DALLAS, March 28, 2016 /PRNewswire/ -- On March 17, 2016, the Tennessee House unanimously approved Governor Bill Haslam's Rural Economic Opportunity Act of 2016 ("the Bill") intended to boost economic development in rural communities throughout Tennessee. If approved by the Senate, the Bill establishes a Propelling Rural Economic Progress Fund ("PREP Fund"), which will provide grants for activities that encourage economic development in rural areas, such as site and infrastructure development. The Governor's budget proposed $10 million for the PREP Fund during the fiscal year beginning July 1, 2016.
The Bill also restructures the current three-tier county designation system, which provides for job-creation tax credits for new or expanding businesses in designated counties. Currently to qualify for a $4,500 per-job franchise tax and excise tax credit, a qualifying business in a county designated as a Tier 1, 2, or 3 must make a minimum capital investment of $500,000 and create at least 25 qualified jobs during the investment period. The Bill provides that the job-creation requirement in Tier 3 counties will drop to 20 new jobs. In addition, the Bill adds a fourth tier to the county designation system. A qualifying business in a Tier 4 county will be required to create only ten new jobs to qualify for the tax credits.
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