|
Click Here for
Online Incentives Applications
All of these programs are available and highly used by our businesses. Each can
operate either in cooperation with or independently of the incentives and
programs from the
Kansas Department of Commerce.
Following is a list of a few of these programs:
Financing Assistance Programs
Industrial Revenue Bonds (IRB)
(taxable and tax-exempt) - Municipal securities are one of the most popular and
cost-efficient methods of financing the purchase of land, construction of a new
facility, improvements on an existing facility and/or equipping a business. This
low interest financing mechanism utilizes the municipality as a vehicle to issue
the bonds, which can provide up to 100% of a business' funding needs with the
only equity requirement being the cost of the bond issuance. An IRB can also
include a property tax exemption on real or personal property. The City of
Chanute has issued over $213 Million in Bonds, with an associated property tax
exemption, since 1996 to expanding businesses.
Revolving Loan Fund Program
This low interest loan from the City of Chanute provides funds at below market
rates to businesses for working capital and increased employment opportunities.
The maximum loan is $35,000 per job created and dependent upon availability.
The City of Chanute has made just over $1 million in low interest loans since
1996..
Community Development Block Grant (CDBG)
This program provides low interest, subordinated loans to businesses. The
funding is $35,000 per job created to a maximum of $750,000 and requires
matching funds depending on the size of the request. CDBG funds can be used to
acquire land or buildings; construct or renovate facilities; purchase machinery
and equipment; improve infrastructure; and/or for working capital. Interest only
payments can be arranged for the first 18-months of this loan, which has an
interest rate of around four to five percent.
These funds are awarded on a competitive basis from the Kansas Department of
Commerce (KDOC). Several stipulations accompany a CDBG loan. The City and the
Southeast Kansas Regional Planning Commission assist businesses in applying for
this funding program. Several of our best business have utilized this low
interest loan program.
Interest Rate Write Down Program
This program provides funding assistance by reducing the amount of interest
payable on a loan with a local bank. The length of the assistance is 30-months
and can reduce the interest up to 5% annually. The maximum loan amount is
$25,000 for business financing and $10,000 for façade improvements and exterior
maintenance in the Central Business District. Since 1996, the City has
approved twenty-four (24) write-downs on loans totaling over $500,000.
Tax Increment Financing (TIF)
Tax Increment Financing (TIF) is a financing tool that allows municipalities to
encourage redevelopment of specified areas within the community. The guidelines
of TIF are described in the Kansas Statutes. With TIF, funds are available from
the proceeds of bonds to be issued by the City and primarily secured by the
incremental increase in property taxes within the redevelopment district as a
result of new construction or rehabilitation. In addition to new property taxes,
the municipality may use franchise fees and sales taxes generated with the
redevelopment district to pay the bonds or finance the project costs. Costs are
not paid from the General Fund or from mill levy receipts. A series on Public
Hearings, Resolutions and Ordinances are part of the TIF process.
Kansas Economic Opportunity Initiatives Fund (KEOIF)
This State program provides loans for projects that create or maintain jobs and
invest new capital in the state. KEOIF loans funds directly to businesses,
cities, or counties. Applications approved by the KDOC Secretary are generally
awarded performance based, 0%, forgivable loans for a 5-year period.
Kansas Existing Industry Expansion Program (KEIEP)
This program through the State of Kansas addresses the expansion needs of
existing Kansas businesses. Applications to the KEIEP program must be approved
by the KDOC Secretary and are awarded as predetermined and agreed upon new job
creation objectives are met. These loans are a maximum of $500 for each new job
created, offered at 0% interest over a 5-year period. The City will write a
letter of support and personally lobby for acceptance in this program.
Tax and Utility Assistance Programs
Property Tax Exemption Program
This program abates property tax on a business' new construction and purchased
new or used personal property. The abatement rate is 100% for a ten-year period
for a minimal amount of investment and job creation. The City has created an
easy, streamlined system to assist businesses with property tax exemption
procedures. The City of Chanute has granted 25 non-IRB tax exemptions since
1996 on property with an aggregate market value of nearly $14.5 Million.
Enterprise Zone Act Program
Chanute is located in a non-metropolitan region of the State of Kansas allowing
new or expanding business enhanced incentives through this program. Enterprise
Zone Act incentives include:
1. A sales tax exemption on machinery and equipment and facility improvements
purchased as a result of the project;
2. A job creation tax credit of $2,500 per job for all new jobs created; and
3. An investment tax credit of $1,000 per $100,000 of investment.
These tax credits may be used to offset 100% of the business’ annual Kansas
Income Tax liability.
High Performance Incentive Program (HPIP)
This State program offers further enhanced incentives to qualifying businesses.
The primary areas necessary for qualification to this program are that the
business must pay above average wages for their industry in the area and, either
invest 2% of their payroll on training or participate in one of the Kansas’
workforce training programs. HPIP incentives include:
1. A sales tax exemption on machinery and equipment and facility improvements
purchased as a result of the project;
2. A job creation tax credit of $2,500 per job for all new jobs created;
3. A workforce training tax credit;
4. An investment tax credit of 10% of investment; and other benefits.
These tax credits may be used to offset 100% of the business’ annual Kansas
Income Tax liability.
Energy Audit
The City of Chanute has contracted with Energy Management Group (EMG) to conduct
a discounted energy audit for the business. These audits identify ways for
companies to minimize wasted energy and lower their energy bills. It also
provides valuable operational/logistical information. The energy audit is a
detailed and itemized comparison of each appliance’s estimated usage, providing
the customer with an estimated annual, monthly, and hourly usage for each
appliance, department or area.
The report is helpful in many ways by:
1. Providing a better understanding of how a company uses its machinery and
equipment;
2. Assisting the company in pricing out its end product;
3. Suggesting useful energy efficiency and making energy conservation
recommendations;
4. Verifying the State Sales Tax Exemption percentages; and
5. Helping to estimate energy budgets and forecast cost of energy with expansion
or adding additional shifts.
|
