Local Financial Incentives

Qualification Criteria

In order for a client to be considered for incentive participation, the city will conduct an economic impact analysis for the proposed project being developed by the client. This analysis will review both the assets and liabilities the project will bring to the city. The analysis will address the following:

  • Number of permanent new positions/jobs to be created
  • Wage and benefit package provided for the position/job
  • Type of jobs to be provided
  • Amount of private investments in the project
  • Source of the private investment, and commitment of the investment
  • Size of the building required or planned for construction
  • City services required and impact on: water, roads, sewer, storm water, fire/police

Other variables that will be included in the impact analysis include: Sales taxes generated, Franchise taxes paid, Future company expansions, Term of commitment of the company, and Potential spin-off development

Types of Incentives

Enterprise Zones

The Act passed by the Utah State Legislature provides tax credits for companies locating in rural areas that qualify for assistance. Richfield’s Commercial Center has been designated an Enterprise Zone making these incentives available to qualified tenants.

Job Creation Tax Credits (may claim for up to 30 full-time positions per tax year):

  1. A $750 tax credit for each new full-time position filled for at least six months during the tax year;
  2. An additional $500 tax credit if the new position pays at least 125% of the county average monthly wage for the respective industry (determined by the Utah Dept. of Employment Security). In the event this information is not available for the respective industry, the position must pay at least 125% of the total average monthly wage in the county;
  3. An additional $750 tax credit if the new position is in a business which adds value to agricultural commodities through manufacturing or processing;

An additional $200 tax credit, for two consecutive years, for each new employee insured under an employer-sponsored health insurance program, if the employer pays at least 50% of the premium.

Economic Development Area/Tax Increment Financing

Tax Increment Financing (TIF) is utilized in areas that have been targeted for economic development. Economic Development Areas (EDA’s) are set up and administered by local and municipalities. Portions of the new property tax generated by the new development (i.e., capital investment in building, property and land) can be returned to the company in the form of infrastructure development, land cost write-downs or other appropriate means. Up to 100% (less housing and administration costs) of the new property tax can be returned to a company for up to 15 years, or up to 75% of the new property tax can be returned to a company for up to 24 years. Each municipality constitutes a board, which votes on the approval of Tax Increment Financing for individual companies and their projects. Amounts are negotiated on a project-by-project basis between the Richfield Redevelopment Agency and the company after the economic impact analysis is completed.

The value of this incentive depends on the increase value of real property and land the company generates by locating in the Commercial Center.

Impact Fee Waiver

The City may use its connection and impact fee schedule as a way to offset costs for locating in the Commercial Center. Waivers could range between zero and 100% of the fee depending on the size of the utility connection.

Land Write-downs

The City may use its ownership of the land as a means to help offset some costs to the applicant. The value of the write-down could be anywhere between zero and 100%. Land is currently priced at $45,000 per acre.

Revolving Loan Fund

The Six County Association of Governments in Richfield operates a Revolving Loan Fund (RLF) utilizing a variety of federal resources. The maximum policy loan is $150,000 and can be used for any purpose (land, building, working capital). Funding requires that 1 job be created for every $20,000 loaned.

Contact Malcolm Nash of Sevier County for more information (435) 893-0454.

Custom Fit Training

The Custom Fit Program provides training for new or expanding companies. A Custom Fit representative will discuss with the company the training needs anticipated and then develop a specific customized training plan to meet those needs. The required training can take place at a variety of locations including the business or a local institution. Often training is provided in both locations. The program can provide instructors from Snow College—Richfield, the private sector, consultants or instructors within the business. The program is designed to be flexible to meet the specific needs of the company. Limits include an average of $500 per employee per year.

Contact Keith Church at (435) 893-2252.

Employee Recruitment and Testing

The Utah Department of Workforce Services offices utilize a computerized, job-matching system that quickly screens applicants to ensure that they meet the qualifications set by a company. Workforce Services personnel can save countless hours by taking all of a company’s applications, and then referring only the most-qualified applicants.

In addition to these services, space is available at Workforce Services offices for company staff to interview applicants, or Workforce Services employees can assist the personnel office on the company premises. Special programs such as Affirmative Action, Targeted Job Tax Credits and Veterans programs are also available.

The services offered for employers conducting a mass hiring are outlined as follows.

  1. Pre-screening of Job Applicants
    • Computerized job-matching system to recruit qualified applicants
    • Pre-employment testing
    • Advertising job openings in newspapers and/or on radio stations
    • Market Information
    • Wage information per occupation
    • Number of available applicants in computer system sorted by occupational code
  2. Other Services
    • Space in an office for employers to interview job applicants
    • Workforce Services employees can assist your personnel office on the company premises.

A recent study estimated the salaries/benefit cost for processing and interviewing applicants at $189 per hired applicant. The majority of this expense is in the initial recruitment, application and pre-screening process.

Contact Lela King at the Richfield Office, (435) 893-0016.

USDA Business & Industrial Loan Guarantee Program

The program’s primary purpose is to create and maintain employment and improve the economic climate in rural communities. The loan guarantees have a maximum of $10,000,000 although the RBS Administrator can grant up to $25 million. Generally less equity injection is required with longer repayment terms (machinery & equipment – 15-years or useful life, real estate – 30-years). It reduces concerns regarding collateral/appraisal issues in smaller communities. These loans are often processed with the assistance of a private bank.

Contact Richard Carrig in Salt Lake City at (801) 524-4328 (office) or (801) 552-7357 (cell) or Malcolm Nash at (435) 893-0454.

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