RD228 - The Virginia Enterprise Zone Program 2009 Qualification Year Annual Report


Executive Summary:
The 2009 qualification year marked the fifth year under the 2005 Enterprise Zone Grant Act. The 2005 statute replaced the former tax credit incentives with the Real Property Investment Grant (RPIG) and the Job Creation Grant (JCG). In addition to the grant incentives supporting the new program's overall policy, the grants also reflect the shift in business practices and development trends that have occurred over the past decade.

The program's overall policy intent continues to provide:

1) A tool to help distressed localities versus a general economic development incentive.

2) A means to increase fiscal accountability associated with state incentives reflected in new grant monitoring and attestation components.

3) A way to focus on economic situations that can maximize the use of financial incentives and target businesses that create high quality jobs.

The Grant incorporates provisions allowing firms to continue to receive tax credits under specific and limited conditions. The tax credits will sunset the end of fiscal year 2019.

This report includes information on the usage of the grants and pre-2005 incentives during the 2009 qualification year, which was paid from FY 2010. It reflects the implementation of General Assembly changes to the RPIG parameters in 2009.

In addition, four zones - Norfolk/Portsmouth, Prince George County, Staunton and Suffolk - expired at the end of 2009. Competitive applications were accepted in October 2009 and reviewed by DHCD and VEDP staff. Based on their recommendations Governor Kaine designated the following localities to fill those four vacancies: Franklin/Southampton, Portsmouth, Prince George County and Staunton. Under the current statute, zones are designated for a 10-year period with two possible five-year renewal periods.