ECONOMIC DEVELOPMENT FINANCE PROGRAMS Georgia Department of Community Affairs June 2004 ECONOMIC DEVELOPMENT FINANCING PACKET Georgia Department of Community Affairs 60 Executive Park South, N.E. Atlanta, Georgia 30329-2231 (404) 679-1593 This publication is funded in part by a grant from the Appalachian Regional Commission. An Equal Opportunity Employer If you are disabled and would like to receive this publication in an alternative format, please contact the Georgia Department of Community Affairs at 1 (800) 736-1155 (TDD). Table of Contents Introduction and Acknowledgments ............................. .....1 GEORGIA DEPARTMENT OF ECONOMIC How to Operate a Business Legally in Georgia ........... .....2 DEVELOPMENT (GDEcD) .................................... .....32 Secretary of State First Stop Business Information Center SB .................. .....4 GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS (DCA) .............................. .....5 Georgia Department of Economic Development ....... .....33 United States Export Assistance Center (USEAC) SB.....36 The Georgia Entrepreneur & Small Business Network SB ................................................................ .....36 Community Development Block Grant (CDBG) Program Regular Round Economic Development Program ....... .....6 Employment Incentive Program (EIP) ......................... .....7 Regional Economic Business Assistance (REBA) Program .......................................................... .....8 Downtown Development Revolving Loan Fund (DD RLF) SB ...................................................... .....9 Redevelopment Fund .................................................. .....10 Office of Downtown Development (ODD) ................ .....11 Georgia Appalachian Region Business Development Revolving Loan Fund Program (RLF) SB .................................................................... .....12 GEORGIA ENVIRONMENTAL FACILITIES AUTHORITY (GEFA) ..................... .....37 Georgia Fund Program ............................................... .....38 Clean Water State Revolving Loan Fund ................... .....39 Drinking Water State Revolving Loan Fund .............. .....40 Solid Waste Facilities Loan Program ......................... .....41 Environmental Emergency Loan Program ................. .....41 U. S. SMALL BUSINESS ADMINISTRATION (SBA) SB .................................................................... .....42 Your Business and the S.B.A. ..................................... .....43 Appalachian Regional Commission Area Development Funds ........................................... .....14 Local Revolving Loan Funds (RLF's) SB .................. .....15 Cities & Counties with Revolving Loan Funds (RLF's) ............................................................. .....15 CDBG Loan Guarantee Program ................................ .....16 Regional Economic Assistance Projects (REAP) ....... .....17 Opportunity Zones (HB 984) ...................................... .....18 Georgia Business Expansion and Support Act Executive Summary SB .............................................. .....19 How to Apply for a Small Business Loan .................. .....45 Small Business Development Centers ........................ .....46 Headquarters: University of Georgia at Athens .......... .....46 S C O R E ................................................................... .....48 U.S. Small Business Administration 7(a) Guarantee Loan Program .................................... .....49 Participants in the U.S. Small Business Administration's Preferred Lender Program & Certified Lender Program ...................................................................... .....49 Section 504 Program .................................................. .....53 Tax-Exempt Industrial Development Bond Financing.....24 Georgia's Certified Development Companies ............ .....55 Quality Growth Grant Program .................................. .....25 SBA LowDoc Lending Program ................................ .....56 Renewal Communities/Empowerment Zones/Enterprise Communities (RC/EZ/EC) SB ................................... .....25 Office of Regional Services ........................................ .....26 State Service Delivery Super Regions ........................ .....27 State Service Delivery Regions .................................. .....28 ONEGEORGIA AUTHORITY ............................... .....29 SBA Express Loan Program ....................................... .....57 Atlanta Women's Business Center ............................. .....58 SBA 8(a) Business Development Program ................. .....58 Small Disadvantaged Business (SDB) Certification .. .....59 Microloan Programs In Georgia ................................. .....59 Small Business Investment Companies ...................... .....60 Equity Fund (OneGeorgia) ......................................... .....30 SB - Indicates a program of potential interest to OneGeorgia's EDGE Program .................................... .....31 a small business. i Surety Bond Guarantee Program ................................ .....61 SBA Government Contracting - Area III .................... .....61 UNITED STATES DEPARTMENT OF AGRICULTURE (USDA) RURAL DEVELOPMENT (RD) ............................ .....62 Intermediary Relending Program SB ......................... .....63 Rural Business Enterprise Grants SB ......................... .....64 Business and Industry Guaranteed Loan Program SB .....65 Financing For Small Municipal and Rural Community Facility Projects ...................................... .....66 Financing for Small Municipal and Rural Water, Wastewater and Solid Waste Systems ........................ .....69 Rural Economic Development Loan and Grant Program ...................................................................... .....70 GEORGIA DEPARTMENT OF NATURAL RESOURCES HISTORIC PRESERVATION DIVISION ................................................................. .....71 State Historic Preservation Tax Incentives ................. .....72 Georgias State Historic Preservation Office ............... .....73 Twenty Percent Investment Tax Credit ....................... .....74 CITY AND COMMUNITY DEVELOPMENT ..... .....75 U.S. DEPARTMENT OF THE TREASURY COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND (CDFI) SB ........................ .....90 Community Development Financial Institutions Fund (CDFI) ............................................................... .....91 New Market Tax Credit (NMTC) Program ................ .....93 GEORGIA TECH ECONOMIC DEVELOPMENT INSTITUTE (EDI) SB .............................................. .....94 Georgia Tech Economic Development Institute (EDI) SB ..................................................................... .....95 Southeast Trade Adjustment Assistance Center (SETAAC) .................................................................. .....97 MINORITY PROGRAMS SB ................................. .....98 Minority Small Business Resource Organizations ..... .....99 OTHER ORGANIZATIONS AND PROGRAMS OFFERING FINANCIAL AND TECHNICAL ASSISTANCE IN GEORGIA SB .......................... .....100 Regional Development Centers SB .......................... .....101 Tennessee Valley Authority (TVA) ........................... .....103 Brownfields Redevelopment .................................... .....103 Small Business Assistance Program SB ................... .....104 Atlanta Development Authority (ADA) SB ............... .....76 DDA Financing Tools ................................................. .....77 "Freeport" Inventory Tax Exemptions for Georgia Industries SB .............................................................. .....79 ADULT EDUCATION AND TRAINING ............... .....81 Coastal Area District Development Authority (CADDA) ................................................................. .....104 Community Adjustment and Investment Program (CAIP) ...................................................................... .....105 Southeast Rural Community Assistance Project (SE/R-CAP) .............................................................. .....106 Intellectual Capital Partnership Program (ICAPP) SB.....82 Quick Start .................................................................. .....82 Workforce Investment Act (WIA) .............................. .....83 Georgia Department of Revenue Georgia Department of Technical and Adult Education Georgia Tax Credit for Adult Basic Skills Education . .....84 Federal Home Loan Bank of Atlanta ........................ .....106 Georgia Development Authority (GDA) .................. .....107 Export-Import Bank .................................................. .....108 Entrepreneurial Training and Funding Opportunities SB ............................................................................. .....109 The Abilities Fund SB ............................................. .....111 U.S. DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION (EDA) .... .....87 U.S. Department of Commerce Economic Development Administration (EDA) ........ .....88 EDA Revolving Loan Fund (RLF) Programs SB ....... .....89 The Center for Rural Entrepreneurship SB .............. .....111 Georgia Community Loan Fund, Inc. (GCLF) SB ... .....111 Business Incubators .................................................. .....112 Technology and Telecommunications Research in Georgia ..................................................................... .....113 Economic Development Agencies ............................ .....114 SB - Indicates a program of potential interest to a small business. ii Introduction and Acknowledgments Thank you for contacting the Georgia Department of Community Affairs (DCA), Office of Economic Development (OED) for your copy of the Economic Development Finance Packet (EDFP). The EDFP is a comprehensive listing of state, federal, local, and national programs that are designed to promote economic development and business enhancement in Georgia. The Department is appreciative of the many agencies that have willingly provided information on their programs. The information in this packet was summarized from each agency's material. While we feel that this packet is thorough, it does not include every applicable program that could benefit businesses. Programs that are of interest to you, your business, or your organization should be contacted directly. All possible contact information has been provided where feasible. However, please be aware that each program may have periodic updates that may not be included in this version of the EDFP. As changes or corrections are brought to the attention of OED, the most expeditious corrections will be reflected on the DCA website at www.dca.state.ga.us/economic. However, the OED strongly recommends that you contact the organization of interest directly for the most current information and procedures. For individuals who are seeking to start their own business or want to expand an existing business, the Small Business Administration (SBA) section of the EDFP should be reviewed in its entirety. To be eligible for assistance from the SBA, a business must meet certain SBA criteria. By definition, a very small business is defined as a business with no more than 15 employees and less than $1 million in annual receipts. The SBA further defines small businesses by number of employees, annual average sales receipts, and by industry. Contact the SBA directly for more detailed information. The SBA, through its Small Business Development Center (SBDC) network, offers business owners and prospective business owner's, instruction in the fundamentals of business operations, including the cornerstone of any business, the business plan. SBDC's also provide up-todate training, counseling, and other forms of technical assistance. There are twenty (20) SBDC's located strategically throughout Georgia. In addition to the SBA section, there are an assortment of programs that are specifically tailored to smaller businesses. These programs will have an SB designation next to its listing in the table of contents. One question the OED fields on a frequent basis is, "Can an individual obtain a grant to start a business?" The straightforward answer to this question is "No!" Additionally, the OED is not aware of any grant programs that offer no-cost financial assistance to individuals who want to start a for-profit business. While there are grant programs available, (some are listed in this packet) grants are generally made to units of local government and nonprofit organizations to carry out a specific mission. Examples in the economic development arena include, but are not limited to job creation and retention, downtown redevelopment, and other community redevelopment efforts that result in public benefit. Only businesses and organizations that work closely with the appropriate local government entity, and make firm job creation and private investment commitments, will be considered for these programs. It is the Department's pleasure to provide you with this updated version of the EDFP. We again want to thank the many organizations listed in the EDFP that have a mission of fostering business growth in Georgia. We hope that the information contained in the EDFP results in continued business expansions and start-ups in the great State of Georgia! Please feel free to contact the Department for further information. Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329-2231 404-679-4840 www.dca.state.ga.us Coleen Gelot Economic Development Consultant 404-679-3110 cgelot@dca.state.ga.us Ross J. Avina III Economic Development Consultant 404-679-1593 ravina@dca.state.ga.us Andy Yarn Economic Development Consultant 404-679-1589 ayarn@dca.state.ga.us 1 How to Operate a Business Legally in Georgia Every new business owner should be aware that a business license is necessary to operate legally in Georgia. Obtaining a business license will depend upon where the business is located. If the physical address of the business in within the corporate limits of a city, then the license can be obtained from the city; if the business is located outside the corporate limits of a city, then the license can be obtained from the county. However, license acquisition is just the starting point. Business owners should be aware of multiple state and federal requirements that are necessary to operate. This can include withholding tax, workers compensation, sale and use tax, labor law compliance, and occupancy permits to name a few. Finding out this information can be difficult since there are agencies at the federal, state, and local levels that may need to be consulted. The information in this packet is not all-inclusive and should not be considered a substitute for legal assistance from a qualified attorney. Also, since these requirements are subject to change, business owners should contact individual departments for the most current information. To this end, the Secretary of State's office offers the First Stop Business Information Center to assist business owners. The center is designed to offer one stop shopping on the licensing and permitting of businesses in Georgia. Their contact information can be found on page 4 of this packet. Businesses that want to provide child care services need to contact the Department of Human Resources (DHR). Organizations caring for less than nineteen children need to register with DHR. If providing care for more than nineteen children, the organization needs to be licensed. For more information, contact: Department of Human Resources 2 Peachtree Street, N.W. Atlanta, Georgia 30303 (404)-657-5562 www2.state.ga.us/departments/dhr After contacting DHR, the organization may want to contact the Georgia Child Care Council (GCCC). GCCC provides technical assistance concerning child care issues and has an annual competition for funding. For more information, visit their website at: www.gachildcare.org Businesses involved in food processing or grocery sales need a food sales establishment license from the Georgia Department of Agriculture before starting. An inspection is also required and may be requested by phone. An application for business will be accepted if the inspection shows that the establishment meets the department's requirements. Help can be obtained from the Department of Agriculture in preparing for the inspection. It is advised that business owners contact the department before investing in any renovation, equipment or plans. For information, contact: Georgia Department of Agriculture Consumer Protection Division 19 Martin Luther King Drive Agriculture Building, Room 306 Atlanta, Georgia 30334 (404) 656-3627 www.agr.state.ga.us Firms engaged in cooking or food preparation, including restaurants, hotels and nursing homes, are licensed by the county environmental health departments. Categories of business that concern the public interest are subject to special permits, licensing and inspection. This includes, but is not limited to, schools, nurseries, motor transport, public entertainment, employment agencies, securities dealers and financial institutions. For more information on these types of businesses, contact the State of Georgia Information Line (404) 656-2000 www.state.ga.us Businesses which sell alcoholic beverages must have a state alcoholic beverage license and a local license which is obtained from either the city or county in which the store is located. The application forms for the licenses must be completed before the business is opened. Local authorities and the Department of Revenue can be of assistance in preparing the application. For information and application forms from the state contact: Department of Revenue Alcohol & Tobacco Unit 317 Trinity-Washington Building Atlanta, Georgia 30334 (404) 656-4252 www2.state.ga.us/Departments/DOR 2 Taxes cannot be ignored, of course. Business owners are required by law to withhold the following from the wages paid to employees: federal income taxes, state income taxes and FICA (Social Security) Insurance. Income taxes will also be levied by the federal and state governments on earnings of any business. Therefore, each business must file an income tax return with both agencies. Businesses may be required to file estimated tax returns and pay estimated taxes on a quarterly basis. For federal tax information, contact: U.S. Internal Revenue Service 275 Peachtree Street, N.E. Atlanta, Georgia 30303 1-800-829-1040 www.irs.gov State tax information can be obtained from: Georgia Department of Revenue Georgia Income Tax Division Post Office Box 38487 Atlanta, Georgia 30334 (404) 656-4071 www2.state.ga.us/Departments/DOR The IRS has a number of publications that are available upon request to small businesses. One of the most helpful is "Your Business Tax Kit", which includes data and forms for a Federal Employer Identification Number and a tax guide for small businesses that can be ordered by calling Forms and Publications at 1-800829-3676 or through a visit to the IRS office. In Georgia there is a 4 percent sales and use tax which applies to the retail purchase, retail sale, rental, storage, use or consumption of tangible personal property and certain services. In other words, sales tax must be collected on just about every tangible item sold, except for the exempt categories of prescription drugs, eyeglasses and contact lenses. A sales tax number is required for each business before opening. The number plus instructions for collection, reporting and remitting the money to the state on a monthly basis can be obtained from: Georgia Department of Revenue Sales and Use Tax Division 1800 Century Center Boulevard, N.E. Suite 8214 Atlanta, Georgia 30345 (404) 417-6601 www2.state.ga.us/Departments/DOR In addition, some counties have exercised local option issues to increase their sales and use tax to pay for certain projects. Businesses are required by the state to pay unemployment insurance tax if the company has one or more employees for 20 weeks in a calendar year, or it has paid gross wages of $1,500 or more in a calendar year. The taxes are payable at a rate of 2.7 percent on the first $8,500 in annual wages of an employee. Unemployment insurance must be reported and returns made to the state. For information contact: Georgia Department of Labor Adjudication Section, Sussex Place 148 International Boulevard, N.E., Suite 850 Atlanta, Georgia 30303-1751 (404) 232-3301 www.dol.state.ga.us If a business employs three or more, workers' compensation insurance must be carried to provide protection to those injured on on-the-job accidents. The State Board of Workers' Compensation aids people who need claim assistance. For information contact: State Board of Workers' Compensation 270 Peachtree Street, N.W. Atlanta, Georgia 30303-1299 (404) 656-3875 www.state.ga.us/sbwc Virtually all business entities are subject to the federal minimum wage, overtime and child labor laws. Information on these laws and other federal laws pertaining to labor, may be obtained from: U.S. Department of Labor Wage and Hour Division Room 7m40 61 Forsyth Street, S.W. Atlanta, Georgia 30303 (404) 893-4525 www.dol.gov 3 Incorporating a business allows a firm to take advantage of the limited liability of a corporation. A corporation is usually a taxpayer separate from its owners, unless the company decides it wants to be an "S" corporation for special tax consideration. Contact an attorney or accountant for information on just what each designation can mean to the firm. Trademarks Section, Secretary of State Corporations Division, 306 West Tower Floyd Building Two Martin Luther King Jr. Drive, S.E. Atlanta, Georgia 30334 (404) 656-2861 www.sos.state.ga.us/corporations/trademarks Legal assistance will be needed to incorporate. Incorporation involves checking with the Secretary of State to see if the name chosen for the business is available. Typed Articles of Incorporation must then be submitted, along with a fee. Additionally, a notice of incorporation must be published in the official legal newspaper for the county. There is also a fee for this printing. Each business must submit a consent from a person who will act as registered agent for service of process on the corporation. This consent must be filed along with the Articles of Incorporation. The articles must name at least three directors, unless the corporation will have two or fewer shareholders. For more information, contact: Secretary of State, Corporations Division 315 West Tower, Floyd Building Two Martin Luther King Jr. Drive, S.E. Atlanta, Georgia 30334 (404) 656-2185 www.sos.state.ga.us/corporations Trademarks and service marks may be registered under federal laws or state laws. In Georgia, an application form should be filed, along with a $15 fee and copies of the trademark or service mark. Registration is then good for 10 years. In Georgia contact: For federal information contact: General Information Services Division U.S. Patent and Trademark Office Crystal Palace 3, Room 2C02 Washington, D.C. 20231 (800) 786-9199 www.uspto.gov Businesses that use any name other than the owner's must register this fictitious name with the county as required by the Trade Name Registration Act. This registration requirement does not apply to corporations doing business under their corporate names or to those practicing any profession under a partnership name. For information contact the Clerk of the Superior Court for the county in which the business is located. Last but not least, if an established business is to be bought, the purchaser must comply with the Bulk Sales Law. This law requires that at least five days before the actual purchase, each creditor must be personally notified of the proposed sale. In counties of more than 200,000 population, this intent must be published at least one time in the county legal newspaper not less than seven days prior to completion of the purchase. An attorney should be consulted about this procedure. Secretary of State First Stop Business Information Center The First Stop Business Information Center provides the small business owner and the prospective entrepreneur with a central point of information and contacts for state regulatory requirements for operating a small business. For further information contact the Office of the Secretary of State at: Suite 315 West Tower Floyd State Office Towers 2 Martin Luther King Jr. Drive Atlanta, Georgia 30334 1-800-656-4558 (404) 656-7061 (404) 657-6380 Fax (404) 656-2392 TTY Communication firststop@sos.state.ga.us www.sos.state.ga.us/firststop 4 Georgia Department of Community Affairs (DCA) www.dca.state.ga.us 5 Community Development Block Grant (CDBG) Program Regular Round Economic Development Program The primary objective of the economic development (ED) component of the CDBG program is the expansion of economic opportunities in cities and counties, principally for persons of low-and-moderate income. This is accomplished by funding viable projects which cannot take place without CDBG assistance. Applicants should note that any project must create or retain jobs for lowand-moderate income persons. Eligible Applicants Eligible applicants under Georgia's CDBG regular round program are cities and counties. Excluded are metropolitan cities, urban counties and other units of governments eligible to participate in the Department of Housing and Urban Development's (HUD) urban counties or metropolitan cities program. In FY '03, ineligible applicants under Georgia's program are Albany, Atlanta, Augusta-Richmond County, Brunswick, Dalton, Gainesville, Hinesville, Macon, Marietta, Rome, Savannah, Valdosta, and Warner Robins; the Athens-Clarke County Unified Government, the Columbus Consolidated Government, Clayton County, Cobb County, DeKalb County, Fulton County, Gwinnett County, and any incorporated city within a HUD Entitlement Urban County which chooses to participate with the Urban County through a cooperating agreement. payback is not required where CDBG regular round funds are used for public facilities, but the applicant community must present evidence that it cannot finance the facility without assistance. Private businesses which are the primary beneficiary under a public facility project are required to warrant their commitments to invest and create jobs with an irrevocable letter of credit. Maximum Funds Available A designated allotment of funds from each federal fiscal year's allocation to the Department of Community Affairs (DCA) for the EDCDBG program will be used for the CDBG regular round program. The amount used will depend upon the number and quality of the applications received and upon the demand for funds in the areas of housing and public facilities. The maximum CDBG regular round amount that may be applied for is $500,000. Deadline Applications for the CDBG regular round program usually must be submitted during the second quarter of each calendar year. The final deadline is announced each year by DCA, and only one competition is held each year. Awards are generally announced 90 days after the receipt of applications. Eligible Projects CDBG regular round grants may be loaned to businesses or used to build public facilities that make business projects possible which will create employment for low-andmoderate income persons. Generally eligible are: 1. Projects carried out by public or private nonprofit entities including: (a) acquisition of real property; (b) acquisition, construction or rehabilitation of public facilities, site improvements and utilities. 2. Loans to private businesses, when assistance is necessary and appropriate to carry out an economic development project. Grant and Loan Conditions Loans are usually made at below market rates with favorable terms (but no more favorable than the minimum necessary to make the project feasible). A Program Requirements Funding is very competitive; typically one in two applicants is successful. To be competitive as an ED project, CDBG dollars must be leveraged at a minimum of 1 private dollar to every CDBG dollar; leverage ratios of 2 to 1 are not uncommon. Job creation is a major competitive factor. Awards are contingent upon firm commitments by other financial participants. Personal guarantees and adequate collateral. For further information contact: Brian Williamson, Director Business & Financial Assistance Division Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 (404) 679-1587 bwilliam@dca.state.ga.us 6 Employment Incentive Program (EIP) General Description The Employment Incentive Program (EIP) is a financing program capitalized with State CDBG funds that may be used by private business along with conventional private financing to carry out economic development projects which will result in employment of low-and moderateincome persons. Projects that create opportunities for lowand moderate-income persons to advance themselves by obtaining employment, greater job security, better working conditions, job training, enhancement of workplace skills and advancement opportunities receive the greatest consideration. Eligibility Requirements Eligible EIP activities encompass three (3) broad areas: 1. grantstolocalgovernmentsfortheinstallationofpublic infrastructure which will support an eligible economic development project. Eligible projects include such items as public water and sewer systems, distribution and/or collection lines, wastewater treatment projects, rail spurs, and various other types of public facilities; 2. grants to local governments who then loan the EIP proceeds to a sub-recipient industry to finance various fixed assets which will be used in an eligible economic development project. Eligible uses for EIP loan funds include financing for a variety of fixed assets including: land, new facilities, rehabilitation of existing facilities, machinery and equipment, and some types of privately owned infrastructure. 3) grants to local governments for assistance to local development entities and other local non-profit corporations to fund facilities which assist low and moderate income persons to acquire employment, the employment skills and/or basic educational training to become more effective participants in the local economy. Eligibility for such activities will be limited to "new" activities which have not previously been undertaken by the unit of local government or local development entity. EIP projects must always create or retain employment principally for low and moderate income persons. Eligible Applicants Eligible applicants for funding under Georgia's EIP program are units of general purpose local government. Excluded are metropolitan cities, urban counties and other units of government eligible to participate in HUD's urban counties, or metropolitan cities program. Ineligible applicants under Georgia's program are Albany, AthensClarke County Unified Government, Atlanta, Augusta- Richmond County, Columbus Consolidated Government, Clayton County, Cobb County, Dekalb County, Fulton County, Gwinnett County, Macon, Marietta, Savannah, and Warner Robins, as well as any incorporated city within a HUD Entitlement Urban County which chooses to participate through a Cooperating Agreement with the Urban County in the HUD Entitlement Program. Assistance Amounts The maximum EIP grant or loan amount is $500,000. Each dollar in EIP funds must leverage a minimum of one dollar in private investment. Financing Terms Each business receiving EIP assistance must enter into a legally binding agreement with the local government detailing performance criteria for job creation and private investment. Agreements based on EIP grants for infrastructure are backed by irrevocable stand-by letters of credit the business must supply. Projects involving direct loans are underwritten and collateralized using standard commercial loan documents. Performance criteria for job creation and investment are included in the EIP loan agreement. Equity contributions and loan to value ratios are set case by case. Loans must be fully collateralized. The interest rate and term of an EIP loan are determined on a case by case basis. The average rate in 2003 was approximately 3% and terms of EIP loans ranged between 4 and 15 years depending on the assets to be financed. Deadlines Local governments may submit an EIP application at any time. The Department strongly recommends applicants submit an initial project assessment (IPA) for any potential project. This allows the applicants and the Department to assess the potential competitiveness of a proposed project prior to the submission of an application. An acceptable, complete, EIP application may then be submitted. The application review may take approximately 45 days. For information on EIP Public Infrastructure projects contact: Andy Yarn Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 (404) 679-1589 or ayarn@dca.state.ga.us For information on EIP loans to business projects contact: Mitch Griggs (404) 679-0593 or mgriggs@dca.state.ga.us 7 Regional Economic Business Assistance (REBA) Program General Description The Regional Economic Business Assistance (REBA) program is a specialized economic development tool that may be used to enhance Georgia's competitiveness in attracting significant economic development projects and as a vehicle for significant local, regional or statewide initiatives that will have either short- or longterm economic development benefits. REBA should not be used when other state or federal programs could be used or when local funds are sufficient to accomplish economic development goals. Eligibility Requirements Generally, REBA funds are targeted for projects in Tier3 and Tier-4 counties. All applications must include a recommendation from a state agency whose statutory powers include community and economic development (e.g., the Georgia Department of Industry, Trade and Tourism). REBA projects should retain or create jobs in Georgia and result in new private investment in Georgia. Deadlines Eligible applicants may submit an application at any time. For information regarding a recommendation for REBA funding contact: The GDITT regional representative whose service area includes the potential business location; or Charlie Gatlin, Deputy Commissioner, Georgia Department of Industry Trade and Tourism, (404) 6563573. Eligible Applicants Eligible applicants for REBA funding are generalpurpose local governments, local-government authorities, regional development centers, state agencies and state authorities. Eligible Activities Eligible activities include, but are not limited to: (1) public land acquisition and site development, (2) public infrastructure improvements, (3) publicly owned machinery and equipment, and (4) publicly owned/ privately leased fixed assets and machinery and equipment. Assistance Amounts The maximum amount available for economic development projects is $750,000 and $200,000 for regional or multi-county community- or economicdevelopment implementation projects. These amounts may be waived by the DCA commissioner. 8 Downtown Development Revolving Loan Fund (DD RLF) General Description The purpose of the Downtown Development Revolving Loan Fund (DD RLF) is to assist eligible applicants in the performance of their duties and responsibilities under law to their citizens, including among other duties and responsibilities, the development, promotion and retention of trade, commerce, industry and employment opportunities by providing flexible and timely financial assistance for downtown development projects around the state. Eligible Applicants Municipalities with a population of 50,000 or less and counties proposing projects in municipalities of 50,000 or less If the applicant is not the municipality in which the proposed activities will take place, then the application must include a strong letter of support and commitment of cooperation from the applicable municipality Eligible applicants should have an existing downtown commercial area that generally has one or more of the following: a. a significant number of commercial structures fifty (50) years old or older; b. empty storefronts or documentation of an immediate threat to a downtown's commercial viability; c. a feasibility/market analysis identifying the businesses / activities which can be supported in the downtown area; d. a downtown master plan designed to guide public or private investment; e. commitment(s) for private / public funding to support downtown development activities (from banks, downtown development authorities, local businesses, other government agencies, etc.) enhancing, directly or indirectly the activity to be financed with the Department's loan. Eligible Activities Applicants must demonstrate that they have a viable downtown development project and clearly identify the proposed uses of the loan proceeds. Once established, funds may be used for: Real estate acquisition, clearance, development, redevelopment, and construction Reconstruction and rehabilitation of public and private infrastructure and facilities Purchase or lease of equipment or other assets (on a limited basis and as defined by the Department) Loans to sub-recipient organizations to carryout eligible activities Leaseback or sale of project assets (when approved by the Department) Assistance Amounts Loan limits will generally be set at no more than $250,000 per project. At its discretion, the Department may decide to loan an amount less than the amount requested in an application. Application Deadlines Applications will be accepted throughout the fiscal year and as loan funds are available to the Department. For further information contact: Steed Robinson Georgia Department of Community Affairs 60 Executive Park South, N.E. Atlanta, GA 30329-2231 (404) 679-1585 srobinso@dca.state.ga.us or Russell Morrison (404) 679-4825 rmorriso@dca.state.ga.us Note: The Department works closely with the Georgia Municipal Association (GMA) through its Georgia Cities Foundation Program (GCF) to assist Georgia's downtown communities with revitalization. For more information on the GCF, visit the GMA website at www.gmanet.com or contact Perry Hiott at 678-686-6207 or by email at phiott@gmanett.com 9 Redevelopment Fund General Description The Redevelopment Fund provides flexible financial assistance to local governments to assist them in implementing challenging economic and community development projects that cannot be undertaken with existing public sector grant and loan programs. The Redevelopment Fund will reward locally initiated public/private partnerships by providing financing to leverage private sector investments in commercial, downtown, and industrial redevelopment and revitalization projects that need Redevelopment Fund investment to proceed. While all CDBG funded projects that create jobs must meet applicable low and moderateincome criteria, the Redevelopment Fund will allow projects to be approved using a "eliminating slum and blight" national objective. The Redevelopment Fund may support and extend DCA's existing CDBG programs in order to allow redevelopment projects with "challenging economics" to be made competitive for DCA, private, and other public funding investments. Eligible Applicants cases where the Redevelopment Funds are to be loaned to or passed through a local development authority, the development authority itself would also be a "subrecipient" subject to the same rules and regulations as a benefiting business or corporation. Available Financing The maximum amount of assistance that can be applied for is $500,000. In cases of projects with exceptional public benefits or need, the Commissioner of DCA may raise the allowable assistance amount. For further information contact: Mitch Griggs Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329-2231 (404)-679-0593 mgriggs@dca.state.ga.us Eligible applicants under the Redevelopment Fund program are units of general purpose local governments classified as "non-entitlement" by the U.S. Department of Housing and Urban Development. Excluded are entitlement cities, metropolitan cities, urban counties, and other units of government eligible to participate in HUD's urban county program. Eligible Activities Eligible activities under the Redevelopment Fund are those identified in Title I of The Housing and Community Development Act of 1974, as amended, and all eligible activities under the Department's EIP, CDBG, and CDBG Loan Guarantee (Section 108) program. Activities are eligible to the extent that the funded activity meets the slum or blight national objective. When justified by benefits or need, the Commissioner of DCA may approve projects on a case by case basis based on any CDBG program national objective. Proposed activities must be based on firm written commitments from local governments and eligible sub-recipients. NOTE: For the Redevelopment Fund, the term "sub-recipient" may generally be interpreted as a business or corporation. However, in 10 Office of Downtown Development (ODD) The Georgia Department of Community Affairs, Office of Downtown Development focuses on economic development through downtown revitalization, heritage preservation and restoring a sense of place. The Georgia Main Street Program is ODDs flagship downtown development assistance program. Main Street is a self-help community development program designed to improve a downtowns quality of life. The Georgia Main Street Program includes a small-cities program called the Better Hometown Program, which focuses on cities with a population less than 5,000 and the Classic Main Street Program, which focuses on cities with a population between 5,000 and 50,000 and. To date, there are approximately 105 Georgia cities involved in the program. These programs develop local vision and leadership while actively facilitating the economic development of downtown using the National Main Street Centers 4-point Approach: Organization, Design, Economic Restructuring and Promotion. Each designated city receives technical assistance, manager/board training, regional networking sessions and resources, which assist the local community in their efforts to build a stronger local economy through revitalization of the downtown area. In addition, ODD manages the Urban Georgia Network, holds downtown-related trainings and workshops, and, in partnership with the Georgia Downtown Development Association, sponsors the annual Georgia Downtown Development Conference. Georgia Main Street Cities (1980-2003) MS-Main Street; BHT-Better Hometown Acworth (MS - 2000) Crawfordville (BHT - 1998) Alamo-Glenwood (BHT - 2001) Cuthbert (BHT - 2001) Alma (BHT - 2001) Dahlonega (BHT - 2000) Americus (MS - 1983) Dalton (MS - 1985) Ashburn (BHT - 2001) Darien (BHT - 1998) Athens (MS - 1980) Dawson (BHT - 1998) Augusta (MS - 1994) Donalsonville (BHT - 2001) Bainbridge (MS - 1990) Douglas (MS - 1987) Baxley (BHT - 2000) Douglasville (MS - 2000) Blackshear (BHT - 1997) Dublin (MS - 1989) Blakely (BHT - 1997) Duluth (MS - 2001) Blue Ridge (BHT - 1998) East Point (MS - 1999) Bremen (BHT - 1997) Eatonton (BHT - 1999) Brunswick (MS - 1986) Edison (BHT - 1998) Buchanan (BHT - 2000) Elberton (MS - 1991) Byron (BHT - 2000) Fayetteville (MS - 1996) Calhoun (MS - 1994) Fitzgerald (MS -1991) Camilla (BHT - 2002) Flowery Branch (BHT - 1999) Carrollton (MS - 1985) Folkston (BHT - 1999) Cartersville (MS - 1987) Forsyth (BHT - 2000) Cedartown (MS - 1988) Fort Valley (MS - 1991) College Park (MS - 1999) Gainesville (MS - 1995) Colquitt (BHT - 2000) Gordon (BHT - 2002) Commerce (MS - 1985) Greensboro (BHT - 1997) Cordele (MS - 1987) Griffin (MS - 1984) Cornelia (BHT - 2002) Hahira (BHT - 2001) Covington (MS - 1988) Hampton (BHT - 2002) Hapeville (MS - 2003) Hartwell (MS - 1997) Hawkinsville (BHT - 1999) Hazlehurst (BHT - 2001) Homerville ( BHT - 1998) Jefferson (BHT - 2001) LaGrange (MS - 1994) Lavonia (BHT - 1999) Lincolnton (BHT - 2000) Lyons (BHT - 1999) Madison (MS - 1984) Manchester (BHT - 1997) McDonough (MS - 2001) Metter ( BHT - 1998) Milledgeville (MS - 1988) Millen (BHT - 2001) Monticello (BHT - 1998) Moultrie (MS - 1988) Nashville (BHT - 2003) Newnan (MS - 1986) Oglethorpe (BHT - 2000) Pelham (BHT - 2002) Plains (BHT - 1999) Reynolds (BHT - 2001) Richland (BHT - 2000) Rome (MS - 1981) Royston (BHT - 2001) Sandersville (MS - 2001) Social Circle (BHT - 1998) Springfield (BHT - 2000) Statesboro (MS - 1990) Stone Mountain (MS - 1997) Summerville (BHT - 2000) Suwanee (BHT - 2000) Tallapoosa (BHT - 1999) Thomaston (MS - 1986) Thomasville (MS - 1981) Tifton (MS - 1986) Toccoa (MS - 1990) Trenton (BHT - 1998) Valdosta (MS - 1984) Vidalia (MS - 1989) Vienna (BHT - 2003) Warrenton (BHT - 2000) Washington (MS - 1981; BHT - 1999) Waycross (MS - 1980) West Point (BHT - 2001) Winder (MS - 1986) Woodbine (BHT - 2000) Wrens (BHT - 2000) Wrightsville (BHT - 1999) For more information, contact: Office of Downtown DevelopmentDepartment of Community Affairs 60 Executive Park South Atlanta, Georgia 30329 (404)679-3115 bparrish@dca.state.ga.us 11 Georgia Appalachian Region Business Development Revolving Loan Fund Program (RLF) The Business Development Revolving Loan Fund (RLF) is a $2.2 million pool of money administered by the Georgia Department of Community Affairs (DCA). DCA uses the money to allow local development authorities (LDA's) to make below market rate loans on a matching basis to qualified businesses in the Appalachian region of Georgia. The purpose of the RLF is to encourage economic development, downtown development, job creation and job retention, and the preservation and enhancement of historic districts and other business districts. The Appalachian Regional Commission (ARC) funds programs in the northern 37 counties: Banks, Barrow, Bartow, Carroll, Catoosa, Chattooga, Cherokee, Dade, Dawson, Douglas, Elbert, Fannin, Floyd, Forsyth, Franklin, Gilmer, Gordon, Gwinnett, Habersham, Hall, Haralson, Hart, Heard, Jackson, Lumpkin, Madison, Murray, Paulding, Pickens, Polk, Rabun, Stephens, Towns, Union, Walker, White, and Whitfield counties. Businesses Qualified to Receive RLF Funds Many businesses in the Appalachian Region potentially qualify for RLF funds, but the businesses with the greatest chance for RLF funding include manufacturing businesses, downtown businesses, and other businesses that do not compete with downtown uses. For downtown projects, DCA will have the final responsibility for defining the boundaries of a downtown for the purposes of the RLF. Generally, the downtown area is the core of a city's central business district. Only private, for-profit businesses are eligible to receive RLF loan funds. These include new, existing, or expanding enterprises. Banks, savings and loan institutions, and finance companies are not eligible for the program. Developers may receive RLF funds if their tenants are private, for-profit businesses that are willing to commit to job creation or retention and to other program requirements. Eligible Uses for Loan Proceeds working capital building acquisition new construction/rehabilitation facade improvements equipment purchase & installation land acquisition Please note that all applicable local, state, and federal laws and guidelines must be met before any activity is considered eligible and that all activities must produce positive results (including job creation or retention) for the area as well as for the business receiving financing. Ineligible Uses of the Loan Fund assistance to relocating businesses most refinancing displacement of private funds (i.e., projects must demonstrate need for favorable financing) speculative projects Loan Amounts and Loan Terms and Conditions An applicant may apply for funds from the RLF as many times as necessary as long as the RLF does not have a loan exposure greater than $200,000 for any one business. Total project costs may be any amount as long as the RLF financed portion of the project does not exceed 50%. Interest rates are usually two to four points below the prime rate. Loan terms normally do not exceed 5 years for working capital and 15 years for fixed assets. Interest rates may be fixed or variable, but are normally fixed. Businesses must provide at least five percent equity for their projects. Businesses must create or retain one private sector job for every $20,000 of RLF loan proceeds. 12 Loan Requirements and Application Steps meet with DCA to discuss application requirements obtain the approval of the local development authority to act as the lender of the RLF funds (DCA can assist in helping obtain development authority review of a proposed project) complete the application and all certifications application review by DCA's loan committee obtain design approval from DCA and a local design review board, if applicable, before beginning any construction or rehabilitation For further information contact: Russell Morrison (404) 679-4825 rmorriso@dca.state.ga.us Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 or Steed Robinson (404) 679-1585 srobinso@dca.state.ga.us Important Past investments do not usually count toward the 50% match that must be arranged by the borrower. Beginning the project prior to the date of the loan committee meeting may demonstrate that favorable financing for the project is not needed. (Note: DCA's loan committee may reject an application for any reasonable cause. Applications will normally be approved or rejected within 30 days after a completed application has been submitted.) 13 Appalachian Regional Commission Area Development Funds The Appalachian Regional Commission (ARC) provides federally funded infrastructure improvement and operational grants to north Georgia cities and counties to assist in the creation of permanent jobs. Local governments must compete annually for available funds; project grants are usually $300,000 or less. Eligible counties include Banks, Barrow, Bartow, Carroll, Catoosa, Chattooga, Dade, Dawson, Douglas, Fannin, Floyd, Franklin, Gilmer, Gordon, Habersham, Hall, Haralson, Heard, Jackson, Lumpkin, Madison, Murray, Paulding, Pickens, Polk, Rabun, Stephens, Towns, Union, Walker, White, and Whitfield counties. Program Objectives The program purpose is to assist economic development of Appalachian Region counties in Georgia by: 1. requiring significant near-term job creation as a result of each project's specific performance; 2. requiring that limited ARC dollars be used with projects that are most likely to be completed quickly, giving priority to projects that include substantial private investments; and 3. giving priority to projects that are consistent with documented local plans and strategies which support the five ARC goals and the state's strategic statement. Grant Amounts Available/Match Requirements Generally, Georgia will receive approximately $2.2 million for the program. Because of limited funds, grant amounts are available up to $300,000 for individual infrastructure projects.* Competition for the projects is keen and ARC normally funds up to 50% of project costs. In a number of Georgia's ARC counties, economic activity is so strong that the Commission restricts funding to 30% and in some counties may limit funding to certain types of projects. These include Bartow, Dawson, Douglas, Pickens, and Whitfield counties. Cherokee, Forsyth, and Gwinnett counties are designated as Attainment and funding is not available in these areas. Eligible Activities Most activities providing water and sewer services are eligible as long as program objectives are met by the proposed project. Projects related to the supply, storage, treatment, and transmission of water are eligible, and projects related to the collection, storage, and treatment of sewer are eligible. Education activities are presently limited to adult literacy and school drop out prevention. Ineligible Activities Ineligible activities include the construction of public buildings, to include libraries, cultural centers, hospitals, schools, and general government office buildings. Program Administration The program is administered by the Georgia Department of Community Affairs (DCA) in cooperation with the ARC. Pre-applications for the program are prepared by Regional Development Centers (RDC'S) on behalf of local governments in August of each year. DCA then works with RDC's and local governments to prepare a complete application for consideration by the Governor and ARC. Final approval for projects generally occurs in the summer of the following year after pre-application submission. For further information contact: James Thompson, ARC Program Manager Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 (404) 679-1584 jthompso@dca.state.ga.us * The amount for operational grants is usually less than $100,000. 14 Local Revolving Loan Funds (RLF's) Summary Local Revolving Loan Funds (RLF's) are potential sources of funding for new or expanding businesses in select areas throughout Georgia. The goal of each RLF is the creation of job opportunities, primarily for low and moderate-income persons. Program Requirements Loan applications are reviewed by the local RLF committee in accordance with locally adopted policies and procedures. The local RLF committee determines loan amounts, rates and terms. Competitive applications include: Funding Funds for each RLF are capitalized with a Community Development Block Grant (CDBG) and/or an Employment Incentive Program (EIP) loan(s). As loan repayments are made, the RLF is established. Loan applications are received and reviewed by the local RLF committee and government that operates the RLF. Eligible borrowers Loans to for-profit businesses Local development authorities A commitment to create jobs Firm commitments by other financial participants (leverage of $1:$1) Ability to service debt Personal guarantees Adequate collateral How to apply Call DCA for the RLF listed in your area. DCA will give you the contact person for the RLF. For further information, call Coleen Gelot at (404) 679-3110. Ineligible borrowers Lending and Investment Institutions Unregulated Media (Newspapers and magazines) Speculative ventures Charitable organizations Passive income companies Cities & Counties with Revolving Loan Funds (RLF's) Alma Americus Appling County Arabi Bainbridge Ben Hill Blackshear Bowman Cairo Calhoun Carrollton Clarke County Clinch County Cordele Crisp County Decatur County Dodge County Early County Eatonton Gainesville Glynn County Haralson County Heard County Homerville Lafayette Lanier County Liberty County Lumpkin Manchester McDuffie County McIntosh County Monticello Moultrie Mountain City Ocilla Pearson Pickens County Pierce County Preston Randolph County Rome Seminole County Swainsboro Sylvester Taliferro County Note: Fund size and availability vary by location. 15 Tel Fair County Thomas County Thomasville Thomson Tift County Toombs County Vidalia Wayscross Waynesboro Wilkinson County Willacoochee Worth County Wrens CDBG Loan Guarantee Program Program Description: The CDBG Loan Guarantee Program (Section 108) is a flexible economic and community development financing tool that can be utilized for certain large scale economic development projects that cannot proceed without loan guarantee assistance. Funds for this program are raised through a local government's sale of notes through federal underwriters following DCA's guarantee of the financing to the U.S. Department of Housing and Urban Development (HUD). Eligible Borrowers: General purpose, "non-entitlement" local governments. Local governments may (for DCA approved projects) re-loan the proceeds to for-profit businesses and local development authorities that may serve as eligible subrecipient borrowers. Rate: Interest rates are determined by the public market for government debt. Following DCA's (and ultimately HUD's) guarantee of the local debt, the note is "pooled" with other similar notes and sold to private investors by federal underwriters chosen by HUD. Because the notes are ultimately backed by the full faith and credit of the United States, the permanent interest rate on 108 loans will only be a few basis points higher than Treasury bond rates for similar terms. Interim rates will be a few basis points higher than the LIBOR rate. Repayment: Repayment is made by the participating local government. Local governments may generate revenue from leases or loans to sub-recipient entities to assist them in repaying loans. Eligible Activities: Acquisition of real property Clearance and removal of slums and blight Rehabilitation of real property owned by a public entity Site preparation, including construction, reconstruction, or installation of public utilities or facilities related to the redevelopment or reuse of the real property Other economic development activities eligible under the CDBG and EIP program Loan Amount: Maximum loan amount is $5,000,000 Terms and Conditions: Financing options will vary, but generally loan terms that are less than 10 years are most competitive. Local government with sound finances that provide certain "credit enhancements" may be able to arrange loan terms up to 20 years. In order to be approved by DCA, all projects will be subject to rigorous underwriting that documents a project's "economic viability". Local governments will generally be required to obligate themselves and document to DCA's satisfaction that all debt will be repaid. Underwriting Process: The Department will only "guarantee" financing for projects and local governments that it determines can generate sufficient revenue to service all debt obligations. Job Creation: Each funded activity must generally meet a minimum low and moderate-income benefit threshold of 70%. For further information contact: Brian Williamson, Director Georgia Department of Community Affairs 60 Executive Park South, N.E. Atlanta, Georgia 30329-2231 (404) 679-1587 bwilliam@dca.state.ga.us or Mitch Griggs (404) 679-0593 mgriggs@dca.state.ga.us 16 Regional Economic Assistance Projects (REAP) General Description The purpose of Regional Economic Assistance Projects (REAP) is to provide a mechanism for local and state governments and the private sector to cooperate on large-scale tourism-related projects with multiple uses that will create jobs and enhance the local tax base. Regional Economic Assistance Projects will assist in producing growth and development, particularly in rural areas, resulting in additional local tax revenue and providing high-caliber employment opportunities in the tourism and hospitality industries. Additional benefits include sound project development, consistent governmental review and approval, responsible project implementation, and project monitoring and reporting. Upon meeting the requirements of the statute and the REAP Rules, including local government endorsement and certification by the Georgia Department of Community Affairs, a developer of a certified REAP project may apply to the Georgia Department of Revenue for a state license for the sale of malt beverages, wine, or distilled spirits by the drink for consumption on the premises only. Eligibility Requirements In order to receive REAP certification, a project, in combination with any adjacent facility included by a reciprocal use agreement, must (a) be not less than 250 acres in size or located on or adjacent to a lake of not less than 2,500 acres in size, (b) where required, have zoning which is appropriate to the planned uses and plans which are consistent with other land use regulations, and (c) provide for at least three of the following criteria (a project that does not include an adjacent facility subject to a reciprocal-use agreement need only meet two of the criteria): (i) one or more regulation 18-hole golf courses, with a clubhouse providing food service, (ii) a commercial boat marina with at least 300 boat slips and a facility providing food service, (iii) a full-service restaurant with minimum seating for 75 or more persons, (iv) at least 100 residential units, (v) at least 200 rooms for overnight stays, (vi) conference facilities with capacity for 150 participants, or (vii) be located in a county in which a state-operated facility or authority provides services or products, or both, to the general public. The facilities of a REAP that meet the above criteria, excluding residential units, must have public access. Eligible Applicants Developers of projects that meet the REAP criteria are eligible to apply. Developer means an individual or organization that manages the development or maintenance of a project and is duly authorized to act as a representative of the project in a capacity such as a general partner, owner, or officer. Application Requirements In addition to the application requirements detailed in the REAP application package, an applicant for REAP certification must also provide (1) a resolution from the appropriate local government indicating that the project appears to meet the criteria set out in the Statute (specifically, O.C.G.A. section 50-8-191(c)) and approving the project and submission of the application to the Department for review and possible certification; and (2) a nonrefundable application and processing fee of $5,000. Assistance Amounts There is no financial assistance available under REAP. Deadlines Developers may submit a REAP application at any time. It is strongly recommended that potential applicants contact DCA prior to submitting an application. Reporting Requirements Pursuant to the REAP Rules, developers are required to submit annual progress reports in the form prescribed by DCA. For information on REAP contact: Susan Arrington Brown Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, GA 30329-2231 (404) 327-6841 sarringt@dca.state.ga.us 17 Opportunity Zones (HB 984) Opportunity zones (OZ) offer significant local, state, and federal incentives for the redevelopment of blighted areas. OZ's exist to better utilize several existing state statutes to further economic development, entrepreneurship and increases in private sector led investments through locally driven partnerships. Within certain geographic areas all over the state, these opportunities can be realized without the creation of new state programs or the appropriation of new state funds. Because the initiative relies on the innovative use of existing statutes, projects (and progress) can be realized quickly without bureaucratic delays. By fostering partnerships and adhering to a core principal of supporting "bottom up, locally driven" projects, HB984 passing will allow innovative, multi-faceted polices, programs and projects to emerge quickly. The statutes include: The Georgia Enterprise Zone Employment Act (O.C.G.A. 36-88-1 et seq.) The amendment, as passed by the legislature and signed by the Governor, expands the criteria for designating a State Enterprise Zone to allow blighted areas designated under the Georgia Urban Redevelopment Law (3661-2) as one of five eligible criteria (poverty, unemployment, general distress, underdevelopment and blight) for designation. In Zones established through local ordinance, an eligible business that makes a qualified capital investment and employs five (5) or more employees can qualify for local property tax abatements and relief from local business fees and regulations. Minimal cost to the state (0.25 mils property tax) Bottom-up, locally driven approach Synergies for collaboration with numerous local/ regional/state/federal and private investment and financing programs targeted to the same areas (20% poverty or greater). The Georgia Business Expansion and Support Act (the census tract portion of the law at O.C.G.A 48-740.1). Amendment allows businesses that expand or locate within census block groups having 20% or greater poverty included in a locally designated Enterprise Zone (36-88-1 et seq.) where a local Redevelopment Plan has also been adopted pursuant to Georgia's Urban Redevelopment Law (36-61-2) to take advantage of the state job tax credits normally only allowed in Tier One counties. The program would only be available to limited areas where local governments have invested significant "skin in the game" by providing local initiatives and incentives for redevelopment. A unique state/local partnership that would allow the state to recognize local initiative through the designation of a state "opportunity zone" once the local initiatives are accomplished. The proposed change would allow jobs tax credits to work more effectively for all rural, suburban and urban census areas that have "pockets of poverty" not recognized by the existing criteria. Limited cost to the state since targeted areas are experiencing little economic development Synergies for collaboration with numerous local/ regional/state/federal and private investment and financing programs targeted to the same areas (20% poverty or greater). For further information contact: Brian Williamson, Division Director Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329-2231 (404) 679-1587 bwilliam@dca.state.ga.us http://maps.rdis.org/website/poverty/viewer.htm 18 Georgia Business Expansion and Support Act Executive Summary INCOME TAX CREDITS JOB TAX CREDIT Provides for a statewide job tax credit for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries, but does not include retail businesses. If other requirements are met, job tax credits are available to businesses of any nature, including retail businesses, in counties recognized and designated as the 40 least developed counties. Counties and certain census tracts in the state are ranked and placed in economic tiers using the following factors: 1. highest unemployment rate; 2. lowest per capita income; and 3. highest percentage of residents whose incomes are below the poverty level. Tier 1 counties are ranked 1st through 71st and represent the state's least developed counties. Companies creating five or more new jobs in a Tier 1 county may receive a $3,500 tax credit. Tier 2 counties are ranked 72nd through 106th. Companies creating 10 or more new jobs in a Tier 2 county may receive a $2,500 tax credit. Tier 3 counties are ranked 107th through 141st. Companies creating 15 or more new jobs in a Tier 3 county may receive a $1,250 tax credit. Tier 4 counties are ranked 142nd through 159th. Companies creating 25 or more new jobs in a Tier 4 county may receive a $750 tax credit. The credit amounts listed above are applicable to new jobs created on or after January 1, 2001. Jobs created prior to January 1, 2001 are calculated at the credit amounts in place at the time the jobs were created. Credits similar to the credits available in Tier 1 counties are potentially available to companies in certain "less developed" census tracts in the metropolitan areas of the state. Note that average wages for the new jobs must be above the average wage of the county that has the lowest average wage of any county in the state. Also note that employers must make health insurance available to employees filling the new full-time jobs. Employers are not, however, required to pay all or part of the cost of such insurance unless this benefit is provided to existing employees. Credits are allowed for new full-time employee jobs for five years in years two through six after the creation of the jobs. In Tier 1 and Tier 2 counties and in "less developed" census tracts, the total credit amount may offset up to 100% of a taxpayer's state income tax liability for a taxable year. In Tier 3 and Tier 4 counties, the total credit amount may offset up to 50% of a taxpayer's state income tax liability for a taxable year. In Tier 1 counties and "less developed" census tracts only, credits may also be taken against a company's income tax withholding. (The maximum use of the tax credit against withholding is $3,500 per job regardless of any bonuses for either the joint development authority credit or the port authority credit.) A credit claimed but not used in any taxable year may be carried forward for 10 years from the close of the taxable year in which the qualified jobs were established. The measurement of new full-time jobs and maintained jobs is based on average monthly employment. Georgia counties are re-ranked annually based on updated statistics. See the Job Tax Credit law and regulations for further information. (See "Opportunity Zones" on page 18 for information on new census block group targeting opportunities.) JOB TAX CREDIT FOR JOINT DEVELOPMENT AUTHORITIES Provides for an additional $500 job tax credit per job for a business locating within the jurisdiction of a joint authority of two or more contiguous counties. INVESTMENT TAX CREDIT Based on the same tiers as the Job Tax Credit program. Allows a taxpayer that has operated an existing manufacturing or telecommunications facility or manufacturing or telecommunications support facility in the state for the previous three years (36 months) to obtain a credit against income tax liability. Companies expanding in Tier 1 counties must invest $50,000 to receive a 5% credit. That continues on next page 19 credit increases to 8% for recycling, pollution control, and defense conversion activities. Companies expanding in Tier 2 counties must invest $50,000 to receive a 3% tax credit. That credit increases to 5% for recycling, pollution control, and defense conversion activities. Companies expanding in Tier 3 or Tier 4 counties must invest $50,000 to receive a 1% credit. That credit increases to 3% for recycling, pollution control, and defense conversion activities. Generally, a taxpayer may not take both the job tax credit and the investment tax credit for the same project. OPTIONAL INVESTMENT TAX CREDIT Taxpayers qualifying for the investment tax credit may choose an optional investment tax credit with the following threshold criteria: Designated Area Minimum Investment %Tax Credit Tier 1 $5 Million ....................... 10% Tier 2 $10 Million ....................... 8% Tier 3 or Tier 4 $20 Million ....................... 6% The credit may be claimed for 10 years, provided the qualifying property remains in service throughout that period. A taxpayer must choose either the regular or optional investment tax credit. Once this election is made, it is irrevocable. RETRAINING TAX CREDIT The retraining tax credit allows some employers to claim certain costs of retraining employees to use new equipment, new technology, or new operating systems. The credit can be worth 50% of the direct costs of retraining full-time employees up to $500 per employee per approved retraining program per year. The credit cannot be more than 50% of the taxpayer's total state income tax liability for a tax year. Credits claimed but not used may be carried forward for 10 years. CHILD CARE CREDITS Employers who provide or sponsor child care for employees are eligible for a tax credit of up to 75% of the employers' direct costs. The credit cannot be more than 50% of the taxpayer's total state income tax liability for that taxable year. Any credit claimed but not used in any taxable year may be carried forward for five years from the close of the taxable year in which the cost of the operation was incurred. In addition, employers who purchase qualified child care property will receive a credit totaling 100% of the cost of such property. The credit is claimed at the rate of 10% a year for 10 years. The qualified property credit may be carried forward for three years from the close of the taxable year in which the qualified property is placed in service, and the limitation on the use of the credit in any one year is 50%. Recapture provisions apply if the property is transferred or committed to a use other than child care within 14 years after the property is placed in service. These two child care credits can be combined. The optional investment tax credit is calculated based upon a three-year tax liability average. The annual credits are then determined using this base year average. The credit available to the taxpayer in any given year is the lesser of the following amounts: 1. 90% of the increase in tax liability in the current taxable year over that in the base year, or 2. The excess of the aggregate amount of the credit allowed over the sum of the amounts of credit already used in the years following the base year. Generally, a taxpayer may not take both the job tax credit and the investment tax credit for the same project. RESEARCH & DEVELOPMENT TAX CREDIT A tax credit is allowed for research expenses for research conducted within Georgia for any business or headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries. The credit shall be 10% of the additional research expense over the "base amount," provided that the business enterprise for the same taxable year claims and is allowed a research credit under Section 41 of the Internal Revenue Code of 1986. The credit may be carried forward 10 years but may not exceed 50% of the business's remaining Georgia net income tax liability after all other credits have been applied for the current year. (Note that the base amount must contain positive Georgia taxable net income for all years.) continues on next page 20 SMALL BUSINESS GROWTH COMPANIES TAX CREDIT A tax credit is granted for any business or the headquarters of any such business engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development industries having a Georgia net taxable income in the current year which is 20% or more above that of the preceding year if its net taxable income in each of the two preceding years was also 20% or more. The credit shall be the excess over 20% of the percentage growth and shall not exceed 50% of the business's remaining Georgia net income tax liability after all other credits have been applied for the current year. The credit is available to companies whose total tax liability does not exceed $1.5 million. PORTS ACTIVITY JOB TAX & INVESTMENT TAX CREDITS Businesses or the headquarters of any such businesses engaged in manufacturing, warehousing and distribution, processing, telecommunications, tourism, or research and development that have increased their port traffic tonnage through Georgia ports during the previous 12-month period by more than 10% over their 1997 base year port traffic, or by more than 10% over 75 net tons, five containers or 10 20-foot equivalent units (TEU's) during the previous 12-month period are qualified for increased job tax credits or investment tax credits. NOTE: Base year port traffic must be at least 75 net tons, five containers, or 10 TEU's. If not, the percentage increase in port traffic will be calculated using 75 net tons, five containers, or 10 TEU's as the base. Companies must meet Business Expansion and Support Act (BEST) criteria for the county in which they are located. The job tax and investment tax credits are as follows: Tier 1 companies: An additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit. Tier 2 companies: An additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit. Tier 3 companies: An additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit. Tier 4 companies: An additional $1,250 per job, or 5% investment tax credit, or 10% optional investment tax credit. The additional job tax credit is limited to 50 percent of the taxpayer's Georgia net income tax liability in the current year regardless of the tier in which the jobs are located. The investment tax credit taken under the port traffic provision is limited to 50 percent of the taxpayer's net income tax liability. Any unused job or investment tax credit may be carried forward for ten years from the close of the taxable year in which the qualified jobs were established or the qualified property was placed in service. The optional investment tax credit taken under the port traffic provision shall be claimed for up to ten taxable years, provided the qualifying property remains in service throughout that period. Companies that create 400 or more new jobs, invest $20 million or more in new and expanded facilities, and increase their port traffic by more than 20% above their base year port traffic may take both job tax credits and investment tax credits HEADQUARTERS TAX CREDIT Companies establishing their headquarters or relocating their headquarters to Georgia may be entitled to a tax credit if the following criteria are met: 1) headquarters is defined as the principal central administrative offices of a company; 2) new jobs created at a new headquarters must be full-time (as defined by law and regulation) and must pay above the average wage for Tier 1 counties, at least 105% of the average wage for Tier 2 counties, at least 110% of the average wage for Tier 3 counties, and at least 115% of the average wage for Tier 4 counties; 3) within one year, a company must invest $1 million and create 50 jobs at a new headquarters facility; and 4) the company must elect not to take the job or investment tax credits. The credit is equal to $2,500 annually per new full-time job or $5,000 if the average wage of the new full-time jobs is 200% or more of the average wage of the county in which the new jobs are located. The credits apply for five years beginning with the year in which jobs are placed in service. The credit may be taken against Georgia income tax liability with any excess credit applied against a company's withholding taxes. Credits may be carried forward for 10 years. Other requirements include: 1) no new full-time jobs created after seven years from the close of the taxable year in which the taxpayer first becomes eligible for the credit may continues on next page 21 receive credits; and 2) the number of new full-time jobs shall be determined by comparing the monthly average of full-time jobs subject to Georgia income tax withholding for the taxable year with the corresponding average for the prior taxable year. SALES AND USE TAX EXEMPTIONS MANUFACTURING MACHINERY Provides for an exemption from the sales and use tax for: 1. Machinery used directly in the manufacture of tangible personal property when the machinery is bought to replace or upgrade machinery in a manufacturing plant presently existing in the state and machinery components which are purchased to upgrade machinery used directly in the manufacture of tangible personal property in a manufacturing plant; 2. Machinery used directly in the manufacture of tangible personal property when the machinery is incorporated as additional machinery for the first time into a manufacturing plant presently existing in this state; 3. Machinery which is used directly in the manufacture of tangible personal property when the machinery is incorporated for the first time into a new manufacturing plant located in this state; 4. Machinery used directly in the remanufacture of aircraft engines, parts, and components on a factory basis; 5. The sale or use of repair or replacement parts, machinery clothing or replacement machinery clothing, molds or replacement molds, dies or replacement dies, and tooling or replacement tooling for machinery used directly in the manufacture of tangible personal property in a manufacturing plant presently existing in this state. This exemption has been phased in over a 5-year period beginning on January 1, 2001 at 20% of the purchase price per year with a limitation of $150,000 per part; 6. Overhead materials consumed in the performance of certain contracts between the Department of Defense or NASA and a contractor engaged in manufacturing (this exemption has been phased in at a 25% increment rate each year from January 1, 1997 to January 1, 2004); and 7. The sale of machinery, equipment, and materials incorporated into and used in the construction or operation of a clean room of Class 100 or less in Georgia, provided that such clean room is used directly in the manufacture of tangible personal property. COMPUTER SALES AND USE TAX EXEMPTION The sale or lease of computer equipment to be used at a facility or facilities in this state to any high-technology company classified under certain NAICS Codes where such sale of computer equipment exceeds $15 million for any calendar year, or, where in the event of a lease of such computer equipment, the fair market value of such leased computer equipment exceeds $15 million for any calendar year. PRIMARY MATERIALS HANDLING SALES AND USE TAX EXEMPTION Purchases of primary material handling equipment and racking systems that are used directly for the storage, handling, and moving of tangible personal property in a new or expanding warehouse or distribution facility when such new facility or expansion is valued at $5 million or more and does not have greater than 15% retail sales are exempt from sales and use taxes. ELECTRICITY SALES AND USE TAX EXEMPTION Electricity purchased that interacts directly with a product being manufactured is exempt from sales taxes when the total cost of the electricity exceeds 50% of the cost of all materials used, including electricity, in making the product. This exemption requires a utility study to document the conditions of the exemption. For further information on job tax credits contact: Russell Morrison or Steed Robinson Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 (404) 679-4825 rmorriso@dca.state.ga.us or (404) 679-1585 srobinso@dca.state.ga.us Also see: www.dca.state.ga.us/economic/taxcredit.html continues on next page 22 For further information on retraining tax credits contact: Mike Grundmann Georgia Department of Technical and Adult Education 1800 Century Place, Suite 300 Atlanta, Georgia 30345-4304 (404) 679-2922 mgrundmann@georgiaquickstart.org Also see www.dtae.org/econdev/retrain.html For further information on income tax credits contact: Dawn Sturbaum Georgia Department of Revenue 1800 Century Center Boulevard Room 15318 Atlanta, Georgia 30345 (404) 417-2441 dsturbau@gatax.org Also see www2.state.ga.us/departments/dor/inctax/ info_taxcredits.shtml For further information on sales and use tax exemptions contact: Jon Galbraith Georgia Department of Revenue 1800 Century Center Boulevard Room 15310 Atlanta, Georgia 30345 (404) 417-6628 jgalbra@gatax.org Also see www2.state.ga.us/departments/dor/salestax/ index 23 Tax-Exempt Industrial Development Bond Financing For businesses seeking long-term, low-interest rate financing for the construction or improvements of manufacturing facilities, Industrial Development Bond (IDB) financing is available both at the state and local levels. IDB financing is typically structured as public sales in the nation's bond markets or sold as private placements with interested investors. In the case of publicly sold IDB's, credit enhancements in the form of letters of credit is often provided by local banks, insuring that a favorable interest rate to the borrower will result from the sale of bonds. Interest rate may be fixed or variable. Advantages Below-market interest rate financing generated through the sale of taxexempt bonds. Long-term, low-payment financing, with term matched to the useful life of the assets financed. Comprehensive use of funds for manufacturingrelated improvements, including purchase of land, construction or purchase and renovation of buildings, and purchase of new equipment. Up to $10 million available for each eligible project. Disadvantages State and federal limitations placed on IDB financed projects remain in effect until the bonds are retired. Issuance costs may limit the attractiveness of IDB financing for amounts below $3 million. How It Works The borrower applies to a local development authority (LDA) for an inducement of the project. The LDA holds a public hearing in the jurisdiction where the project will be built. The borrower's creditworthiness is analyzed and appropriate credit enhancement is arranged. Bonds are issued and sold, proceeds of the sale are disbursed to the borrower as a loan, and issuance fees are paid. (Up to 2% of issuance costs may be financed through a IDB sale.) Credit standards for IDB borrowers vary according to issuing authority and type of issuance: Public placement through local issuer: Borrower must meet minimum debt standards for the bonds. For further information contact: Bobby Stevens Georgia Department of Community Affairs 60 Executive Park South, N. E. Atlanta, GA 30329-2231 (404) 679-4943 www.dca.state.ga.us/economic/bond/html 24 Quality Growth Grant Program General Description In an effort to implement smart growth practices, which broadly include quality of life and growth management issues, the Department of Community Affairs offers the Quality Growth Grant Program (QGGP). Eligible Applicants All Georgia municipalities, counties and consolidated governments are eligible to apply for the QGGP. Eligible Activities Examples of eligible activities include, but are not limited to projects that promote growth management concepts, brownfield redevelopment, discourage urban sprawl and programs that preserve community heritage and critical environmental resources, give regional identify and provide public education on quality growth concepts. Funding Levels There are two funding rounds each year with application deadlines of November 15 and May 15. Grants can be requested for amounts between $5,000 and $40,000. A project must demonstrate a high level of innovation to be funded above $25,000. Recipient governments are expected to match the grant amount with cash and inkind services. For further information contact: Jim Frederick Georgia Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329-2231 404-679-3105 jfrederi@dca.state.ga.us Renewal Communities/ Empowerment Zones/Enterprise Communities (RC/EZ/EC) The federally designated Atlanta Renewal Community (which replaced the Atlanta Empowerment Zone but retains access to the EZ grant funds) and three Enterprise Communities receive federal grant funds through DCA. The initiative is designed to stimulate job, economic, and housing growth in the nation's most distressed urban and rural areas. Eligible businesses located in federally designated RC/EZ/EC areas can take advantage of additional tax incentives and bond financing. Information related to these federal tax incentives can be found at www.hud.gov. For further information contact: Susan Hart Ridley Department of Community Affairs 60 Executive Park South, NE Atlanta, Georgia 30329-2231 404-679-3128 shridley@dca.state.ga.us 25