Sen. Yager is co-sponsoring Senate Bill 2538, the “Rural Economic Opportunity Act of 2016,” with Senate Majority Leader Mark Norris (R-Collierville) to spur economic development in some of the state’s most economically distressed counties.
Twenty-one of Tennessee’s 95 counties are considered economically distressed, including six counties in Senate District 12, which Sen. Yager serves. SB 2538 has two components that aim to jumpstart the economy in these counties.
Part one is implementation of the “Propelling Rural Economic Progress” (PREP) program, which would create a grant fund to aid rural counties in building sites and infrastructure to incentivize businesses to develop in their region.
Part two is the restructuring of Tennessee’s county tier system used to determine whether a company looking to locate or expand operations is eligible for job tax credits. Tax credits help fuel company expansion by rewarding job creation based on the number of positions created, amount invested, type of business, and location.
The legislation adds a fourth tier to the state’s current three-tier tax incentive arrangement to help drive development in less wealthy counties. In order for a business to receive job tax credits, under all three of the current tiers, they must provide a minimum of 25 jobs. This legislation would lower the job creation threshold to 20 in tier three counties and 10 in the additional fourth tier, used for the economically distressed counties.
The system currently used statewide isn’t flexible enough to provide the kind of opportunities that the 21 economically distressed counties can hope to reach for. By creating the fourth tier, more opportunities will be created for those counties to create more jobs or expansions for which they could actually qualify.