HD4 - Definition of Businesses and Industry that Qualify for Industrial Access Road Funding


Executive Summary:
The 2005 General Assembly, through Item 492.D.6 of the 2005 Appropriation Act, directed the Virginia Department of Transportation (VDOT) to work with local, regional and state economic development agencies to revise the definition of businesses and industry that qualify for industrial access road funding, and to present findings and recommendations to the Governor and the General Assembly prior to the 2006 General Assembly Session. This document contains those findings and recommendations.

The Industrial Access 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' traditional highway funds.

Both the "Code of Virginia" and the Commonwealth Transportation Board's (CTB) policy state that industrial access road funds are to be used to provide access to sites on which "...manufacturing, processing, or other establishments..." will be built or are already constructed. However, economic development officials have pointed to current trends indicating fewer new businesses are of the traditional manufacturing and processing nature. Establishments based on service and technology-based products constitute the majority of all new investments. The General Assembly's direction to address the eligibility definition reflects recognition that the industrial access roads program could be a more effective economic development resource if its criteria were broadened.

A group representing the prescribed constituencies was formed to study the issue and provide recommendations. This group recommended an amendment to § 33.1-221 of the Code that names additional eligible business activities, with the qualification that they meet "basic employer" criteria as determined by the Virginia Economic Development Partnership and the Virginia Department of Business Assistance. The intent of this action is to broaden the definition of eligible uses for the Industrial Access Roads Program while maintaining its primary goal of assisting localities in attracting businesses that provide significant amounts of private capital investment, employment opportunity and assurance of long-term presence in the Commonwealth.

During its discussions, the group identified other issues related to the administration of the Industrial Access Roads Program. While these issues are not directly related to industry eligibility, they are considered relevant and important, and impact the overall effectiveness of the Industrial Access Road Program. These additional recommendations are summarized in Appendix C.