Administrative Code

Virginia Administrative Code
10/26/2021

Part IV. Procedures for Qualifying for Enterprise Zone Job Creation Grants

13VAC5-112-260. Effective dates.

Beginning on July 1, 2005, a business firm shall be eligible to receive enterprise zone job creation grants for the creation of new permanent full-time positions above the threshold number.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007.

13VAC5-112-270. Computation of grant amount.

A. For any qualified business the grant amount is calculated as follows:

1. $800 per year for up to five consecutive years for each grant-eligible position that is paid a wage rate during the qualification year that is at least of 200% of the federal minimum wage in place during the qualification year, and that is provided with health benefits, or

2. $500 per year for up to five years for each grant-eligible position that is paid a wage rate during such year that is less than 200% of the federal minimum wage, but at least 175% of the federal minimum wage or the reduced wage rate threshold if in a high unemployment area, and that is provided with health benefits.

B. A business firm may receive grants for up to a maximum of 350 grant-eligible jobs annually.

C. Job creation grants are based on a calendar year. The grant amount for any permanent full-time position that is filled for less than a full calendar year must be prorated based on the number of full months worked.

1. In cases where a position is grant eligible for only a portion of a qualification year the grant amount will be prorated based on the number of full months the position was grant eligible. This shall include cases where changes in wage rate, health benefits, or the federal minimum wage rate change a position's grant eligibility.

2. In cases where a change in a grant-eligible position's wage rate or the federal minimum wage rate during a qualification year changes the per position maximum grant amount available for that position, the grant amount shall be prorated based on the period the position was paid a minimum of 200% of the federal minimum wage rate and the period the position was paid a minimum of 175% of the federal minimum wage or the reduced wage rate threshold if in a high unemployment area, but less than 200%.

D. The amount of the job creation grant for which a qualified business firm is eligible in any year shall not include amounts for grant-eligible positions in any year other than the preceding calendar year. Job creation grants shall not be available for any calendar year prior to 2005.

E. Permanent full-time positions that have been used to qualify for any other enterprise zone incentive pursuant to former §§ 59.1-270 through 59.1-284.01 of the Code of Virginia shall not be eligible for job creation grants and shall not be counted as a part of the minimum threshold of four new positions.

1. Large qualified business firms and large qualified zone residents may qualify for job creation grants pursuant to this section for permanent full-time positions that have been created above the permanent full-time positions as required by their documented negotiation agreement with the department pursuant to subdivision 2 of 13VAC5-112-20.

2. Small qualified business firms may qualify for job creation grants pursuant to this section for net new permanent full-time positions that have been created above the net new permanent full-time employees in the most recently reported qualification year.

3. Business firms that have previously qualified for department enterprise zone job grants may qualify for job creation grants pursuant to this section for net new permanent full-time positions that have been created above the net new permanent full-time positions in the most recently reported qualification year.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007; amended, Virginia Register Volume 26, Issue 1, eff. October 14, 2009; Volume 26, Issue 22, eff. August 4, 2010.

13VAC5-112-280. Eligibility.

A. A business firm shall be eligible to receive job creation grants for five consecutive years beginning with the first year of grant eligibility for permanent full-time positions created above the threshold number. Additional permanent full-time positions created during the remainder of years in the grant period are eligible for additional grant funding over the previous year's level or such positions may be used instead to begin a subsequent grant period pursuant to subsection B of this section.

B. A business firm may be eligible for subsequent five consecutive calendar-year grant periods if it creates new grant-eligible positions above the threshold number for its subsequent base year.

1. If a second or subsequent five-year grant period is requested within two years of the previous grant period, the subsequent base year will be the last grant year. The calculation of this subsequent base year employment will be determined by the number of permanent full-time positions in the preceding base year, plus the number of threshold positions, plus the number of grant-eligible positions in the final year of the previous grant period.

2. If a business firm applies for subsequent five consecutive calendar-year grant periods beyond the two years immediately following the completion of the previous five-year grant period, the business firm shall use one of the two preceding calendar years as the subsequent base year, at the choice of the business firm.

C. A business firm is eligible to receive enterprise zone job creation grants for any and all years in which the business firm qualifies in the five consecutive calendar years period commencing with the first year of grant eligibility.

D. Job creation grants shall be available beginning with calendar year 2005.

E. Any qualified business firm receiving a major business facility job tax credit pursuant to § 58.1-439 of the Code of Virginia shall not be eligible to receive an enterprise zone job creation grant under this section for any job used to qualify for the major business facility job tax credit.

F. The following positions are not grant eligible:

1. Those in retail, personal service or food and beverage service.

2. Those paying less than 175% of the federal minimum wage or that are not provided with health benefits.

3. Notwithstanding subdivision 2 of this subsection, in a high unemployment area those paying less than the reduced wage rate threshold or that are not provided with health benefits.

4. Seasonal, temporary or contract positions.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007; amended, Virginia Register Volume 26, Issue 22, eff. August 4, 2010; Volume 28, Issue 21, eff. July 18, 2012.

13VAC5-112-285. Eligibility for reduced wage rate threshold.

A. Prior to each qualification year, the department shall prepare the list of enterprise zone localities that are high unemployment areas that shall be used in determining eligibility for reduced wage rate thresholds for that qualification year.

B. Qualified business firms located in an enterprise zone listed as a high unemployment area are eligible to use the reduced wage rate threshold (150% of federal minimum wage) in qualifying for the $500 grant amount.

C. Once a qualified business is eligible for the reduced wage rate threshold it remains so through the end of its current five consecutive calendar-year grant period, regardless of changes to the unemployment rate of the enterprise zone locality.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 26, Issue 22, eff. August 4, 2010.

13VAC5-112-290. Application submittal and processing.

A. In order to claim the grant, an application must be submitted to the department on a prescribed form. Applicants shall provide other documents as prescribed by the department.

B. Local zone administrators must verify that the location of the business is in the enterprise zone in a manner prescribed by the department.

C. The accuracy and validity of information provided in such applications, including that related to permanent full-time positions, wage rates, and provision of health benefits are to be attested to by an independent certified public accountant licensed in Virginia through an agreed-upon procedures engagement conducted in accordance with current attestation standards established by the American Institute of Certified Public Accountants, using procedures provided by the department as assurance that the firm has met the criteria for qualification prescribed in this section.

D. Business firms with base year employment of 100 or fewer permanent full-time positions and that create in a qualification year 25 or fewer grant eligible positions seeking to qualify for job creation grants as provided for in § 59.1-547 of the Code of Virginia shall be exempt from the attestation requirement for that qualification year. The permanent full-time positions, wage rates, and provision of health benefits of such business firms shall be subject to verification by the department.

E. In order to request job creation grants, business firms shall submit the application form, final attestation report, if an attestation is required, and all required documentation to the department by no later than April 1 of the calendar year subsequent to the qualification year.

F. If the April 1 due date falls on a weekend or holiday, applications are due the next business day.

G. Applications submitted by April 1 without the required attestation report shall be considered late applications and processed according to subsection I of this section.

H. The department shall notify the business in writing of any incomplete or missing required documentation or request written clarification from the business firm on information provided by no later than May 15. Business firms must respond to any unresolved issues by no later than June 1. If the department does not meet its May 15 date for notification, then businesses must respond to any unresolved issues within 10 calendar days of the actual notification.

I. Any applications with the required final attestation report and required documentation submitted after the April 1 due date but before May 15 of the calendar year subsequent to the qualification year will be held until the department determines that funds remain and it will not have to prorate grant awards. At such time, the department will review and process such applications and any applications pursuant to subsection F of this section on a first-come first served basis.

J. The department shall award job creation grants and notify all applicants by June 30 as to the amount of the grant they shall receive.

K. Applications must be received by the department, as specified by the department, no later than the date specified in this section.

L. Applicants may only apply for grants that they are otherwise eligible to claim for such calendar year, subject to the limitations provided by 13VAC5-112-400.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007; amended, Virginia Register Volume 27, Issue 26, eff. September 28, 2011; Volume 35, Issue 23, eff. August 7, 2019; Volume 37, Issue 13, eff. April 1, 2021.

13VAC5-112-300. Accuracy and validity of information.

A. The department may at any time review qualified zone businesses records related to qualification under this section to assure that information provided in the application process is accurate.

B. Qualified zone businesses shall maintain all documentation regarding qualification for enterprise zone job creation grants for at least one year after the final year of their five-year grant period.

C. Job creation grants that do not have adequate documentation regarding permanent full-time positions, wage rates and provision of health benefits may be subject to repayment by the qualified zone business.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007.

13VAC5-112-310. Anti-churning.

No grant shall be allowed for any permanent full-time position:

1. That a grant under this chapter was previously earned by a related party, as defined by the Internal Revenue Code § 267(b), or a trade or business under common control;

2. Where an employee filling that position was previously employed in the same job function in Virginia by a related party, or a trade or business under common control;

3. That was previously performed at a different location in Virginia by an employee of the taxpayer, a related party, or a trade or business under common control;

4. That previously qualified for a grant in connection with a different enterprise zone locality on behalf of the taxpayer, a related party, or a trade or business under common control; or

5. That was filled in the Commonwealth of Virginia and the trade or business where that position was located was purchased by another taxpayer.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007.

13VAC5-112-320. Qualification in zones whose designation period is ending.

Business firms located in a zone whose designation period is ending that have qualified by or before the zone expiration date may receive the balance of their five consecutive year incentive period provided they continue to qualify under 13VAC5-112-270 and 13VAC5-112-280. Firms may initiate a five-year grant period based on grant-eligible positions created up to the date of the zone expiration date notwithstanding 13VAC5-112-290. Business firms may not begin additional five-year grant period after the zone expiration date.

Statutory Authority

§ 59.1-541 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 23, Issue 12, eff. March 21, 2007.

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