Kansas Direct Financial Incentives 2011
Kansas' economic development, finance, and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include PEAK, Wind and Solar Bond Financing, and the Kansas Economic Opportunity Initiatives Fund.
Promoting Employment Across Kansas (PEAK) - This program offers qualified companies the ability to retain 95 percent of their payroll withholding tax for five-seven years. PEAK is available to new operations in Kansas as well as relocated operations to the state. Companies need to create at least 10 new jobs within two years in metropolitan areas or five new jobs within two years in all other counties of the state. High-impact projects that create 100 new jobs within two years can retain 95 percent of payroll withholding tax for up to seven to 10 years. The number of years that the withholding tax can be retained depends on how much the annual median wage of the jobs at the Kansas work site will exceed the current county median wage and the discretion of the Secretary of the Kansas Department of Commerce.
Wind and Solar Bond Financing - This allows for up to $5 million in bond financing per project for eligible wind and solar energy manufacturers. The bonds are paid off from the payroll withholding tax of the new jobs. To qualify, a project must create at least 200 new jobs within five years, pay at least a $32,500 average salary and generate a minimum capital investment of $30 million.
Kansas Economic Opportunity Initiatives Fund - 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 meeting 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 are a popular method of financing up to 100 percent of a growing business' land, building and equipment. IRBs 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. IRBs allow fixed-rate financing for the life of the bond for the project.
Community Development Block Grant - Eligible small city and county governments may apply for Community Development Block Grant economic development funds to make water, sewer, rail spur, roadway 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. At least 51 percent of the jobs created with CDBG funding must be held by individuals who, at the time of hire, meet the low- to moderate-income guidelines for the county location.
Infrastructure funding requires that half of the funding be paid back over a 10 year period at a rate of two percent. Financing for working capital, equipment and real property carries a fixed rate equal to 4 percent or 3 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.
Partnership Fund - 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 new bioscience companies and world-class scholars, fund equipment and lab space for research, and facilitate the commercialization of bioscience discoveries.
Work Force Development Programs
The Department of Commerce has three work force training programs to offset a company's training costs. Companies creating new jobs may qualify for Investments in Major Projects and Comprehensive Training (IMPACT) or Kansas Industrial Training (KIT) assistance. Eligibility for either program depends on the number of jobs created and the corresponding wages. We also have the Kansas Industrial Retraining (KIR) program to retrain a Kansas company's existing workforce on new technology or production activities. Projects involving a Kansas Basic Industry - which includes manufacturing, distribution, or regional/national service facilities - may qualify for these programs.
All of these programs offer direct financial assistance to pay a negotiated portion of the costs to train a company's employees. Companies may apply the assistance toward items such as instructors' salaries; meals, travel and lodging (including out-of-state or international travel); video development; textbooks and training manuals; supplies and materials; temporary training facilities; curriculum planning and development and in certain situations reimbursement of trainee's wages for up to six months.
Kansas State Contact:
Barbara Hake, CEcD
Kansas Department of Commerce
1000 S.W. Jackson Street
Topeka, KS 66612
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.