No. 30601 (New Rule): R357-1. Rural Fast Track Program

DAR File No.: 30601
Filed: 10/18/2007, 02:23
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This proposed rule will allow small currently existent Utah companies to apply for incentives from the Industrial Assistance Fund for job creation and infrastructure.

Summary of the rule or change:

The purpose of the program is to provide an efficient way for small companies in rural Utah to receive incentives for creating high paying jobs and to further promote business and economic development in rural Utah. Twenty percent of the unobligated money in the Industrial Assistance Fund at the beginning of each fiscal year shall be used in the program.

State statutory or constitutional authorization for this rule:

Section 63-38f-903.5

Anticipated cost or savings to:

the state budget:

The Division of Economic Development is providing the following response in narrative form since this program has not previously been in existence and are using the best estimates that can based on the existing Industrial Assistance Fund (IAF) experience to date. The Rural Fast Track Program (RFTP) is by intent a much simpler program designed for small rural businesses and should have no significant impact on state budget costs. Estimates of the state budget cost or savings are being based on our experience with the IAF and on the fiscal footnote to the bill which was that no monies were appropriated for the bill; it will use existing funds for the program that were already allocated to IAF, and analysis by the legislative fiscal analysts office indicated, "Enactment of this bill likely will not result in any additional direct, measurable costs and/or benefits for individuals businesses or local governments."

local governments:

The following response to this question is in narrative form since this program has not previously been in existence and are using the best estimates we can based on our experience with the existing IAF. Our expectation is that only a nominal cost will be borne by the local community since the local economic development officials will only be minimally involved with confirming that local ordinances are being followed. The Legislative fiscal analysts office supported this estimate in the fiscal footnote to the bill. They stated, "Enactment of this bill likely will not result in any additional direct, measurable costs and/or benefits for individuals businesses or local governments."

small businesses and persons other than businesses:

The following response is in narrative form since this program has not previously been in existence and are using the best estimates we can based on our experience with the existing IAF. Special care has been made to limit the application cost to rural companies by keeping the application to a short form. When the Rural Fast Track (RFT) application was compared to our IAF application, the time needed to fill out the form was nominal and the committee that looked at the application felt it would only take one to four hours to gather the information and complete the form. The Legislative analysts office supported our estimates in the fiscal footnote to the bill. They stated, "Enactment of this bill likely will not result in any additional direct, measurable costs and/or benefits for individuals businesses or local governments."

Compliance costs for affected persons:

The response to this question is in narrative form since this program has not previously been in existence and are using the best estimates we can based on our experience with the existing IAF. The rural office staff that looked at the application and the information gathering time and agreed with the expectation that the application time required will be less than four hours and consequently should not have a significant compliance cost. The Legislative fiscal analysts office supports our estimates in the fiscal footnote to the bill. They stated, "Enactment of this bill likely will not result in any additional direct, measurable costs and/or benefits for individuals businesses or local governments."

Comments by the department head on the fiscal impact the rule may have on businesses:

Nominal impact is expected since the program is specifically being designed to be simple and convenient. Every effort has been made by staff to keep the application and material gathering process as simple as possible. Jason Perry, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Governor
Economic Development
324 S State
5th Floor
SALT LAKE CITY UT 84111

Direct questions regarding this rule to:

Michael Sullivan at the above address, by phone at 801-538-8811, by FAX at 801-538-8888, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/17/2007

This rule may become effective on:

12/24/2007

Authorized by:

Jason Perry, Director

RULE TEXT

R357. Governor, Economic Development.

R357-1. Rural Fast Track Program.

R357-1-1. Authority.

(1) Subsection 63-38f-903.5(4)(c) permits the administrator to make rules governing the following aspects of the Rural Fast Track Program:

(a) the content of the application form;

(b) who qualifies as an employee; and

(c) the verification procedure.

 

R357-1-2. Application Form.

(1) An application shall:

(a) be required that details company information including company name, federal tax ID, mailing and street address, telephone number, company capabilities, project description, submission requirements, and other information that is deemed necessary by the Governor's Office of Economic Development.

(b) include financial statements demonstrating profitability and must accompany the application.

 

R357-1-3. Employees.

(1) The company must have at least 2 employees who are paid a salary. Each new incremental job added must be paid a salary. GOED will verify and use the county average annual wage based on the most recently published data from the United States Census Bureau.

(a) GOED will verify and use the county population of 30,000 or less based on the most recently published data from the United States Census Bureau.

(2) An application can be made based on job (FTE) creation in a rural community.

(a) Definition of FTE: "FTE" means an individual full time employee of Applicant's Utah Business that is a Utah Resident and employed at least 30 hours per week (excluding lunch) during each week.

(b) When counting FTEs, if an FTE has its employment with Applicant terminated for any reason before completion of the applicable RFT Disbursement Period, another person otherwise meeting the requirements described above may be promptly hired full time to fill the terminated FTE's position and complete the year of qualifying full-time employment. In such case, Applicant and the Administrator would count the combined contribution of these two (2) full time employees as one (1) FTE. A replacement will need to be hired within 60 days for the position to remain qualifying for FTE purposes during a given RFT disbursement period.

 

R357-1-4. Economic Opportunity.

(1) An application can be made based upon a unique Economic Opportunity in a rural community.

(a) Definition of Rural Fast Track Economic Opportunity: "Economic opportunity" means a unique business situation or community circumstance which lends itself to the furtherance of the economic interests of the state and the local community by providing a catalyst or stimulus to the growth or retention, or both, of commerce and industry in the state.

 

R357-1-5. Verification.

(1) Procedure for verifying FTE and disbursing funds on post performance basis:

(a) Request Letter

(i) Claim for credits earned and request for disbursement of funds on company letterhead.

(ii) The request should summarize the number of jobs claimed multiplied against the incentive dollars per employee and the total dollar amount requested.

(iii) Company tax ID number

(iv) Address and addressee for where the check is to be sent

(b) Support Document

(i) Summarizes the claim for credits earned by outlining the types of jobs and number of jobs that meet the minimum earnings threshold and is usually produced in spreadsheet form.

(ii) A base year document is created at the time of incentive approval and is used as a template for this summary document and will be sent to the company by the Administrator. Document will include requested information about the new jobs listed and compared against the base number of employees in the company at the time of the application.

(iii) Department of Workforce Services filing of quarterly unemployment insurance forms covering the disbursement period.

(c) Letter of Compliance

(i) A letter verifying the accuracy of the information supplied to claim the incentive. Completed and signed by company officer.

 

KEY: economic opportunity, job creation, rural economic development, Rural Fast Track Program

Date of Enactment or Last Substantive Amendment: 2007

Authorizing, and Implemented or Interpreted Law: 63-38f-903.5