1     
BUSINESS EXPANSION AND RETENTION

2     
INITIATIVE AMENDMENTS

3     
2018 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Christine F. Watkins

6     
Senate Sponsor: David P. Hinkins

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions related to the Business Expansion and Retention Initiative
11     and the Rural Fast Track Program.
12     Highlighted Provisions:
13          This bill:
14          ▸     requires that a certain amount of money from the Industrial Assistance Account be
15     available to the Rural Fast Track Program and the Business Expansion and
16     Retention Initiative each year;
17          ▸     requires the Governor's Office of Economic Development to consider a
18     recommendation from the Governor's Rural Partnership Board when awarding
19     financial assistance under the Rural Fast Track Program and the Business
20     Expansion and Retention Initiative;
21          ▸     describes the Business Expansion and Retention Initiative;
22          ▸     defines terms; and
23          ▸     makes technical changes.
24     Money Appropriated in this Bill:
25          None
26     Other Special Clauses:
27          None
28     Utah Code Sections Affected:

29     AMENDS:
30          63C-10-103, as last amended by Laws of Utah 2017, Chapter 252
31          63N-3-103, as renumbered and amended by Laws of Utah 2015, Chapter 283
32          63N-3-104, as last amended by Laws of Utah 2015, Chapter 115 and renumbered and
33     amended by Laws of Utah 2015, Chapter 283
34     ENACTS:
35          63N-3-104.5, Utah Code Annotated 1953
36     

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 63C-10-103 is amended to read:
39          63C-10-103. Duties.
40          (1) The board shall:
41          (a) serve as an advisory board to:
42          (i) the governor on rural economic and planning issues; and
43          (ii) the Governor's Office of Economic Development on rural economic development
44     issues;
45          (b) prepare an annual strategic plan that:
46          (i) identifies rural economic development, planning, and leadership training challenges,
47     opportunities, priorities, and objectives; and
48          (ii) includes a work plan for accomplishing the objectives referred to in Subsection
49     (1)(b)(i);
50          (c) identify local, regional, and statewide rural economic development and planning
51     priorities;
52          (d) study and take input on issues relating to local, regional, and statewide rural
53     economic development, including challenges, opportunities, best practices, policy, planning,
54     and collaboration;
55          (e) advocate for rural needs, programs, policies, opportunities, and other issues relating

56     to rural economic development and planning;
57          (f) review projects in enterprise zones proposed by nonprofit corporations
58     headquartered in enterprise zones as described in Subsection 63N-2-213.5(6); [and]
59          (g) review applications for cash awards, grants, loans, or other financial assistance
60     under:
61          (i) the Rural Fast Track Program described in Section 63N-3-104; and
62          (ii) the Business Expansion and Retention Initiative described in Section 63N-3-104.5;
63     and
64          [(g)] (h) no later than October 1 of each year, submit to the governor [and to], the
65     Legislature, and the Economic Development and Workforce Services Interim Committee an
66     annual report, in accordance with Section 68-3-14, that provides:
67          (i) an overview of the rural economy in the state;
68          (ii) a summary of current issues and policy matters relating to rural economic
69     development; and
70          (iii) a statement of the board's initiatives, programs, and economic development
71     priorities.
72          (2) The board may engage in activities necessary to fulfill the board's duties, including:
73          (a) propose or support rural economic development legislation; and
74          (b) create one or more subcommittees.
75          Section 2. Section 63N-3-103 is amended to read:
76          63N-3-103. Industrial Assistance Account created -- Uses -- Administrator duties
77     -- Costs.
78          (1) There is created a restricted account within the General Fund known as the
79     "Industrial Assistance Account" of which:
80          (a) up to 50% may be used in economically disadvantaged rural areas; and
81          (b) up to 25% may be used to take timely advantage of economic opportunities as they
82     arise[; and].

83          [(c) up to 4% may be used to promote business and economic development in rural
84     areas of the state with the Business Expansion and Retention Initiative.]
85          (2) The administrator shall administer[: (a)] the restricted account created under
86     Subsection (1)[,] under the policy direction of the board[; and].
87          [(b) the Business Expansion and Retention Initiative for the rural areas of the state.]
88          (3) The administrator may hire appropriate support staff to perform the duties required
89     under this section.
90          (4) The cost of administering the restricted account shall be paid from money in the
91     restricted account.
92          (5) Interest accrued from investment of money in the restricted account shall remain in
93     the restricted account.
94          Section 3. Section 63N-3-104 is amended to read:
95          63N-3-104. Rural Fast Track Program -- Creation -- Funding -- Qualifications
96     for program participation -- Awards -- Reports.
97          (1) (a) There is created the Rural Fast Track Program.
98          (b) The program is a funded component of the economically disadvantaged rural areas
99     designation in Subsection 63N-3-103(1)(a).
100          (2) [The purpose of the program is to] In awarding a grant, loan, or other financial
101     assistance under this section, the administrator shall:
102          (a) consider whether the award will:
103          (i) provide an efficient way for small companies in rural areas of the state to receive
104     incentives for [creating] capital investment; and
105          (ii) lead to the creation of high paying jobs in [those] rural areas of the state[.]; and
106          (b) request and consider a recommendation from the Governor's Rural Partnership
107     Board created in Section 63C-10-102 regarding an applicant seeking a grant, loan, or other
108     financial assistance under Subsection (5)(d).
109          (3) (a) [Twenty percent of the unencumbered amount in] Subject to available funds in

110     the restricted account, at least $1,500,000 from the Industrial Assistance Account created in
111     Subsection 63N-3-103(1) [at the beginning of each fiscal year] shall be used to fund the
112     program at the beginning of each fiscal year .
113          (b) The [20%] amount referred to in Subsection (3)(a) is not in addition to but is a part
114     of the up to 50% designation for economically disadvantaged rural areas referred to in
115     Subsection 63N-3-103(1)(a).
116          (c) If any of the [20% allocation] funding referred to in Subsection (3)(a) has not been
117     used in the program by the end of the third quarter of each fiscal year, that money may be used
118     for any other loan, grant, or assistance program offered through the Industrial Assistance
119     Account during the fiscal year.
120          (4) (a) To qualify for participation in the program a company:
121          (i) shall complete and file with the office an application for participation in the
122     program, signed by an officer of the company;
123          (ii) shall be located and conduct its business operations in a county in the state of the
124     third, fourth, fifth, or sixth class as described in Section 17-50-501;
125          (iii) [which] that is located and conducts its business operations in a county of the third
126     class [county] as described in Section 17-50-501, may not be located and conduct its business
127     operations within a city that has a:
128          (A) population of more than 20,000; or
129          (B) median household income of more than $70,000 as reflected in the most recently
130     available data collected and reported by the United States Census Bureau;
131          (iv) shall have been in business in the state for at least two years; and
132          (v) shall have at least two employees.
133          (b) (i) The office shall verify an applicant's qualifications under Subsection (4)(a).
134          (ii) The application must be approved by the administrator in order for a company to
135     receive an incentive or other assistance under this section.
136          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the

137     administrator may make rules governing:
138          (i) the content of the application form referred to in Subsection (4)(a)(i);
139          (ii) who qualifies as an employee under Subsection (4)(a)[(iv)](v); and
140          (iii) the verification procedure referred to in Subsection (4)(b).
141          (5) (a) The administrator shall make incentive cash awards to small companies under
142     this section based on the following criteria:
143          (i) $1,000 for each new incremental job that pays over 110% of the county's median
144     annual wage;
145          (ii) $1,250 for each incremental job that pays over 115% of the county's median annual
146     wage; and
147          (iii) $1,500 for each incremental job that pays over 125% of the county's median
148     annual wage.
149          (b) The administrator shall make a cash award under Subsection (5)(a) when a new
150     incremental job has been in place for at least 12 months.
151          (c) The creation of a new incremental job by a company is based on the number of
152     employees at the company during the previous 24 months.
153          (d) [(i)] A small company may also apply for grants, loans, or other financial assistance
154     under the program for capital investment to help develop its business in rural Utah and may
155     receive:
156          (i) up to $50,000 under the program if approved by the administrator[.]; or
157          [(ii) The board must approve a distribution that exceeds the $50,000 cap under
158     Subsection (5)(d)(i).]
159          (ii) over $50,000 under the program if approved by the administrator and the board.
160          (6) The administrator shall make [a quarterly] an annual report to the board of the
161     awards made by the administrator under this section and submit a report to the office on the
162     awards and their impact on economic development in the state's rural areas for inclusion in the
163     office's annual written report described in Section 63N-1-301.

164          Section 4. Section 63N-3-104.5 is enacted to read:
165          63N-3-104.5. Business Expansion and Retention Initiative -- Creation -- Funding
166     -- Qualifications for program participation -- Awards -- Reports.
167          (1) As used in this section:
168          (a) "Business resource centers" means the same as that term is defined in Section
169     63N-3-303.
170          (b) "Rural economic development entity" means a public, nonprofit, or private
171     organization primarily engaged in economic development efforts in a rural area of the state, and
172     may include:
173          (i) county, city, or tribal economic development offices;
174          (ii) associations of governments, established pursuant to an interlocal agreement under
175     Title 11, Chapter 13, Interlocal Cooperation Act;
176          (iii) business resource centers; or
177          (iv) small business development centers, established under the United States Small
178     Business Administration's small business development center program.
179          (2) (a) There is created the Business Expansion and Retention Initiative.
180          (b) The program is a funded component of the economically disadvantaged rural areas
181     designation in Subsection 63N-3-103(1)(a).
182          (3) In awarding a grant under this section, the administrator shall:
183          (a) consider whether the grant will:
184          (i) assist new and existing rural businesses;
185          (ii) influence rural job creation; and
186          (iii) diversify Utah's rural economies; and
187          (b) request and consider a recommendation from the Governor's Rural Partnership
188     Board created in Section 63C-10-102 regarding an applicant seeking financial assistance under
189     this section.
190          (4) (a) Subject to available funds in the restricted account, at least $350,000 from the

191     Industrial Assistance Account created in Subsection 63N-3-103(1) shall be used to fund the
192     program at the beginning of each fiscal year.
193          (b) The amount referred to in Subsection (4)(a) is not in addition to but is a part of the
194     up to 50% designation for economically disadvantaged rural areas referred to in Subsection
195     63N-3-103(1)(a).
196          (c) If any of the funding referred to in Subsection (4)(a) has not been used in the
197     program by the end of the third quarter of each fiscal year, that money may be used for any
198     other loan, grant, or assistance program offered through the Industrial Assistance Account
199     during the fiscal year.
200          (5) (a) To qualify for participation in the program a rural economic development entity:
201          (i) shall complete and file with the office an application for participation in the
202     program;
203          (ii) shall be located and conduct its operations in a county in the state of the third,
204     fourth, fifth, or sixth class as described in Section 17-50-501; and
205          (iii) that is located and conducts its operations in a county of the third class as
206     described in Section 17-50-501, may not be located and conduct its operations within a city
207     that has a:
208          (A) population of more than 20,000; or
209          (B) median household income of more than $70,000 as reflected in the most recently
210     available data collected and reported by the United States Census Bureau.
211          (b) (i) The office shall verify an applicant's qualifications under Subsection (5)(a).
212          (ii) The application must be approved by the administrator in order for a rural
213     economic development entity to receive a grant under this section.
214          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
215     administrator may make rules governing:
216          (i) the content of the application form referred to in Subsection (5)(a)(i); and
217          (ii) the verification procedure referred to in Subsection (5)(b).

218          (6) The board may issue a grant of no more than $30,000 to a single rural economic
219     development entity under this section in any calendar year.
220          (7) A rural economic development entity shall use a grant awarded under this section
221     to:
222          (a) conduct outreach and information gathering efforts to better understand the needs of
223     local businesses; or
224          (b) engage in other activity approved by the administrator that is intended to expand or
225     retain businesses in a rural area of the state.
226          (8) The administrator shall make an annual report to the board of the awards made by
227     the administrator under this section and submit a report to the office on the awards and their
228     impact on economic development in the state's rural areas for inclusion in the office's annual
229     written report described in Section 63N-1-301.