Incentives

Financing of industrial projects in West Tennessee communities is an important factor in attracting new firms to the area and encouraging existing firms to expand. Local communities and the West Tennessee Industrial Association can suggest a plan suitable for most projects.

Financing can be obtained from area financial institutions or application for funding can be made to one of several federal loan agencies. In addition, the Tennessee Legislature has authorized three specific plans for financing. Many West Tennessee industries have been financed in whole or part by these methods.

Authorizes local revenue bonds for industrial plants, land, and certain types of plant equipment.

This plan authorizes Tennessee cities and counties to issue Revenue Bonds to finance the construction or purchase of industrial buildings for lease to private industrial concerns. Such buildings are leased on terms which provide for the retirement of the principal and payment of the interest. The bond issue must receive the approval of a three-fourths majority of those voting in the public referendum on the issue and the interest on the bonds cannot exceed ten percent.

These bonds are exempt from state, county and municipal taxation except inheritance, transfer and estate taxes. The Tennessee Supreme Court has held that industrial buildings may include fixtures, machinery, etc. that are permanently attached to the building.

This plan is authorized by the Industrial Revenue Bond Act of 1951.

Authorizes the formation of public industrial development corporations for industrial financing.

This plan authorizes the cities and counties to establish a public industrial development corporation to acquire and dispose of properties and buildings to private industrial concerns. The corporation may issue bonds payable from the revenues received from the leasing or sale of industrial property. These bonds do not require a public referendum, and interest cannot exceed ten percent.

These industrial development corporations also may pledge the full faith and credit of the city or county provided they receive a Certificate of Public Purpose and Necessity issued by the State Building Finance Committee as described in Plan 3, and the approval of a three-fourths majority of those voting in a public referendum. In order to issue these bonds, the city or county must receive a Certificate of Public Purpose and Necessity from the State Building Finance Committee. The committee serves as a screening board and must determine that sufficient resources and labor are available and that the total amount of the indebtedness will not exceed ten percent of the assessed valuation of the city or county.

The committee must also determine that the project is well conceived, has a reasonable chance of success, will provide proper economic development and employment, and will not become a burden upon local taxpayers.

This plan is authorized by the Industrial Building Bond Act of 1955.

Authorizes full faith and credit bonds to purchase land and/or construct industrial buildings.

This plan authorizes cities and counties to issue full faith and credit bonds for the purpose of financing the purchase or construction of industrial buildings for lease to private industrial concerns.

The rental income from industrial buildings must be pledged to the full retirement of the bonds. The bonds may not be issued for a term of more than forty years or have an interest rate in excess of ten percent, and must be approved by a three-fourths majority of those voting in a public referendum. In order to issue these bonds, the city or county must receive a Certificate of Public Purpose and Necessity from the State Building Finance Committee. The committee serves as a screening board and must determine that sufficient resources and labor are available and that the total amount of the indebtedness will not exceed ten percent of the assessed valuation of the city or county. The committee must also determine that the project is well conceived, has a reasonable chance of success, will provide proper economic development and employment, and will not become a burden upon local taxpayers.

This plan is authorized by the Industrial Building Bond Act of 1955.

Industrial Grants/Loans
The Small Cities Community Development Block Grant dollars are used to help industries locate or expand in Tennessee and provide Tennesseans with employment

• The principal beneficiaries of these jobs must be low and moderate-income people
• Grants are made for public infrastructure, and loans are made for industrial buildings and equipment
• The maximum loan for which companies expanding or relocating to Jackson can apply is $500,000
• Company must agree to hire 51% of employees from outside of city limits

Payment-In-Lieu-of-Tax-Schedule (PILOT) Program

• Tennessee's aggressive Payment in Lieu of Tax (PILOT) schedule enables companies to substantially reduce their tax burden during the critical early phases of operation. Companies are eligible to take advantage of the PILOT by financing the project with Industrial Revenue Bonds or entering into a lease back agreement.
• A PILOT is offered as an incentive to both new and expanding companies. It applies to commercial and industrial real property, such as the land and building, as well as personal property, such as equipment.

Tennessee Industrial Infrastructure Program (TIIP)
Tennessee helps local governments provide infrastructure to support locating or expanding industries through the Tennessee Industrial Infrastructure (TIIP) program. Businesses eligible for assistance must be manufacturing and other types of economic activities that export more than half of their product or services outside of Tennessee.

Tax Exempt Industrial Bonds
Businesses and industry can apply for part of the state's allocation of tax-exempt industrial revenue bonds through the industrial development board.

Taxable Bonds
Projects can be financed with taxable bonds at attractive interest rates. Bond counsels can advise when this option is feasible

SBA 504 Loans

• This program enables small businesses to borrow funds for an expansion project that otherwise would be unattractive.
• The program provides long-term, fixed asset financing of 40 percent of a project, not to exceed $750,000
• The business' net worth cannot be more than $6 million and average net profits cannot exceed $2 million
• The loan can be used for land, buildings, machinery and equipment.

Training Cost Reimbursement

Tennessee Industrial Training Services - In Tennessee, industrial training is a customer-designed package developed to meet the needs of each new and expanding industry. The Industrial Training Service utilizes dozens of community colleges, technical institutes and technology centers to provide instructional services throughout the state.

By putting its economic development money in industrial training, the state is investing in Tennesseans while it offers industry major savings in start-up costs. The efficient process can begin even before a company opens its facility. The training program allows industry to develop and maintain a skilled labor force, to start production in the shortest possible time and have an ongoing resource.

Unlike the federal Job Training Partnership Program, the state's program does not have eligibility requirements for applicant industries. It asks only that a company hire Tennesseans.

Tennessee Job Skills Program - Tennessee Job Skills Program is a workforce incentive giving priority to the creation and retention of jobs while focusing on employers in industries that promote high-skill, high-wage jobs in high-technology, demand, emerging and skilled manufacturing operations. Grants can be awarded to employers who certify that a job or job opening exists or will exist at the end of a project for which the job skills assistance grant is sought. The participants in the project must fill such job openings. The starting wage for a new job created through the project will be equal to or greater than the prevailing starting wage for that occupation in the local labor market.

Job Training Partnership Act (JTPA) - Through the federally funded Job Training Partnership Program, local residents who are dislocated from previous employment and are unemployed or low income can get the training they need to fill jobs needed by local industry. A private industry council works with local elected officials to determine the job training needs of West Tennessee businesses and industries and to assure that the training relates to available jobs