HD19 - Eligibility of Businesses for Industrial Access Road Funding


Executive Summary:
The 1998 General Assembly requested through Item 523 H. of the 1998 Appropriations Act that the Department of Transportation, in conjunction with the Virginia Economic Development Partnership, study whether to broaden the statutory authority of § 33.1-22 1 of the Code of Virginia to include additional "establishments" that could qualify for industrial access road funding. The two agencies reviewed historical data, assessed current economic development trends and discussed whether modification of existing eligibility criteria would increase the effectiveness of the Industrial Access Roads program.

The program has been in existence since 1956. It was established by the General Assembly so that counties, cities and towns could assist new or expanding industries in obtaining access to their sites, without expending substantial portions of the localities' regular highway funds. The program is administered by the Commonwealth Transportation Board, in consultation with the Virginia Economic Development Partnership and the Virginia Department of Business Assistance. Administration is carried out under the provisions of § 33.1-221 of the Code of Virginia and the policies of the Commonwealth Transportation Board. Eligibility of the industry is one of the principal considerations in the allocation of funds.

Neither the 1956 legislation nor any of its subsequent amendments prohibits the use of industrial access road funds for any specific type of business. The general intent of the program can be inferred from the statute's charge that the Transportation Board expend the funds for access roads to ". . .industrial sites on which manufacturing, processing or other establishments will be built under firm contract or are already constructed...."

The policy of the Commonwealth Transportation Board has been developed through years of experience. Its historical perspective is based on the concept that basic, manufacturing establishments are the most practical objectives of the program because they represent permanence, they add to the Commonwealth's tax base and they are employment multipliers. The Board has attempted to direct a limited fund source to its most effective use.

Consultation with the Commonwealth's economic development agencies has been an integral part of the Transportation Board's process for determination of an establishment's eligibility for access funding. The flexibility afforded by both the statute and the Board's policy allows funding for virtually any establishment that is found to be consistent with the intent of the Industrial Access Roads program.

The flow of access project allocations under the existing eligibility criteria is sufficient to exhaust the program's annual appropriation. No change in the statutory authority of § 33.1-22 1, Code of Virginia, regarding eligibility of establishments for industrial access road funding is recommended.