Kansas Direct Financial Incentives 2010
The state's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include Kansas Economic Opportunity Initiatives Fund, Bond Finance Program for Aviation Projects, and the Kansas Bioscience Authority.
The Department of Commerce can provide a zero percent interest, forgivable loan to qualified companies. This loan can offset costs associated with the establishment of a new facility or the expansion of an existing facility. Eligible costs include site improvements, construction, build-out, and purchases and relocation of machinery and equipment.
The loan is forgiven in 20 percent annual increments over a five-year period based on the job and payroll targets. Approval of funding for this program is based on the number of new jobs created, the level of wages paid to the new employees and the economic impact of the project.
Industrial revenue bonds:
Industrial revenue bonds (IRB's) are a popular method of financing up to 100 percent of a growing business' land, building, and equipment. IRB's are securities issued by cities and counties to provide funds for creditworthy companies to acquire land, construct and equip new facilities or remodel and expand existing facilities. IRB's allow fixed-rate financing for the life of the bond for the project.
Bond Finance Program for Aviation Projects:
The Kansas Legislature recently passed significant new bonding authority for eligible large aviation projects. An eligible aviation business is defined as a company engaged in the aviation manufacturing or service industry, paying at least $300 million in annual gross wages, paying at least a $50,000 average annual wage and that has invested at least $500 million in real and personal property in Kansas. An eligible aviation project is a research, development, engineering or manufacturing project for which the company proposes to invest at least $500 million in Kansas and employ up to 4,000 full-time employees. Kansas Development Finance Authority (KDFA) would then issue bonds for a principal amount of up to $33 million for a single aviation project with $150 million being the total cap for all aviation projects using this tool. The maximum term of the bonds is typically 20 years, but in special situations can be extended to 30 years. The normal income tax withheld from the employee's wages is used to pay back the principal and interest on the bonds. If the company receives project benefits from the bonding through this program, they are not eligible to participate in our Investments in Major Projects and Comprehensive Training (IMPACT) program for that project.
Community development block grant:
Eligible small city and county governments may apply for community development block grant (CDBG) economic development funds to make water, sewer, or other infrastructure improvements designed to assist companies in creating jobs. These funds may also be used by a business to acquire land or buildings, construct or renovate facilities, purchase machinery and equipment or for working capital. Under this program, companies can apply for up to $35,000 per job created with a maximum limit of $750,000.
CDBG funds can be used for infrastructure improvements that include streets, roads, water lines, sewer lines and rail spurs. Infrastructure funding requires that half the funding be paid back over a 10-year period at a rate of two percent. This is accomplished through a special assessment on the real property. Financing for working capital, equipment, and real property carries a fixed rate equal to four or three percent below prime, whichever is greater, set on the award date. The term of the loan depends on the type of assets being financed: working capital up to five years, equipment up to 10 years and real property up to 15 years.
At least 51 percent of the jobs created by the company in connection with this CDBG funding must be held by individuals who, at the time of hire, meet the low- to moderate-income guidelines for their county location. The low- to moderate-income status is based on family income and the number of family members.
The department provides low-interest state funds to cities and counties for infrastructure improvements that support Kansas basic enterprises such as manufacturing and distribution. Eligible projects may include construction, rehabilitation or expansion of public facilities, including roads, streets, highways, water supply and treatment facilities, water distribution lines, wastewater collection lines and related improvements.
Kansas Bioscience Authority:
Commerce works in partnership with the Kansas Bioscience Authority (KBA) to assist in the expansion and recruitment of bioscience companies. The KBA has direct financing programs and other resources that can be used to recruit world-class scholars, fund equipment and lab space for research and facilitate the commercialization of bioscience discoveries.
Kansas State Contact:
Barbara Hake, CEcD
Kansas Department of Commerce
9001 W. 110th Street, Ste. 150
Overland Park, KS 66210
Fax: (913) 345-8548
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.
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