Panel advances tax incentive bill

Utah could see businesses expand or move into the state under an economic development incentive bill passed out of committee Thursday.

The Workforce Services and Community and Economic Development Interim Committee backed a bill that would provide broader tax incentives for job-creating companies through expansion of an existing rebate program beyond aerospace and aviation development zones near airports.

Local entities would establish the economic development zones. Companies would apply through the Department of Community and Economic Development.

"I think it's important for Utah to be in the game, and right now, with some of these business incentives in some other Western states, we're on the sidelines," said Sen. David Thomas, R-South Weber. "We're on the sidelines watching everybody else play."

But a few legislators in October raised concerns that the incentives would be more attractive to companies outside Utah, effectively hurting Utah businesses if they moved into the state.

Rep. Greg Hughes, R-Draper, repeated those concerns Wednesday and was the only lawmaker voting against the bill.

"I appreciate what we're trying to accomplish, but when you get into a contest with other states in trying to create enterprise zones, we ignore the good businesses we already have here in our hopes to attract outside businesses into the state, and we get in a merry-go-round environment," Hughes said.

He said he favored making all of Utah more attractive to business, calling enterprise zones "artificial and not what I'd like to see."

Rep. Brad Dee, R-Washington Terrace, who sponsored the original aerospace/aviation zone bill, said Utah businesses could get the incentives if they created a significant number of high-paying jobs, made large purchases from Utah vendors and suppliers or created a new enterprise in the state.

"It is designed for those businesses that remain in the state of Utah" in addition to companies considering coming to Utah, Dee said.

Rep. Steve Mascaro, R-West Jordan, said the new incentive would be just one economic development tool to help the state's economy. He also praised Dee's earlier legislation.

"I did believe as this legislation presented to us before did help our businesses within the state, and I saw that as a positive thing," Mascaro said.

The new incentive would not apply to companies that merely shifted jobs from one part of Utah to another. They also would have to add jobs above their baseline count of existing jobs. And, to get the new incentive, they would not be eligible for more money from the state Industrial Assistance Fund.

The bill was endorsed Tuesday at a joint meeting of the Utah Technology Commission and Utah Technology Industry Council.

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