Brice Wallace
The Governor’s Office of Economic Opportunity (Go Utah) is resurrecting an old tool to help advance some economic development projects in the state.
The Industrial Assistance Fund, a popular incentive about two decades ago, had been mostly dormant but has been used more commonly during the past couple of years by the Go Utah board for a variety of needs.{mprestriction ids="1,3"}
Now known as the Industrial Assistance Account, the fund was one of the main incentives when Go Utah was known as the Division of Business and Economic Development in the Utah Department of Community and Economic Development and later as the Governor’s Office of Economic Development.
Starting in 2005, the most-often-used incentive has been is the Economic Development Tax Increment Finance tax credit. EDTIF allows incentivized companies to receive a portion of the new, additional state taxes the company pays to the state as the result of their project. They can get up to 30 percent of those new taxes over the life of a project, typically five to 20 years.
Established in 1991 and tweaked many times since then, the Industrial Assistance Account has broader applicability than EDTIF and typically is in the form of a grant rather than a tax credit.
Dan Hemmert, then-executive director of Go Utah, briefed board members about the IAA in November.
“We have a lot of leeway as to how we can use this money,” he said. “Historically, this account was established originally to make direct cash grants to companies. … It’s morphed over time. The statute has been modified, broadened, to give it a lot more leeway.”
The Legislature sometimes would use the IAA as a way of funding a project without going through the regular appropriation process, he said.
“We’ll probably see more and more of these,” board chairperson Carine Clark said in December. “As Dan Hemmert had said last time, he’d like to find ways to place funds to help Utah grow.”
The most recent use of the account was up to $3.6 million for Texas Instruments’ expansion project in Lehi. The Go Utah board approved the money for the company for water infrastructure development — increasing water reclamation and reducing water consumption — and employee development training.
The IAA funds will be used in concert with Texas Instruments’ $33.4 million EDTIF approved to expand its semiconductor wafer fabrication plant, an $11 billion project expected to create roughly 800 jobs.
In January, the Go Utah board approved two IAA fund projects. Owens Corning was approved for up to $321,264 for power impact fees related to its manufacturing facility expansion in Nephi. The company had been approved for an EDTIF tax credit of over $2.5 million over 10 years for the $52.5 million expansion, expected to result in 70 new jobs. Sundance was approved for up to $400,000 to compensate for a shortfall in funding in 2022 from the state Legislature.
In December, up to $500,000 was approved to support the creation of one or more fintech centers or programs at Utah’s universities or colleges.
Three IAA grants were approved in November. One, for up to $1 million, will support a water-saving subsurface drip irrigation pilot project in Northern Utah to determine if such a system would save water compared to a canal system. Another, for up to $1 million, will be used for manufacturing automated water valves designed to improve agriculture yields and save water. The third, for up to $425,000, will be used for local training programs within one or more of Utah’s public universities or colleges aimed at improving the leadership skills of business owners in rural areas.
A review of the IAA program in November showed several grants approved in 2021 and 2022:
• Hexcel Corp., $200,000 for infrastructure.
• American Packaging Corp., $75,000 for road improvements.
• Utah Department of Agriculture and Food, $5 million for emergency disaster relief.
• Entrepreneurship Academy, $500,000 for entrepreneurship training.
• Wasatch Business Finance Certified Development Co., $300,000 for general support and capital.
• VitalPax, $100,000 for infrastructure.
• Jabil Inc., $200,000 for infrastructure.
• $5.2 million for technical assistance for municipalities required to comply with station area planning.
• $500,000 for support of targeted industry trade associations.
• $1.5 million for rural county housing or water projects. {/mprestriction}
