Governor Deal signs RURAL bill
DCA lauds new tools to help revitalize rural downtowns
Atlanta, GA (May 8, 2017) – Gov. Nathan Deal today signed the RURAL (Revitalizing Underdeveloped Rural Areas Legislation) bill, HB 73, a comprehensive package that integrates multiple resources to help build new opportunities for rural economic development. The legislation offers incentives for job creation, commercial investment, and business activity in rural downtown areas through a series of tax credits: a job tax credit, an investment credit and a rehabilitation credit.
“While landing a big corporate prospect is not unheard of, economic growth in a rural area is much more likely to be organic,” said Camila Knowles, Commissioner of Georgia’s Department of Community Affairs. “This gives us the tools to encourage rural residents to take a chance and open that coffee shop or flower shop they’ve always dreamed of running.”
The RURAL bill targets rural downtown areas that have been adversely impacted by local economic conditions by creating Rural Revitalization Zones and offering economic development incentives. It differs from other programs at DCA which provide technical assistance and access to capital because it would establish an incentive program to stimulate investment, job creation, and economic development. It also adds in retail opportunities, which are currently excluded from job tax credits. Further, multiple sources can benefit – for instance, a single new coffee shop might provide job tax credits for the local business owner, an investment credit to an urban investor and a rehabilitation credit to a local contractor.
The Job Tax Credit (JTC) will be $2,000 per new full-time equivalent job per year, up to 5 years and not to exceed $200,000 total or $40,000 per year. New full-time equivalent job means an aggregate of employee worked hours totaling 40 hours per week between two or more employees. This credit is for the small business owner who opens a storefront and creates jobs.
The Investment Credit is equivalent to 25% of the purchase price, not to exceed $125,000 total or $25,000 per year. This credit is for people who purchase a building downtown and cannot be taken unless jobs are created and JTC is taken.
The Rehabilitation Credit is equivalent to 30% of the qualified rehabilitation, not to exceed $150,000 total or $30,000 per year. This credit is to offset development costs associated with the rehabilitation of a certified investor property.
“Our goal is to bring development activity back to our rural downtowns, and draw people back to the heart of their communities,” Knowles said. “We want to focus resources on shoring up what’s really special about Georgia – the charm, history and sense of community of our rural downtowns.”
Similar to other incentive programs (i.e., Opportunity Zones and Tourism Development Act) this program will be the joint responsibility of the Georgia Department of Community Affairs and the Georgia Department of Economic Development. Both Commissioners will jointly review Revitalization Zone requests, and DCA will administer the program for approved areas. The bill’s fiscal impact is limited by the following:
· Rural Revitalization Zones must be approved at the discretion of Commissioners of DCA and Economic Development.
· The duration of the credits is 5 years.
· There is a sunset provision of 10 years for the legislation.
How many Opportunity Zones are there in Georgia?
There are currently 116 designated OZs located in 90 different communities in Georgia. There is a map with a list of Opportunity Zones on the DCA website: http://www.dca.ga.gov/economic/DevelopmentTools/programs/designationsMaps.asp
How many towns would qualify for these credits under the RURAL bill?
There are 473 towns in Georgia with a population of 15,000 or less, but in addition to meeting the population criteria, to be eligible for any of these tax credits, a town would also need to be in a Revitalization Zone and demonstrate evidence of economic distress.
MaryBrown Sandys, Director of Marketing & Communications
About the Georgia Department of Community Affairs:
The Georgia Department of Community Affairs (DCA) partners with communities to create a climate of success for Georgia’s families and businesses through community and economic development, local government assistance, and safe and affordable housing. Using state and federal resources, DCA helps communities spur private job creation, implement planning, develop downtowns, generate affordable housing solutions, and promote volunteerism. DCA also helps qualified low- and moderate-income Georgians buy homes, rent housing, and prevent foreclosure and homelessness. For more information, visit www.dca.ga.gov.