** Message for Local Zone Administrators – 2007 Annual Reports are due July 14, 2008
The 2007 Local Enterprise Zone Annual Program Report forms are now available >> WORD
**As of July 24, 2007, the federal minimum wage was increased from $5.15 per hour to $5.85 per hour. The Job Creation Grant (JCG) is based on the net new positions meeting the health benefit and wage requirement. In order to qualify for a JCG, the employee must be paid at least 175 percent of the federal minimum wage.
- With this increase, net new positions must receive at least $10.24/ hour to be eligible for the $500 grant and at least $11.70/hour to be eligible for the $800 grant.
- Since this change was made in the middle of the year, the grant eligible positions will be calculated based on the full months the positions were employed at the previous minimum wage requirement (at $9.01/hour) and the full months employed at the new wage requirement (at least $10.24/hour). So, if an employee met the previous wage requirement through July but did not receive a salary increase, the grant amount would be calculated with the start date/end date as Jan. 1, 2007 to July 24, 2007, i.e. six full months.
This change will be reflected in the 2007 Grant Instruction Manual as well as the Job Creation Grant template. The federal minimum wage will again be raised on July 24, 2008 to $6.55 and on July 24, 2009 to $7.25.
**During the 2007 General Assembly session, additional funding for Virginia Enterprise Zone grants was allocated and changes were made to the Enterprise Zone (EZ) statute in reference to the Real Property Investment Grant.
- The EZ budget was increased by $2 million for the 2007 fiscal year and $2 million for the 2008 fiscal year. There are no plans/money to make whole the pro-rated grants from last year.
- Additionally, changes were made to the Real Property Investment Grant and will be in effect as of the 2007 grant year. Qualified applicants investing in industrial, commercial, or mixed-use property may receive a cash grant in an amount equal to 20 percent of the qualified real property investment for the calendar year in which the property was placed in service. The second tier of investment for this grant will increase from $2 million to $5 million.
This means that for qualified real property investments of less than $5 million, the maximum grant available over a five consecutive year term is $125,000 for investments of at least $625,000 but less than $5 million.
- For more information on the grant eligibility criteria, see the section on “State Incentives” below.
The Virginia Enterprise Zone program is committed to encouraging economic growth and revitalization throughout the commonwealth by supporting businesses and investors.
Established by the General Assembly in 1982, the Virginia Enterprise Zone program is a partnership between state and local government that stimulates job creation and private investment within designated areas throughout the state. Currently, Virginia has more than 50 designated enterprise zones. See VEZ map.
To date, qualified enterprise zone applicants have created more than 39,000 jobs and spent more than $800 million in qualified investments within the enterprise zones.
State Incentives:
In 2005 the Enterprise Zone Grant Act went into effect. Under this program two grant-based incentives are available, Job Creation Grants and Real Property Investment Grants. For more information on the grants’ eligibility criteria, see the Virginia Enterprise Zone grant information table.
- Job Creation Grants are based on:
- Permanent full time job creation over a four job threshold, wage rates of at least 175 percent of the Federal minimum wage, and the availability of health benefits;
- Personal service, retail, food and beverage positions are not eligible to receive job creation grants; and
- The amount of the grant will be based on the wages paid for those grant eligible positions.
- Real Property Investment Grants are based on:
- Qualified real property investments made by any individual or entity to a commercial, industrial, or mixed use building or facility in a designated Virginia Enterprise Zone;
- The amount of the grant is 20 percent of the total cost of qualified real property investment and is capped per building or facility;
- The grant is capped at $125,000 per building or facility for investments less than $5 million, and $250,000 for investments of $5 million or more.
- If a business firm previously qualified or has signed an agreement with the Virginia Department of Housing and Community Development (DHCD) and is eligible to receive the General Income Tax Credit and Job Grants, forms and manuals are available for these pre-2005 incentives.
In addition to these state incentives, each locality offers its own package of incentives tailored to their unique needs. To find out whether a business or real property is located within an enterprise zone, or to learn more about a specific zone’s local incentive package, see the contact list of Local Zone Administrators.
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