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Incentives  Economic & Community Development One City Hall Place City of Coatesville, PA 19320 Phone: 610-384-0300 Fax: 610-384-3612 Neighborhood Assistance Enterprise Zone Tax Credit Program I. Background The Neighborhood Assistance Enterprise Zone Tax Credit Program is an economic development incentive funded by the State of Pennsylvania. The purpose of the program is to encourage private investment and promote job growth and economic development in state designated enterprise zones. The program authorizes tax credits against specified Pennsylvania taxes to private companies that make qualified investments to promote economic development or increase employment opportunities. Qualified investments are made through rehabilitation, expansion or improvement of buildings or land in state designated enterprise zones. II. Tax Credit Awards Tax Credits in the amount of 20% of funds invested may be awarded for rehabilitation, expansion or improvement of buildings or land in a state enterprise zone. Tax credits in the amount of 30% of funds invested may be awarded to projects meeting special program priorities. In order to qualify for a 30% tax credit a project must: 1 . Demonstrate that jobs will be created for low income individuals as a result of the investment. Project activities must create at least one job for a low income individual for each $15,000 of private investment and include coordination with a local private industry council, office of employment security or county assistance office to assure assistance of job placement of low income individuals. 2. Demonstrate that the project will include construction of substantial repair's to a publicly owned facility, for example: streets, sidewalks or street lights. Tax Credits may be awarded against the following State Taxes:
Projects are approved for a one year period and tax credits awarded may not exceed $250,000 annually, to any one company. Tax credits awarded but not utilized in the period in which the investment was made, may be carried over for a maximum period of five years. A financial audit of the program as well as a final program report is required. Ill. Application Procedure: The state's Neighborhood Assistance Act Enterprise Zone Tax application package must be used by all businesses and corporations submitting project applications and applying for tax credits under this program. Private non-profit organizations contact the Pennsylvania Department of Community Affairs, Bureau of Human Resources, directly. The requirements for making application for the Neighborhood Assistance Enterprise Zone Tax Credit program are as follows: 1 . A plan developed in cooperation with and approved by a neighborhood organization within the enterprise zone to be served. The involvement of a neighborhood organization, a community based, tax exempt, non-profit agency is mandated by Act 109. 2. A detailed description of the planned activities and the benefits that will
result from those activities. 4. A commitment to avoid or minimize dislocation of current residents. Prior to the start of a project, plans shall be submitted to the Pennsylvania Bureau of Human Resources and receive conditional approval by the Secretary in order to be eligible for Tax Credits under this program. IV. Submission of Application: An original and one copy of the completed application, budget, and certification from the cooperating neighborhood organization shall be submitted along with an original and two (2) copies of the completed and signed Letter of Agreement. Submit the entire application package and copies to: Director Inquiries regarding the Neighborhood Assistance Enterprise Zone Tax Credit Program and its application process may be directed to the: Pennsylvania Bureau of Human Resources, Room 358 Enterprise Zone Tax Credits Tax credits for investment in Enterprise Zones. Provides tax credits to businesses for construction related improvements, or purchase and/or rehabilitation of a facility within an Enterprise Zone. Tax credits equal 20% of amount invested up to $250,000 tax credits per project. . Tax credit to be applied to PA corporate tax liability (CNI). Credits received but not used may be carried for up to five years. Job Creation Tax Credits A $1,000-per-job tax credit to approved businesses that agree to create jobs within the Commonwealth within three years. Must create at least 25 new jobs or new jobs equaling at least 20% of the existing workforce. Tax credits cannot be utilized until the jobs are actually created. Pennsylvania Industrial Development Authority (PIDA) PIDA offers low interest loan financing to businesses, through Industrial Development Corporations, for land and building acquisition, new construction and renovation of existing structures resulting in creation or retention of jobs. PIDA can finance 30% to 50% of eligible land and building costs up to a maximum of $ 1.25 Million depending on firm size and unemployment rate. Funds would be loaned at a fixed interest rate for a term up to fifteen years. The current PIDA interest rate for the Greater Coatesville Area Enterprise Zone is 3.75%. Companies must agree to create or retain one job for each $25,000 financed. Machinery and Equipment Loan Fund (MELF) MELF can provide low interest financing towards the costs of acquiring and installing new or used machinery and equipment or to upgrade existing machinery and equipment. MELF can finance 50% of eligible machinery and equipment costs up to a maximum of $500,000. Funds would be loaned at an interest rate as low as 3.75%, for a term of up to seven years. Companies must agree to create or retain one job for each $25,000 financed. Customized Job Training (CJT) This program provides grant funds to business, through local education agencies, to develop and provide specialized job training to newly hired employees. Funds are to support the development of training activities that will enable businesses to improve efficiency and better complete in the global market place. Grant funds can be provided on a matching basis for preservation and upgrading of jobs that would otherwise be lost. CJT can provide grants to reimburse your company for costs incurred in providing job training to new manufacturing employees. Eligible costs include, but are not limited to, trainer salaries and expense, leasing fac7ilities in which training is conducted, consumable materials and curriculum development. Grants up to 100% of eligible costs for new job creation. Up to 70% for job retention. Infrastructure Development Program (IDP) Grant and low-interest loan financing for public and private infrastructure improvements IDP can provide grants and loans for eligible infrastructure improvements necessary for your project. Eligible uses if funds include, but are not limited, transportation facilities and airports, parking facilities, drainage systems, water and sewer systems, and acquisition of land, rights of way, and easements. Loans and grants up to $1.25 million. Loans to private business at 3% interest rates. Pennsylvania Capital Access Program (Penn -CAP) This program provides a loan guarantee through participating banks for businesses seeking to obtain commercial financing. The maximum limit for a loan guarantee is $500. No restriction is placed on the category of business that may apply for loan guarantee. The business applies for a loan directly with the participating bank of its choice. Pennsylvania Economic Development Financing Authority (PEDFA) PEDFA serves as an issuer of tax exempt and taxable bonds, both in pooled transactions and as stand alone transactions, on behalf of commonwealth businesses, nonprofits and municipalities. Minimum project amount is $400,000. Borrowers seeking bond financing through PEDFA generally must secure additional credit enhancement for bonds, which may involve a bank letter of credit. PEDFA bonds typically provide interest rates for borrowers that are substantially below interest rates charged by commercial banks. Pennsylvania Minority Business Development Authority (PMBDA) PMBDA offers low interest loan financing to businesses which are owned and operated by minorities. Interest rate is one half of prime but not less than 4%. Manufacturing, industrial, high technology, international trade or franchise companies: Maximum loan amount is $500,000 or $750,000 (within Enterprise Zone) or 75% of total eligible project costs, whichever is less. 25% percent private sector match required. Retail or commercial firms: Maximum loan amount is $250,000 or $350,000 (within Enterprise Zone) or 75% of total eligible project costs, whichever is less. 25% percent private sector match required. Small Business First This program offers low interest loan financing to small business (generally, 100 employees or less) for land and building acquisition and construction, machinery and equipment purchases and working capital. Maximum loan amount is $200,000 or 50% of eligible costs. Interest rate is 5%. Companies must agree to create or retain one job for each $25,000 financed. Chester County Development Council Small Business Assistance Program Funded by the Chester County Commissioners, the Small Business Assistance Program (SBAP) was established for the purpose of providing loans to small businesses locating or expanding in Chester County's Urban Centers. Loans will be made to stimulate business growth, job retention and job creation opportunities and to enhance the local community tax base. Eligible uses include land and building acquisition, machinery and equipment, working capital and inventory. Loan amounts can be up to 90% of financing needs to a maximum of $50,000. Working capital maximum is $25,000 and the minimum loan is $10,000. Current rate is prime plus 2 points. Borrower must agree to create one job for each $20,000 financed or retain one job for each $1 0,000 financed. Pennsylvania Infrastructure Investment Authority (PENNVEST) Low interest lands for design, engineering and construction of publicly and privately owned drinking water distribution and treatment facilities and/or safe sewage and storm water conveyance and treatment facilities. Will loan up to 11 million for one municipality; up to $20 million for more than one municipality. Up to $350,000 for design and engineering and up to 100% of projected cost. Interest rates range from 1% to 6% depending on the resulting user rates in the community; terms depend upon the useful life of the asset being financed; disbursement based upon reimbursable expenses. Ben Franklin Partnership (BFP) Promotes technological innovation through business/university partnerships. Offers a Challenge Grant Program for advanced technology, research and development, and startup companies. Can be used for research and development, technology transfer, joint research and development between private companies and universities, or entrepreneurial assistance and training. Usually range from $5,000 to $100,000 in grant form; often with royalty payback provision. |
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