant is eligible and the amount of money in the Fund available for allocation to such class.
C. If a grant recipient is allocated less than the full amount of a grant to which it is eligible in any year, it shall not be eligible for the deficiency in that year, but the unpaid portion of the grant for which it was eligible shall be carried forward by the Partnership to the following year, during which it shall be in the first class of priority as provided in clause (i) of subsection B.
D. The Partnership shall determine the amount of the grants to be allocated to eligible applicants by June 30 of each year. The Partnership shall then certify to the Comptroller the amount of grant an eligible company shall receive. Payments shall be made by check issued by the State Treasurer on warrant of the Comptroller.
E. All excess funds remaining in any given year shall be carried forward on the books of the Fund for use in subsequent years.
F. Actions of the Partnership relating to the allocation and awarding of grants shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.) pursuant to subdivision B 4 of § 2.2-4002.
§ 2.2-5107. Virginia Economic Development Incentive Fund Grants.
A. Subject to the appropriation by the General Assembly of sufficient moneys to the Fund, any eligible company that meets the requirements of this section and is not awarded a Virginia Investment Partnership grant under § 2.2-5101 or 2.2-5102 for the same project shall be eligible to apply for an economic development incentive grant as provided in this section.
B. The Partnership shall establish an application process by which eligible companies may apply for a grant under this section. An application for a grant under this section shall not be approved for payment until the Partnership has verified that the applicable requirements of the memorandum of agreement have been satisfied.
C. The amount of the economic development incentive grant that an eligible company may receive under this section shall be determined at the sole discretion of the Governor based on the recommendation of the Secretary. The determination of the appropriate amount for an economic development incentive grant shall be based on the application of guidelines that establish criteria for correlating the amount of a grant to the relative value to the Commonwealth of the new investment and employment.
D. The Partnership shall assist the Secretary in developing objective guidelines that shall be used in awarding economic development incentive grants. No grant shall be awarded until the Secretary has provided copies of such guidelines for review to the chairmen of the House Committee on Appropriations and the Senate Committee on Finance. The preparation of the guidelines shall be exempt from the requirements of Article 2 (§ 2.2-4006 et seq.) of the Administrative Process Act (§ 2.2-4000 et seq.). The guidelines shall require determinations regarding the amount of investment performance grants to address:
1. The number of new jobs created by the capital investment;
2. The wages paid for the new jobs and the amount by which wages exceed the average wage for the locality or region;
3. The amount of the capital investment;
4. The net present value of benefits to Virginia;
5. The amount of other incentives offered by the Commonwealth and the locality; and
6. The importance of the facility to the economy of the locality or region.
The guidelines shall also address the eligibility of companies that make a capital investment in phases over a period of years, and limits on eligibility for multiple grants by the same company within stated periods of time.
E. The amount of an economic development incentive grant to any eligible company under this section shall not exceed $10 million total.
F. The aggregate amount of economic development incentive grants payable under this section in any fiscal year shall not exceed $10 million. No more than three economic development incentive grants can be awarded under this section in any one biennium.
G. Any eligible company shall be eligible to receive a grant from the Fund in no fewer than five installments beginning in the third year after the Partnership has verified that the requirements applicable to such grant have been satisfied. All such terms shall be negotiated and set forth in a memorandum of agreement.
H. The Comptroller shall not draw any warrants to issue checks for grants under this chapter without a specific legislative appropriation as specified in conditions and restrictions on expenditures in the appropriation act. The payment of any grant under this section shall be in accordance with the terms and conditions set forth in a memorandum of agreement between a major eligible employer and the Commonwealth. These terms and conditions shall supplement the provisions of this chapter and shall include but not be limited to the terms of the payment of the grant. The payment of the grant shall be made in full or in proportion to a major eligible employer's fulfillment of the terms of the memorandum of agreement.
§ 2.2-5108. Requirements for grants generally.
A. Any company eligible to apply for a grant under this chapter shall provide evidence, satisfactory to the Secretary, of the amount of the capital investment, the number of new jobs created as a result of the capital investment, and such other evidence that requirements of this chapter have been satisfied. An eligible company whose application has been approved shall continue to comply with the requirements for grant eligibility during the grant payment period. The Partnership shall verify that the conditions for approval of any grant have been satisfied.
B. Prior to any grant payment, the Partnership shall certify to (i) the Comptroller and (ii) each applicant the amount of the grant to which such applicant is entitled. Subject to the appropriation by the General Assembly of sufficient moneys to the Fund, payment of such grant shall be made from the Fund by check issued by the State Treasurer on warrant of the Comptroller within 60 days of certification.
C. As a condition of receipt of a grant, an eligible company shall make available to the Partnership for inspection upon request all relevant and applicable documents to determine whether the requirements for the receipt of grants as set forth in this chapter have been satisfied. All such documents appropriately identified by the eligible company shall be considered confidential and proprietary.
D. Within 30 days of the end of each calendar quarter, the Secretary shall provide a report to the chairmen of the House Committee on Appropriations and the Senate Committee on Finance that shall include, but not be limited to, the following information: the name of the eligible company determined to be eligible for a grant, the products it produces or services it provides, the locality of the facility, the amount of the grant made or committed from the Fund, the number of new jobs created or projected to be created, the amount of the company's capital investment, and the timetable for the completion of the capital investment and employment creation.