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Business aid bill hung up on 'rural Utah'

Published: Thursday, Sept. 21 2006 12:00 a.m. MDT

State officials and representatives of rural areas are fine-tuning language in a draft bill that would change how much economic development financial incentives go to spur business growth in rural areas of Utah.

At issue is defining what is considered "rural Utah," according to Jeff Packer, co-chairman of the Governor's Rural Partnership Board, which is working with state officials to tweak the draft bill.

"We want to make sure that in the process of this kind of legislation that we don't exclude some areas that truly may be disenfranchised by this process if we too narrowly define this definition," Packer told the Workforce Services and Community and Economic Development Interim Committee on Wednesday. "I happen to live in Brigham City, and Brigham City has about 17,000 people, and so there's some people in rural Utah. If you live in Piute County, they don't see Brigham City as a rural community. Of course, there's others that do.

"And I'm just going to use that as a simple illustration to help you to understand why it's very appropriate for us to come back next month and help finish the refining of this bill so that what we go forward with is something that we all support."

The current draft changes the definition of an "economically disadvantaged rural area" to any area in a fourth-, fifth- or sixth-class county, or in a city or town of less than 10,000 population in a third-class county. It also calls for "no less than 30 percent" of the Industrial Assistance Fund — used to recruit or grow businesses — to be used in those areas. Existing law says those areas can receive "up to 50 percent" of the IAF.

The draft retains a provision in which up to 20 percent of the IAF may be used to take advantage of unique circumstances boosting economic interests through growing or retaining commerce and industry.

Michael Nelson, who is in charge of recruitment and incentives for the state, said that during the past fiscal year, about 45 percent of the number of IAF incentives were for businesses in rural Utah.

Jason Perry, executive director of the Governor's Office of Economic Development, said the "up to 50 percent" language means "it could be zero, or it could be up to 50 percent, which is what we did have this past year. ... We're comfortable with that."

However, he said, setting a 30 percent minimum for the rural areas could be a problem if the state is unable to recruit businesses there. "Because of that issue, we're trying to look at opportunities for us to create a mixture of the recruitment side but also the important Grow Utah business side. ... Some of our more remote locations, it's much more likely that we're going to grow a very successful business than it is to recruit a major business," Perry said.

He noted that needs in rural Utah often differ greatly from those in urban areas. He said a "wonderful" manufacturing company in Milford, Beaver County, simply needed $2,000 for a loading dock. "That was it: 'Our business is only suffering because of the want of this small amount of money.' Those are perfect opportunities for us to really provide some assistance in those areas," he said.

"This (draft) really is a way for us to spread the opportunity everywhere, which is really what we've been missing for a very long time."

A couple of legislators praised the efforts to help rural Utah.

"I think this is great," Rep. Steve Mascaro, R-West Jordan, said of the draft bill.

"If it (IAF funding) ends up being just in the urban areas, I think that that's a travesty," said committee co-chairman Rep. David Cox, R-Lehi. "We need to keep it out there. There's plenty of incentives along the Wasatch Front, and in my view as much as we can push it away from the Wasatch Front, where we're experiencing horrific growth, that's better for the state of Utah."


E-mail: bwallace@desnews.com

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