Title of Regulation: 24VAC30-271. Economic Development Access Fund Policy (amending 24VAC30-271-20).

Statutory Authority: § 33.1-12 of the Code of Virginia.

Effective Date: September 17, 2012.

Agency Contact: Jennfer DeBruhl, Local Assistance Director, Department of Transportation, 1401 E. Broad St., Richmond, VA 23219, telephone (804) 786-0334, FAX (804) 786-2603, or email jennifer.debruhl@vdot.virginia.gov.

Summary:

Amendments to this regulation (i) allow for funding costs associated directly with program administration, outreach, and management to be allowed prior to Commonwealth Transportation Board approval provided that they are not expected to exceed 1.0% of the allocation annually; (ii) eliminate the current prohibition against government facilities being eligible for funding as qualifying establishments to increase the number of potential candidates for program funds; (iii) eliminate an obsolete reference to repealed regulation 24VAC30-450; (iv) allow credit for locally-funded public infrastructure improvements and buildings, including revised language to indicate that some locality-provided improvements can be used to meet investment requirements; and (v) increase maximum allocations for road construction- the proposed change involves allowing an allocation of up to $1 million per year for a megasite (MEI project), with a local match of a half million, with one additional allocation of $1 million with a local match of a half million allowed in a subsequent year.

24VAC30-271-20. General provisions.

A. The use of economic development access funds shall be limited to:

1. Providing adequate access to economic development sites on which new or substantially expanding manufacturing, processing and, research, and development facilities; distribution centers; regional service centers; corporate headquarters or other establishments that also meet basic employer criteria as determined by the Virginia Economic Development Partnership (VEDP) in consultation with the Virginia Department of Business Assistance (DBA); and

2. Improving existing roads that may not be adequate to serve the establishments as described in subdivision 1 of this subsection; and

3. Providing for costs associated directly with program administration and management of project requests prior to board approval with such costs not expected to exceed 1.0% of the allocation annually.

B. Economic development access funds shall not be used for the acquisition of rights of way or adjustment of utilities. These funds are to be used only for the actual construction and engineering of a road facility adequate to serve the traffic generated by the new or expanding eligible establishments.

C. Economic development access funds may not be used for the construction of access roads to schools, hospitals, libraries, airports, armories, speculative office buildings, shopping centers, apartment buildings, professional offices, residential developments, churches, hotels, motels, government installations, or similar facilities, whether public or private. (Access roads to licensed, public-use airports, while provided for in § 33.1-221 of the Code of Virginia, are funded and administered separately through 24VAC30-450, Airport Access Funding.)

D. No cost incurred prior to the board's approval of an allocation from the economic development access funds may be reimbursed by such funds. Economic development access funds shall be authorized only after certification that the economic development establishment as listed or meeting the criteria as described will be built under firm contract, or is already constructed, or upon presentation of acceptable surety in accordance with § 33.1-221 A of the Code of Virginia.

E. When an eligible establishment is not yet constructed or under firm contract and a local governing body guarantees by bond or other acceptable surety that such will occur, the maximum time limit for such bond shall be five years, beginning on the date of the allocation of the economic development access funds by the Commonwealth Transportation Board. At the end of the five-year period, the amount of economic development access funds expended on the project and not justified by eligible capital outlay of one or more establishments acceptable to the board shall be reimbursed to the Virginia Department of Transportation (VDOT) voluntarily by the locality or by forfeiture of the surety. In the event that, after VDOT has been reimbursed, but still within 24 months immediately following the end of the five-year period, the access funds expended come to be justified by eligible capital outlay of one or more eligible establishments, then the locality may request a refund of one-half of the sum reimbursed to VDOT, which request may be granted if funds are available, on a first-come, first-served basis in competition with applications for access funds from other localities.

F. Economic development access funds shall not be used to construct or improve roads on a privately owned economic development site. Nor shall the construction of a new access road to serve any economic development site on a parcel of land that abuts a road constituting a part of the systems of state highways or the road system of the locality in which it is located be eligible for economic development access funds, unless the existing road is a limited access highway and no other access exists. Further, where the existing road is part of the road system of the locality in which it is located, or the secondary system of state highways, economic development access funds may be used to upgrade the existing road only to the extent required to meet the needs of traffic generated by the new or expanding eligible establishment.

In the event an economic development site has access according to the foregoing provisions of this chapter, but it can be determined that such access is not adequate in that it does not provide for safe and efficient movement of the traffic generated by the eligible establishment on the site or that the site's traffic conflicts with the surrounding road network to the extent that it poses a safety hazard to the general public, consideration will be given to funding additional improvements. Such projects shall be evaluated on a case-by-case basis upon request, by resolution, from the local governing body. Localities are encouraged to establish planning policies that will discourage incompatible mixes such as industrial and residential traffic.

G. Not more than $500,000 of unmatched economic development access funds may be allocated in any fiscal year for use in any county, city or town that receives highway maintenance payments under § 33.1-41.1 of the Code of Virginia. A town whose streets are maintained under either § 33.1-79 or § 33.1-82 of the Code of Virginia shall be considered as part of the county in which it is located. The maximum eligibility of unmatched funds shall be limited to 20% of the capital outlay of the designated eligible establishments and certain investment by the locality in the land or the building, or both, on the site occupied by the designated eligible establishment. The unmatched eligibility may be supplemented with additional economic development access funds, in which case the supplemental access funds shall be not more than $150,000, to be matched dollar-for-dollar from funds other than those administered by the board. The supplemental economic development access funds over and above the unmatched eligibility shall be limited to 20% of the capital outlay of the designated eligible establishments as previously described. Such supplemental funds shall be considered only if the total estimated cost of eligible items for the economic development access improvement exceeds $500,000.

If an eligible site is owned by a regional industrial facility authority, as defined in § 15.2-6400 of the Code of Virginia, funds may be allocated for construction of an access road project to that site without penalty to the jurisdiction in which the site is located. This provision may be applied to one regional project per fiscal year in any jurisdiction with the same funding limitations as prescribed for other individual projects.

H. Notwithstanding the provisions of this section, for Major Employment and Investment (MEI) projects as defined in § 2.2-2260 of the Code of Virginia and administered by the VEDP, the locality may receive up to the maximum unmatched allocation and matched allocation for a design-only project. The local governing body shall guarantee by bond or other acceptable surety that plans for a MEI project will be developed to standards acceptable to VDOT.

In addition, for projects utilizing economic development access funds to serve approved MEI projects, the locality may receive up to the maximum unmatched allocation and an additional $500,000 matched allocation for a road construction project. Project allocations for a given MEI project may be cumulative for not more than two years.

H. I. Eligible items of construction and engineering shall be limited to those that are essential to providing an adequate facility to serve the anticipated traffic while meeting all appropriate Commonwealth Transportation Board and state policies and standards. However, additional pavement width or other features may be eligible where necessary to qualify the road facility in a city or town for maintenance payments under § 33.1-41.1 of the Code of Virginia.

I. It. J. Except as provided for in subsection H of this section pertaining to MEI projects, it is the intent of the board that economic development access funds not be anticipated from year to year. Unused eligibility cannot be allowed to accumulate and be carried forward from one fiscal year to another.

J. K. The Commonwealth Transportation Board will consult and work closely with the Virginia Economic Development Partnership (VEDP) VEDP and the Department of Business Assistance (DBA) DBA in determining the use of economic development access funds and will rely on the recommendations of the VEDP and the DBA in making decisions as to the allocation of these funds. In making its recommendations to the board, the VEDP and the DBA will take into consideration the impact of the proposed facility on the employment and tax base of both the area in which the facility is to be located and the Commonwealth of Virginia.

K. L. Prior to the formal request for the use of economic development access funds to provide access to new or expanding eligible establishments, the location of the access road shall be submitted for approval by VDOT. VDOT shall take into consideration the cost of the facility as it relates to the location and as it relates to the possibility of the future extension of the road to serve other possible eligible establishments, as well as the future development of the area traversed.

L. M. Prior to the board's allocation of funds for such construction or road improvements to an eligible economic development establishment proposing to locate or expand in a county, city or town, the governing body shall by resolution request the access funds and shall be responsible for the preliminary negotiations with the eligible establishment and others who may be interested. Engineers of VDOT will be available for consultation with the governing bodies and others, and may prepare surveys, plans, engineering studies, and cost estimates.

M. N. The Commissioner of Highways is directed to establish administrative procedures to assure adherence to and compliance with the provisions of this chapter and legislative directives are adhered to and complied with.