§ 2.2-115. Governor's Development Opportunity Fund.
As used in this section, unless the context requires otherwise:
"New job" means employment of an indefinite duration, created as the directresult of the private investment, for which the firm pays the wages andstandard fringe benefits for its employee, requiring a minimum of either (i)35 hours of the employee's time a week for the entire normal year of thefirm's operations, which "normal year" must consist of at least 48 weeks or(ii) 1,680 hours per year.
Seasonal or temporary positions, positions created when a job function isshifted from an existing location in the Commonwealth to the location of theeconomic development project, positions with suppliers, and multiplier orspin-off jobs shall not qualify as new jobs. The term "new job" shallinclude positions with contractors provided that all requirements includedwithin the definition of the term are met.
"Prevailing average wage" means that amount determined by the VirginiaEmployment Commission to be the average wage paid workers in the city orcounty of the Commonwealth where the economic development project is located.The prevailing average wage shall be determined without regard to any fringebenefits.
"Private investment" means the private investment required under thissection.
A. There is created the Governor's Development Opportunity Fund (the Fund) tobe used by the Governor to attract economic development prospects and securethe expansion of existing industry in the Commonwealth. The Fund shallconsist of any funds appropriated to it by the general appropriation act andrevenue from any other source, public or private. The Fund shall beestablished on the books of the Comptroller, and any funds remaining in theFund at the end of a biennium shall not revert to the general fund but shallremain in the Fund. Interest earned on the Fund shall be credited to theFund. The Governor shall report to the chairmen of the House Committees onAppropriations and Finance, and the Senate Committee on Finance as funds areawarded in accordance with this section.
B. Funds shall be awarded from the Fund by the Governor as grants or loans topolitical subdivisions. The criteria for making such grants or loans shallinclude (i) job creation, (ii) private capital investment, and (iii)anticipated additional state tax revenue expected to accrue to the state andaffected localities as a result of the capital investment and jobs created.Loans shall be approved by the Governor and made in accordance withguidelines established by the Virginia Economic Development Partnership andapproved by the Comptroller. Loans shall be interest-free unless otherwisedetermined by the Governor and shall be repaid to the Fund. The Governor mayestablish the interest rate to be charged; otherwise, any interest chargedshall be at market rates as determined by the State Treasurer and shall beindicative of the duration of the loan. The Virginia Economic DevelopmentPartnership shall be responsible for monitoring repayment of such loans andreporting the receivables to the Comptroller as required.
Beginning with the five fiscal years from fiscal year 2006-2007 throughfiscal year 2010-2011, and for every five fiscal years' period thereafter, ingeneral, no less than one-third of the moneys appropriated to the Fund inevery such five-year period shall be awarded to counties and cities having anannual average unemployment rate that is greater than the final statewideaverage unemployment rate for the calendar year that immediately precedes thecalendar year of the award. However, if such one-third requirement will notbe met because economic development prospects in such counties and cities areunable to fulfill the applicable minimum private investment and new jobsrequirements set forth in this section, then any funds remaining in the Fundat the end of the five-year period that would have otherwise been awarded tosuch counties and cities shall be made available for awards in the next fivefiscal years' period.
C. Funds may be used for public and private utility extension or capacitydevelopment on and off site; public and private installation, extension, orcapacity development of high-speed or broadband Internet access, whether onor off site; road, rail, or other transportation access costs beyond thefunding capability of existing programs; site acquisition; grading, drainage,paving, and any other activity required to prepare a site for construction;construction or build-out of publicly or privately owned buildings; training;or grants or loans to an industrial development authority, housing andredevelopment authority, or other political subdivision for purposes directlyrelating to any of the foregoing. However, in no case shall funds from theFund be used, directly or indirectly, to pay or guarantee the payment for anyrental, lease, license, or other contractual right to the use of any property.
It shall be the policy of the Commonwealth that moneys in the Fund shall notbe used for any economic development project in which a business relocates orexpands its operations in one or more Virginia localities and simultaneouslycloses its operations or substantially reduces the number of its employees inanother Virginia locality. The Secretary of Commerce and Trade shall enforcethis policy and for any exception thereto shall promptly provide writtennotice to the Chairmen of the Senate Finance and House AppropriationsCommittees, which notice shall include a justification for any exception tosuch policy.
D. 1. Except as provided in this subsection, no grant or loan shall beawarded from the Fund unless the project involves a minimum privateinvestment of $10 million and creates 100 new jobs for which the averagewage, excluding fringe benefits, is no less than the prevailing average wage.In localities with a population between 50,000 and 100,000, the minimumprivate investment shall be $5 million, creating 50 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. In localities with a population of 50,000 or less, the minimumprivate investment shall be $2.5 million, creating 25 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. Central cities or urban cores shall be treated for eligibilitypurposes the same as communities with a population between 50,000 and100,000. For projects for which the average wage of the new jobs created,excluding fringe benefits, is at least twice the prevailing average wage forthat locality or region, the Governor shall have the discretion to require noless than one-half the number of new jobs as set forth for that locality inthis subsection.
2. Notwithstanding the provisions of subdivision D 1, if a project is to belocated in a county or city whose annual average unemployment rate for themost recent calendar year is greater than the final statewide averageunemployment rate for the most recent calendar year, a grant or loan may beawarded from the Fund if the average wage of the new jobs, excluding fringebenefits, will be no less than 85% of the prevailing average wage. Inaddition, for projects in such counties and cities, the Governor may award agrant or loan for a project paying less than 85% of the prevailing averagewage but still providing customary employee benefits, only after theSecretary of Commerce and Trade has made a written finding that the economiccircumstances in the area are sufficiently distressed (i.e., highunemployment or underemployment and negative economic forecasts) thatassistance to the locality to attract the project is nonetheless justified.However, the minimum private investment and number of new jobs required to becreated as set forth in this subsection shall still be a condition ofeligibility for an award from the Fund. Such written finding shall promptlybe provided to the Chairmen of the Senate Finance and House AppropriationsCommittees.
3. Notwithstanding the provisions of subdivision 1, if a project is to belocated in a locality whose unemployment rate is one and one half times ormore the state average, the minimum private investment shall be adjusted to$7.5 million and the minimum number of new jobs created shall be adjusted to75 jobs for which the average wage, excluding fringe benefits, is no lessthan the prevailing average wage. In localities with a population between50,000 and 100,000, the minimum private investment shall be $3.5 million,creating 35 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. In localities with a populationof 50,000 or less, the minimum private investment shall be $1.5 million,creating 15 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. Localities qualifying under thissubdivision that have created Regional Industrial Facilities Authoritiespursuant to § 15.2-6402, shall be eligible at the lowest investment and jobcreation threshold of any locality in that Authority.
E. 1. The Virginia Economic Development Partnership shall assist the Governorin developing objective guidelines and criteria that shall be used inawarding grants or making loans from the Fund. The guidelines may include arequirement for the affected locality or localities to provide matching fundswhich may be cash or in-kind, at the discretion of the Governor. Theguidelines and criteria shall include provisions for geographic diversity anda cap on the amount of funds to be provided to any individual project. At thediscretion of the Governor, this cap may be waived for qualifying projects ofregional or statewide interest. In developing the guidelines and criteria,the Virginia Economic Development Partnership shall use the measure forFiscal Stress published by the Commission on Local Government of theDepartment of Housing and Community Development for the locality in which theproject is located or will be located as one method of determining the amountof assistance a locality shall receive from the Fund.
2. a. Notwithstanding any provision in this section or in the guidelines,each political subdivision that receives a grant or loan from the Fund shallenter into a contract with each business beneficiary of funds from the Fund.A person or entity shall be a business beneficiary of funds from the Fund ifgrant or loan moneys awarded from the Fund by the Governor are paid to apolitical subdivision and (i) subsequently distributed by the politicalsubdivision to the person or entity or (ii) used by the political subdivisionfor the benefit of the person or entity but never distributed to the personor entity.
b. The contract between the political subdivision and the businessbeneficiary shall provide in detail (i) the fair market value of all fundsthat the Commonwealth has committed to provide, (ii) the fair market value ofall matching funds (or in-kind match) that the political subdivision hasagreed to provide, (iii) how funds committed by the Commonwealth (includingbut not limited to funds from the Fund committed by the Governor) and fundsthat the political subdivision has agreed to provide are to be spent, (iv)the minimum private investment to be made and the number of new jobs to becreated agreed to by the business beneficiary, (v) the average wage(excluding fringe benefits) agreed to be paid in the new jobs, (vi) theprevailing average wage, and (vii) the formula, means, or processes agreed tobe used for measuring compliance with the minimum private investment and newjobs requirements.
The contract shall state the date by which the agreed upon private investmentand new job requirements shall be met by the business beneficiary of fundsfrom the Fund and may provide for the political subdivision to grant up to a15-month extension of such date if deemed appropriate by the politicalsubdivision subsequent to the execution of the contract. Any extension ofsuch date granted by the political subdivision shall be in writing andpromptly delivered to the business beneficiary, and the political subdivisionshall simultaneously provide a copy of the extension to the Virginia EconomicDevelopment Partnership.
The contract shall provide that if the private investment and new jobcontractual requirements are not met by the expiration of the date stipulatedin the contract, including any extension granted by the politicalsubdivision, the business beneficiary shall be liable to the politicalsubdivision for repayment of a portion of the funds provided under thecontract. The contract shall include a formula for purposes of determiningthe portion of such funds to be repaid. The formula shall, in part, be basedupon the fair market value of all funds that have been provided by theCommonwealth and the political subdivision and the extent to which thebusiness beneficiary has met the private investment and new job contractualrequirements. Any such funds repaid to the political subdivision that relateto the award from the Governor's Development Opportunity Fund shall promptlybe paid over by the political subdivision to the Commonwealth by paymentremitted to the State Treasurer. Upon receipt by the State Treasurer of suchpayment, the Comptroller shall deposit such repaid funds into the Governor'sDevelopment Opportunity Fund.
c. The contract shall be amended to reflect changes in the funds committed bythe Commonwealth or agreed to be provided by the political subdivision.
3. Notwithstanding any provision in this section or in the guidelines, priorto executing any such contract with a business beneficiary, the politicalsubdivision shall provide a copy of the proposed contract to the AttorneyGeneral. The Attorney General shall review the proposed contract (i) forenforceability as to its provisions and (ii) to ensure that it is inappropriate, legal form. The Attorney General shall provide any writtensuggestions to the political subdivision within seven days of his receipt ofthe copy of the contract. The Attorney General's suggestions shall be limitedto the enforceability of the contract's provisions and the legal form of thecontract.
4. Notwithstanding any provision in this section or in the guidelines, apolitical subdivision shall not expend, distribute, pledge, use as security,or otherwise use any award from the Fund unless and until such contract asdescribed herein is executed with the business beneficiary.
F. Within the 30 days immediately following June 30 and December 30 of eachyear, the Governor shall provide a report to the chairmen of the HouseCommittees on Appropriations and Finance and the Senate Committee on Financewhich shall include, but is not limited to, the following informationregarding grants and loans awarded from the Fund during the immediatelypreceding six-month period for economic development projects: the name of thecompany that is the business beneficiary of the grant or loan and the type ofbusiness in which it engages; the location (county, city, or town) of theproject; the amount of the grant or loan committed from the Fund and theamount of all other funds committed by the Commonwealth from other sourcesand the purpose for which such grants, loans, or other funds will be used;the amount of all moneys or funds agreed to be provided by politicalsubdivisions and the purposes for which they will be used; the number of newjobs agreed to be created by the business beneficiary; the amount ofinvestment in the project agreed to be made by the business beneficiary; thetimetable for the completion of the project and new jobs created; theprevailing average wage; and the average wage (excluding fringe benefits)agreed to be paid in the new jobs.
G. The Governor shall provide grants and commitments from the Fund in anamount not to exceed the dollar amount contained in the Fund. If the Governorcommits funds for years beyond the fiscal years covered under the existingappropriation act, the State Treasurer shall set aside and reserve the fundsthe Governor has committed, and the funds shall remain in the Fund for thosefuture fiscal years. No grant or loan shall be payable in the years beyondthe existing appropriation act unless the funds are currently available inthe Fund.
(1996, cc. 590, 598, 859, § 2.1-51.6:5; 1999, cc. 787, 816; 2001, c. 844;2006, cc. 251, 890; 2007, c. 654; 2010, cc. 78, 470, 580, 611, 735, 768.)
§ 2.2-115. Governor's Development Opportunity Fund.
As used in this section, unless the context requires otherwise:
"New job" means employment of an indefinite duration, created as the directresult of the private investment, for which the firm pays the wages andstandard fringe benefits for its employee, requiring a minimum of either (i)35 hours of the employee's time a week for the entire normal year of thefirm's operations, which "normal year" must consist of at least 48 weeks or(ii) 1,680 hours per year.
Seasonal or temporary positions, positions created when a job function isshifted from an existing location in the Commonwealth to the location of theeconomic development project, positions with suppliers, and multiplier orspin-off jobs shall not qualify as new jobs. The term "new job" shallinclude positions with contractors provided that all requirements includedwithin the definition of the term are met.
"Prevailing average wage" means that amount determined by the VirginiaEmployment Commission to be the average wage paid workers in the city orcounty of the Commonwealth where the economic development project is located.The prevailing average wage shall be determined without regard to any fringebenefits.
"Private investment" means the private investment required under thissection.
A. There is created the Governor's Development Opportunity Fund (the Fund) tobe used by the Governor to attract economic development prospects and securethe expansion of existing industry in the Commonwealth. The Fund shallconsist of any funds appropriated to it by the general appropriation act andrevenue from any other source, public or private. The Fund shall beestablished on the books of the Comptroller, and any funds remaining in theFund at the end of a biennium shall not revert to the general fund but shallremain in the Fund. Interest earned on the Fund shall be credited to theFund. The Governor shall report to the chairmen of the House Committees onAppropriations and Finance, and the Senate Committee on Finance as funds areawarded in accordance with this section.
B. Funds shall be awarded from the Fund by the Governor as grants or loans topolitical subdivisions. The criteria for making such grants or loans shallinclude (i) job creation, (ii) private capital investment, and (iii)anticipated additional state tax revenue expected to accrue to the state andaffected localities as a result of the capital investment and jobs created.Loans shall be approved by the Governor and made in accordance withguidelines established by the Virginia Economic Development Partnership andapproved by the Comptroller. Loans shall be interest-free unless otherwisedetermined by the Governor and shall be repaid to the Fund. The Governor mayestablish the interest rate to be charged; otherwise, any interest chargedshall be at market rates as determined by the State Treasurer and shall beindicative of the duration of the loan. The Virginia Economic DevelopmentPartnership shall be responsible for monitoring repayment of such loans andreporting the receivables to the Comptroller as required.
Beginning with the five fiscal years from fiscal year 2006-2007 throughfiscal year 2010-2011, and for every five fiscal years' period thereafter, ingeneral, no less than one-third of the moneys appropriated to the Fund inevery such five-year period shall be awarded to counties and cities having anannual average unemployment rate that is greater than the final statewideaverage unemployment rate for the calendar year that immediately precedes thecalendar year of the award. However, if such one-third requirement will notbe met because economic development prospects in such counties and cities areunable to fulfill the applicable minimum private investment and new jobsrequirements set forth in this section, then any funds remaining in the Fundat the end of the five-year period that would have otherwise been awarded tosuch counties and cities shall be made available for awards in the next fivefiscal years' period.
C. Funds may be used for public and private utility extension or capacitydevelopment on and off site; public and private installation, extension, orcapacity development of high-speed or broadband Internet access, whether onor off site; road, rail, or other transportation access costs beyond thefunding capability of existing programs; site acquisition; grading, drainage,paving, and any other activity required to prepare a site for construction;construction or build-out of publicly or privately owned buildings; training;or grants or loans to an industrial development authority, housing andredevelopment authority, or other political subdivision for purposes directlyrelating to any of the foregoing. However, in no case shall funds from theFund be used, directly or indirectly, to pay or guarantee the payment for anyrental, lease, license, or other contractual right to the use of any property.
It shall be the policy of the Commonwealth that moneys in the Fund shall notbe used for any economic development project in which a business relocates orexpands its operations in one or more Virginia localities and simultaneouslycloses its operations or substantially reduces the number of its employees inanother Virginia locality. The Secretary of Commerce and Trade shall enforcethis policy and for any exception thereto shall promptly provide writtennotice to the Chairmen of the Senate Finance and House AppropriationsCommittees, which notice shall include a justification for any exception tosuch policy.
D. 1. Except as provided in this subsection, no grant or loan shall beawarded from the Fund unless the project involves a minimum privateinvestment of $10 million and creates 100 new jobs for which the averagewage, excluding fringe benefits, is no less than the prevailing average wage.In localities with a population between 50,000 and 100,000, the minimumprivate investment shall be $5 million, creating 50 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. In localities with a population of 50,000 or less, the minimumprivate investment shall be $2.5 million, creating 25 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. Central cities or urban cores shall be treated for eligibilitypurposes the same as communities with a population between 50,000 and100,000. For projects for which the average wage of the new jobs created,excluding fringe benefits, is at least twice the prevailing average wage forthat locality or region, the Governor shall have the discretion to require noless than one-half the number of new jobs as set forth for that locality inthis subsection.
2. Notwithstanding the provisions of subdivision D 1, if a project is to belocated in a county or city whose annual average unemployment rate for themost recent calendar year is greater than the final statewide averageunemployment rate for the most recent calendar year, a grant or loan may beawarded from the Fund if the average wage of the new jobs, excluding fringebenefits, will be no less than 85% of the prevailing average wage. Inaddition, for projects in such counties and cities, the Governor may award agrant or loan for a project paying less than 85% of the prevailing averagewage but still providing customary employee benefits, only after theSecretary of Commerce and Trade has made a written finding that the economiccircumstances in the area are sufficiently distressed (i.e., highunemployment or underemployment and negative economic forecasts) thatassistance to the locality to attract the project is nonetheless justified.However, the minimum private investment and number of new jobs required to becreated as set forth in this subsection shall still be a condition ofeligibility for an award from the Fund. Such written finding shall promptlybe provided to the Chairmen of the Senate Finance and House AppropriationsCommittees.
3. Notwithstanding the provisions of subdivision 1, if a project is to belocated in a locality whose unemployment rate is one and one half times ormore the state average, the minimum private investment shall be adjusted to$7.5 million and the minimum number of new jobs created shall be adjusted to75 jobs for which the average wage, excluding fringe benefits, is no lessthan the prevailing average wage. In localities with a population between50,000 and 100,000, the minimum private investment shall be $3.5 million,creating 35 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. In localities with a populationof 50,000 or less, the minimum private investment shall be $1.5 million,creating 15 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. Localities qualifying under thissubdivision that have created Regional Industrial Facilities Authoritiespursuant to § 15.2-6402, shall be eligible at the lowest investment and jobcreation threshold of any locality in that Authority.
E. 1. The Virginia Economic Development Partnership shall assist the Governorin developing objective guidelines and criteria that shall be used inawarding grants or making loans from the Fund. The guidelines may include arequirement for the affected locality or localities to provide matching fundswhich may be cash or in-kind, at the discretion of the Governor. Theguidelines and criteria shall include provisions for geographic diversity anda cap on the amount of funds to be provided to any individual project. At thediscretion of the Governor, this cap may be waived for qualifying projects ofregional or statewide interest. In developing the guidelines and criteria,the Virginia Economic Development Partnership shall use the measure forFiscal Stress published by the Commission on Local Government of theDepartment of Housing and Community Development for the locality in which theproject is located or will be located as one method of determining the amountof assistance a locality shall receive from the Fund.
2. a. Notwithstanding any provision in this section or in the guidelines,each political subdivision that receives a grant or loan from the Fund shallenter into a contract with each business beneficiary of funds from the Fund.A person or entity shall be a business beneficiary of funds from the Fund ifgrant or loan moneys awarded from the Fund by the Governor are paid to apolitical subdivision and (i) subsequently distributed by the politicalsubdivision to the person or entity or (ii) used by the political subdivisionfor the benefit of the person or entity but never distributed to the personor entity.
b. The contract between the political subdivision and the businessbeneficiary shall provide in detail (i) the fair market value of all fundsthat the Commonwealth has committed to provide, (ii) the fair market value ofall matching funds (or in-kind match) that the political subdivision hasagreed to provide, (iii) how funds committed by the Commonwealth (includingbut not limited to funds from the Fund committed by the Governor) and fundsthat the political subdivision has agreed to provide are to be spent, (iv)the minimum private investment to be made and the number of new jobs to becreated agreed to by the business beneficiary, (v) the average wage(excluding fringe benefits) agreed to be paid in the new jobs, (vi) theprevailing average wage, and (vii) the formula, means, or processes agreed tobe used for measuring compliance with the minimum private investment and newjobs requirements.
The contract shall state the date by which the agreed upon private investmentand new job requirements shall be met by the business beneficiary of fundsfrom the Fund and may provide for the political subdivision to grant up to a15-month extension of such date if deemed appropriate by the politicalsubdivision subsequent to the execution of the contract. Any extension ofsuch date granted by the political subdivision shall be in writing andpromptly delivered to the business beneficiary, and the political subdivisionshall simultaneously provide a copy of the extension to the Virginia EconomicDevelopment Partnership.
The contract shall provide that if the private investment and new jobcontractual requirements are not met by the expiration of the date stipulatedin the contract, including any extension granted by the politicalsubdivision, the business beneficiary shall be liable to the politicalsubdivision for repayment of a portion of the funds provided under thecontract. The contract shall include a formula for purposes of determiningthe portion of such funds to be repaid. The formula shall, in part, be basedupon the fair market value of all funds that have been provided by theCommonwealth and the political subdivision and the extent to which thebusiness beneficiary has met the private investment and new job contractualrequirements. Any such funds repaid to the political subdivision that relateto the award from the Governor's Development Opportunity Fund shall promptlybe paid over by the political subdivision to the Commonwealth by paymentremitted to the State Treasurer. Upon receipt by the State Treasurer of suchpayment, the Comptroller shall deposit such repaid funds into the Governor'sDevelopment Opportunity Fund.
c. The contract shall be amended to reflect changes in the funds committed bythe Commonwealth or agreed to be provided by the political subdivision.
3. Notwithstanding any provision in this section or in the guidelines, priorto executing any such contract with a business beneficiary, the politicalsubdivision shall provide a copy of the proposed contract to the AttorneyGeneral. The Attorney General shall review the proposed contract (i) forenforceability as to its provisions and (ii) to ensure that it is inappropriate, legal form. The Attorney General shall provide any writtensuggestions to the political subdivision within seven days of his receipt ofthe copy of the contract. The Attorney General's suggestions shall be limitedto the enforceability of the contract's provisions and the legal form of thecontract.
4. Notwithstanding any provision in this section or in the guidelines, apolitical subdivision shall not expend, distribute, pledge, use as security,or otherwise use any award from the Fund unless and until such contract asdescribed herein is executed with the business beneficiary.
F. Within the 30 days immediately following June 30 and December 30 of eachyear, the Governor shall provide a report to the chairmen of the HouseCommittees on Appropriations and Finance and the Senate Committee on Financewhich shall include, but is not limited to, the following informationregarding grants and loans awarded from the Fund during the immediatelypreceding six-month period for economic development projects: the name of thecompany that is the business beneficiary of the grant or loan and the type ofbusiness in which it engages; the location (county, city, or town) of theproject; the amount of the grant or loan committed from the Fund and theamount of all other funds committed by the Commonwealth from other sourcesand the purpose for which such grants, loans, or other funds will be used;the amount of all moneys or funds agreed to be provided by politicalsubdivisions and the purposes for which they will be used; the number of newjobs agreed to be created by the business beneficiary; the amount ofinvestment in the project agreed to be made by the business beneficiary; thetimetable for the completion of the project and new jobs created; theprevailing average wage; and the average wage (excluding fringe benefits)agreed to be paid in the new jobs.
G. The Governor shall provide grants and commitments from the Fund in anamount not to exceed the dollar amount contained in the Fund. If the Governorcommits funds for years beyond the fiscal years covered under the existingappropriation act, the State Treasurer shall set aside and reserve the fundsthe Governor has committed, and the funds shall remain in the Fund for thosefuture fiscal years. No grant or loan shall be payable in the years beyondthe existing appropriation act unless the funds are currently available inthe Fund.
(1996, cc. 590, 598, 859, § 2.1-51.6:5; 1999, cc. 787, 816; 2001, c. 844;2006, cc. 251, 890; 2007, c. 654; 2010, cc. 78, 470, 580, 611, 735, 768.)
§ 2.2-115. Governor's Development Opportunity Fund.
As used in this section, unless the context requires otherwise:
"New job" means employment of an indefinite duration, created as the directresult of the private investment, for which the firm pays the wages andstandard fringe benefits for its employee, requiring a minimum of either (i)35 hours of the employee's time a week for the entire normal year of thefirm's operations, which "normal year" must consist of at least 48 weeks or(ii) 1,680 hours per year.
Seasonal or temporary positions, positions created when a job function isshifted from an existing location in the Commonwealth to the location of theeconomic development project, positions with suppliers, and multiplier orspin-off jobs shall not qualify as new jobs. The term "new job" shallinclude positions with contractors provided that all requirements includedwithin the definition of the term are met.
"Prevailing average wage" means that amount determined by the VirginiaEmployment Commission to be the average wage paid workers in the city orcounty of the Commonwealth where the economic development project is located.The prevailing average wage shall be determined without regard to any fringebenefits.
"Private investment" means the private investment required under thissection.
A. There is created the Governor's Development Opportunity Fund (the Fund) tobe used by the Governor to attract economic development prospects and securethe expansion of existing industry in the Commonwealth. The Fund shallconsist of any funds appropriated to it by the general appropriation act andrevenue from any other source, public or private. The Fund shall beestablished on the books of the Comptroller, and any funds remaining in theFund at the end of a biennium shall not revert to the general fund but shallremain in the Fund. Interest earned on the Fund shall be credited to theFund. The Governor shall report to the chairmen of the House Committees onAppropriations and Finance, and the Senate Committee on Finance as funds areawarded in accordance with this section.
B. Funds shall be awarded from the Fund by the Governor as grants or loans topolitical subdivisions. The criteria for making such grants or loans shallinclude (i) job creation, (ii) private capital investment, and (iii)anticipated additional state tax revenue expected to accrue to the state andaffected localities as a result of the capital investment and jobs created.Loans shall be approved by the Governor and made in accordance withguidelines established by the Virginia Economic Development Partnership andapproved by the Comptroller. Loans shall be interest-free unless otherwisedetermined by the Governor and shall be repaid to the Fund. The Governor mayestablish the interest rate to be charged; otherwise, any interest chargedshall be at market rates as determined by the State Treasurer and shall beindicative of the duration of the loan. The Virginia Economic DevelopmentPartnership shall be responsible for monitoring repayment of such loans andreporting the receivables to the Comptroller as required.
Beginning with the five fiscal years from fiscal year 2006-2007 throughfiscal year 2010-2011, and for every five fiscal years' period thereafter, ingeneral, no less than one-third of the moneys appropriated to the Fund inevery such five-year period shall be awarded to counties and cities having anannual average unemployment rate that is greater than the final statewideaverage unemployment rate for the calendar year that immediately precedes thecalendar year of the award. However, if such one-third requirement will notbe met because economic development prospects in such counties and cities areunable to fulfill the applicable minimum private investment and new jobsrequirements set forth in this section, then any funds remaining in the Fundat the end of the five-year period that would have otherwise been awarded tosuch counties and cities shall be made available for awards in the next fivefiscal years' period.
C. Funds may be used for public and private utility extension or capacitydevelopment on and off site; public and private installation, extension, orcapacity development of high-speed or broadband Internet access, whether onor off site; road, rail, or other transportation access costs beyond thefunding capability of existing programs; site acquisition; grading, drainage,paving, and any other activity required to prepare a site for construction;construction or build-out of publicly or privately owned buildings; training;or grants or loans to an industrial development authority, housing andredevelopment authority, or other political subdivision for purposes directlyrelating to any of the foregoing. However, in no case shall funds from theFund be used, directly or indirectly, to pay or guarantee the payment for anyrental, lease, license, or other contractual right to the use of any property.
It shall be the policy of the Commonwealth that moneys in the Fund shall notbe used for any economic development project in which a business relocates orexpands its operations in one or more Virginia localities and simultaneouslycloses its operations or substantially reduces the number of its employees inanother Virginia locality. The Secretary of Commerce and Trade shall enforcethis policy and for any exception thereto shall promptly provide writtennotice to the Chairmen of the Senate Finance and House AppropriationsCommittees, which notice shall include a justification for any exception tosuch policy.
D. 1. Except as provided in this subsection, no grant or loan shall beawarded from the Fund unless the project involves a minimum privateinvestment of $10 million and creates 100 new jobs for which the averagewage, excluding fringe benefits, is no less than the prevailing average wage.In localities with a population between 50,000 and 100,000, the minimumprivate investment shall be $5 million, creating 50 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. In localities with a population of 50,000 or less, the minimumprivate investment shall be $2.5 million, creating 25 new jobs for which theaverage wage, excluding fringe benefits, is no less than the prevailingaverage wage. Central cities or urban cores shall be treated for eligibilitypurposes the same as communities with a population between 50,000 and100,000. For projects for which the average wage of the new jobs created,excluding fringe benefits, is at least twice the prevailing average wage forthat locality or region, the Governor shall have the discretion to require noless than one-half the number of new jobs as set forth for that locality inthis subsection.
2. Notwithstanding the provisions of subdivision D 1, if a project is to belocated in a county or city whose annual average unemployment rate for themost recent calendar year is greater than the final statewide averageunemployment rate for the most recent calendar year, a grant or loan may beawarded from the Fund if the average wage of the new jobs, excluding fringebenefits, will be no less than 85% of the prevailing average wage. Inaddition, for projects in such counties and cities, the Governor may award agrant or loan for a project paying less than 85% of the prevailing averagewage but still providing customary employee benefits, only after theSecretary of Commerce and Trade has made a written finding that the economiccircumstances in the area are sufficiently distressed (i.e., highunemployment or underemployment and negative economic forecasts) thatassistance to the locality to attract the project is nonetheless justified.However, the minimum private investment and number of new jobs required to becreated as set forth in this subsection shall still be a condition ofeligibility for an award from the Fund. Such written finding shall promptlybe provided to the Chairmen of the Senate Finance and House AppropriationsCommittees.
3. Notwithstanding the provisions of subdivision 1, if a project is to belocated in a locality whose unemployment rate is one and one half times ormore the state average, the minimum private investment shall be adjusted to$7.5 million and the minimum number of new jobs created shall be adjusted to75 jobs for which the average wage, excluding fringe benefits, is no lessthan the prevailing average wage. In localities with a population between50,000 and 100,000, the minimum private investment shall be $3.5 million,creating 35 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. In localities with a populationof 50,000 or less, the minimum private investment shall be $1.5 million,creating 15 new jobs for which the average wage, excluding fringe benefits,is no less than the prevailing average wage. Localities qualifying under thissubdivision that have created Regional Industrial Facilities Authoritiespursuant to § 15.2-6402, shall be eligible at the lowest investment and jobcreation threshold of any locality in that Authority.
E. 1. The Virginia Economic Development Partnership shall assist the Governorin developing objective guidelines and criteria that shall be used inawarding grants or making loans from the Fund. The guidelines may include arequirement for the affected locality or localities to provide matching fundswhich may be cash or in-kind, at the discretion of the Governor. Theguidelines and criteria shall include provisions for geographic diversity anda cap on the amount of funds to be provided to any individual project. At thediscretion of the Governor, this cap may be waived for qualifying projects ofregional or statewide interest. In developing the guidelines and criteria,the Virginia Economic Development Partnership shall use the measure forFiscal Stress published by the Commission on Local Government of theDepartment of Housing and Community Development for the locality in which theproject is located or will be located as one method of determining the amountof assistance a locality shall receive from the Fund.
2. a. Notwithstanding any provision in this section or in the guidelines,each political subdivision that receives a grant or loan from the Fund shallenter into a contract with each business beneficiary of funds from the Fund.A person or entity shall be a business beneficiary of funds from the Fund ifgrant or loan moneys awarded from the Fund by the Governor are paid to apolitical subdivision and (i) subsequently distributed by the politicalsubdivision to the person or entity or (ii) used by the political subdivisionfor the benefit of the person or entity but never distributed to the personor entity.
b. The contract between the political subdivision and the businessbeneficiary shall provide in detail (i) the fair market value of all fundsthat the Commonwealth has committed to provide, (ii) the fair market value ofall matching funds (or in-kind match) that the political subdivision hasagreed to provide, (iii) how funds committed by the Commonwealth (includingbut not limited to funds from the Fund committed by the Governor) and fundsthat the political subdivision has agreed to provide are to be spent, (iv)the minimum private investment to be made and the number of new jobs to becreated agreed to by the business beneficiary, (v) the average wage(excluding fringe benefits) agreed to be paid in the new jobs, (vi) theprevailing average wage, and (vii) the formula, means, or processes agreed tobe used for measuring compliance with the minimum private investment and newjobs requirements.
The contract shall state the date by which the agreed upon private investmentand new job requirements shall be met by the business beneficiary of fundsfrom the Fund and may provide for the political subdivision to grant up to a15-month extension of such date if deemed appropriate by the politicalsubdivision subsequent to the execution of the contract. Any extension ofsuch date granted by the political subdivision shall be in writing andpromptly delivered to the business beneficiary, and the political subdivisionshall simultaneously provide a copy of the extension to the Virginia EconomicDevelopment Partnership.
The contract shall provide that if the private investment and new jobcontractual requirements are not met by the expiration of the date stipulatedin the contract, including any extension granted by the politicalsubdivision, the business beneficiary shall be liable to the politicalsubdivision for repayment of a portion of the funds provided under thecontract. The contract shall include a formula for purposes of determiningthe portion of such funds to be repaid. The formula shall, in part, be basedupon the fair market value of all funds that have been provided by theCommonwealth and the political subdivision and the extent to which thebusiness beneficiary has met the private investment and new job contractualrequirements. Any such funds repaid to the political subdivision that relateto the award from the Governor's Development Opportunity Fund shall promptlybe paid over by the political subdivision to the Commonwealth by paymentremitted to the State Treasurer. Upon receipt by the State Treasurer of suchpayment, the Comptroller shall deposit such repaid funds into the Governor'sDevelopment Opportunity Fund.
c. The contract shall be amended to reflect changes in the funds committed bythe Commonwealth or agreed to be provided by the political subdivision.
3. Notwithstanding any provision in this section or in the guidelines, priorto executing any such contract with a business beneficiary, the politicalsubdivision shall provide a copy of the proposed contract to the AttorneyGeneral. The Attorney General shall review the proposed contract (i) forenforceability as to its provisions and (ii) to ensure that it is inappropriate, legal form. The Attorney General shall provide any writtensuggestions to the political subdivision within seven days of his receipt ofthe copy of the contract. The Attorney General's suggestions shall be limitedto the enforceability of the contract's provisions and the legal form of thecontract.
4. Notwithstanding any provision in this section or in the guidelines, apolitical subdivision shall not expend, distribute, pledge, use as security,or otherwise use any award from the Fund unless and until such contract asdescribed herein is executed with the business beneficiary.
F. Within the 30 days immediately following June 30 and December 30 of eachyear, the Governor shall provide a report to the chairmen of the HouseCommittees on Appropriations and Finance and the Senate Committee on Financewhich shall include, but is not limited to, the following informationregarding grants and loans awarded from the Fund during the immediatelypreceding six-month period for economic development projects: the name of thecompany that is the business beneficiary of the grant or loan and the type ofbusiness in which it engages; the location (county, city, or town) of theproject; the amount of the grant or loan committed from the Fund and theamount of all other funds committed by the Commonwealth from other sourcesand the purpose for which such grants, loans, or other funds will be used;the amount of all moneys or funds agreed to be provided by politicalsubdivisions and the purposes for which they will be used; the number of newjobs agreed to be created by the business beneficiary; the amount ofinvestment in the project agreed to be made by the business beneficiary; thetimetable for the completion of the project and new jobs created; theprevailing average wage; and the average wage (excluding fringe benefits)agreed to be paid in the new jobs.
G. The Governor shall provide grants and commitments from the Fund in anamount not to exceed the dollar amount contained in the Fund. If the Governorcommits funds for years beyond the fiscal years covered under the existingappropriation act, the State Treasurer shall set aside and reserve the fundsthe Governor has committed, and the funds shall remain in the Fund for thosefuture fiscal years. No grant or loan shall be payable in the years beyondthe existing appropriation act unless the funds are currently available inthe Fund.
(1996, cc. 590, 598, 859, § 2.1-51.6:5; 1999, cc. 787, 816; 2001, c. 844;2006, cc. 251, 890; 2007, c. 654; 2010, cc. 78, 470, 580, 611, 735, 768.)
