COBI 2015 - Corporate Recruitment and Business Services

Overview
Issues
Background
Financials

Sources Uses

FY 2016 Appropriation

Corporate Recruitment and Business Services focuses on the retention and expansion of companies in the State. The program works with the Procurement Technical Assistance Program, the Manufacturer's Extension Partnership, and Business Resource Centers to provide services to companies within the state or to companies thinking of relocating to the state.

The program uses a wide range of incentives identified under the background section.

Funding History

Funding Issues

Compliance Staff for Incentives

Contract workload for incentives is increasing as the GOED board issues new incentives each year. Additional staff could help ensure that the companies receiving the incentives are complying with their contractual obligations.

Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $4,341,900 from all sources for Corporate Recruitment and Business Services. This is a 3.3 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $3,313,100 from the General/Education Funds, an increase of 8.6 percent from revised Fiscal Year 2015 estimates.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Amendments to Economic Development$100,000$0

OngoingOne-TimeFinancing Source

$100,000$0General Fund

Enactment of this legislation could forgo $14,600,000 in aggregate Education Fund over a 5 to 10 year period. Enactment of this legislation could cost the Governor's Office of Economic Development $210,000 ongoing from the General Fund beginning in FY 2016 for staff associated with compliance and reporting requirements and audit costs.

Compliance Staff for Incentives$110,000$0

OngoingOne-TimeFinancing Source

$110,000$0General Fund

Statute

The Industrial Assistance Fund was created in 1991. Statutory authority is provided in UCA 63M-1, Part 9. The purpose of the fund is to encourage the creation of quality jobs in Utah. The GOED Board has responsibility to approve all incentive recommendations.

UCA 63M-1 Part 24 established the Economic Development Zone Tax Increment Financing program to enhance the State's ability to attract and recruit new businesses to Utah. These refundable tax credits are based on new state revenues including income tax, sales tax, and corporate tax. By current policy, a qualifying applicant may receive up to a 30 percent tax rebate for up to 20 years.

The Motion Picture Incentive Fund was established in 2005 under 63M-1, Part 18 and funding for the fund relies tax credits and non-lapsing balances authorized by the Legislature.

Corporate Recruitment and Incentives

The mission of Corporate Recruitment and Incentives (CRI) is to "increase the number of quality jobs in Utah by helping existing companies expand and by recruiting new companies to the State." Financial incentives are available for business relocation and expansion for select companies that create new, high-paying jobs to help improve the standard of living, increase the tax base, attract and retain top-level management, and diversify the state economy. The following incentives are offered as either tax credits or grants.

Economic Development Tax Increment Financing (EDTIF)
Renewable Energy Development Incentive
Private Activity Bond Authority
Utah Recycling Market Development Zones
Life Science and Technology Tax Credits
Motion Picture Incentive Program

Business Manufacturing Productivity/Utah Manufacturing Extension Partnership

A key element of Utah's economic development strategy is to increase the productivity of Utah manufacturers. To accomplish this, the state manages a contract with the Utah Manufacturing Extension Partnership (UMEP). The UMEP is focused on helping small manufacturers in Utah improve the productivity, efficiency, and profitability of their businesses. UMEP provides counseling and support services to Utah's small manufacturing community. The UMEP is funded by the federal Department of Commerce, the State of Utah, and from fees for service activities.

The Manufacturing Extension Partnership (MEP) is a nationwide network of not-for-profit centers in over 400 locations nationwide, whose purpose is to provide small and medium sized manufacturers with help. The goal is to make it possible for even the smallest firms to tap into the expertise of knowledgeable manufacturing and business specialists all over the United States. These specialists are people who have had experience on manufacturing floors and plant operations. Each center works directly with area manufacturers to provide expertise and services tailored to their most critical needs. Solutions are offered through a combination of direct assistance from center staff and outside consultants.

Entrepreneurial Development/Small Business Centers

Business Resource Centers (BRCs) receive statutory authority under UCA 63M-1-2704. BRCs consolidate various business service providers in a single location so that business owners have a convenient place to go to get their questions answered. Staff is equipped to answer questions on business planning, tax structure, personnel, training, marketing, locations, contracting, administrative services, mentoring and funding. BRC staff also assists in coordinating the services of the local business service provider partners to make the delivery of the counseling and assistance more effective for the business customer, ensuring the business owner and managers receive all the help they need to be successful.

Procurement Technical Assistance

Procurement Technical Assistance Centers (PTAC) provide assistance to small and mid-sized Utah companies in obtaining federal, state or local government contracts. PTAC counselors provide one-on-one and group instruction to help clients identify contracting opportunities which may help increase their market share and revenues.

Intent Language

HB0003: Item 59

Under Section 63J-1-603 of the Utah Code, the Legislature intends that appropriations provided for the Governor's Office of Economic Development Business Development, Laws of Utah 2014, Chapter 10, Item 11 shall not lapse at the close of FY 2015. The use of any non-lapsing funds is limited to Business Cluster support: $75,000; Business Resource Centers: $350,000; Technology Commercialization and Innovation Program contracts: $3,000,000; International Development contracts and support: $500,000; Procurement and Technical Assistance Center contracts: $175,000; Rural Development contracts and support: $200,000; and Corporate Recruitment contracts and support: $100,000.

Funding is used to provide staff support to the program and to pass through funds to contracted entities.

Display By:

Funding Source

Expenditure Category

Appropriation Type:

Appropriation History by

Sources of Finance	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
General Fund	0	0	3,736,600	2,618,600	3,055,700	(12,000)	3,043,700	257,900	3,301,600
General Fund, One-time	0	0	750,000	1,033,200	6,500	0	6,500	5,000	11,500
Federal Funds	0	0	290,300	302,500	322,900	0	322,900	101,400	424,300
Dedicated Credits Revenue	0	0	129,900	113,300	354,000	0	354,000	500	354,500
GFR - Industrial Assistance	0	0	250,000	250,000	250,000	0	250,000	0	250,000
Beginning Nonlapsing	0	0	440,500	286,400	0	228,100	228,100	(228,100)	0
Closing Nonlapsing	0	0	(423,100)	(228,100)	0	0	0	0	0
Total	$0	$0	$5,174,200	$4,375,900	$3,989,100	$216,100	$4,205,200	$136,700	$4,341,900

Categories of Expenditure	FY11 Actual	FY12 Actual	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Personnel Services	0	0	1,363,900	1,515,800	1,898,800	(371,800)	1,527,000	153,300	1,680,300
In-state Travel	0	0	12,800	20,600	14,400	17,100	31,500	0	31,500
Out-of-state Travel	0	0	30,900	28,300	21,600	5,400	27,000	0	27,000
Current Expense	0	0	2,499,800	1,749,600	2,031,900	544,600	2,576,500	(17,200)	2,559,300
DP Current Expense	0	0	16,400	13,600	12,000	1,200	13,200	600	13,800
Other Charges/Pass Thru	0	0	1,250,400	1,005,400	10,400	19,600	30,000	0	30,000
Transfers	0	0	0	42,600	0	0	0	0	0
Total	$0	$0	$5,174,200	$4,375,900	$3,989,100	$216,100	$4,205,200	$136,700	$4,341,900

Show Table | Show Additional Information

Other Indicators	FY13 Actual	FY14 Actual	FY15 Approp	FY15 Change	FY15 Revised	FY16 Change	FY16 Approp
Budgeted FTE	14	12	12	0	12	0	12
Actual FTE	14.20	17.50	0	0	0	0	0
Vehicles	0	0	1	(1)	0	1	1

COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.