Published April 1, 2000 | April 2000 issue
About 280, according to an informal listing obtained from the state Department of Economic Development and Finance. This includes regional, (multi-)county and (multi-)city economic development entities, private nonprofits and a few private organizations (no chambers of commerce); only about 50 are estimated to have full- or part-time paid staff.
Two taxing vehicles provide funding for operations of local development organizations and business assistance packages. Cities are allowed to add up to 1 cent onto the state's sales tax, and cities and counties are also allowed to levy an additional mil onto property taxes to specifically fund economic development activities. Last year, the state also approved the Renaissance Zone Program, modeling it after the Michigan program of the same name. Fargo is currently the only city with a renaissance zone, although other cities are said to be working on necessary applications.
The Development Fund, a gap financing mechanism, invested $3.6 million in 19 projects in 1997, and financed 99 projects to the tune of $20 million from 1991 to 1997. Also popular is the Partnership in Assisting Community Expansion (PACE), an interest write-down program through the Bank of North Dakota, according to local economic development practitioners.
State financing vehicles include as many as nine different low-cost loan and other financing programs through the Bank of North Dakota (the only state-owned bank in the country). The state also offers a number of property, sales and income tax exemptions running up to five years for qualified new or expanding businesses. Tax increment financing (TIF) and the Regional Rural Development Revolving Loan Fund are also available to local communities.
TIF is not widely used in the state because only the land and original buildingno equipmentis used to calculate the base value and subsequent "increment" value of a TIF property. As a result, property valuations tend to go up very slowly, which fails to generate the revenue necessary to pay off bonds issued for the capital improvements.
fedgazette, July 2000