The advantages of doing business in Butte carry over to the personal side, because Butte is one of the most affordable communities in the nation, giving companies an added enticement in recruiting executives, professionals and technology workers.
Examples of the available incentives in Butte include, but are not limited to:
State of Montana Workforce Training Grants
This program provides grant funds to primary sector businesses for training of new, full-time and part-time workers. Primary sector is defined as a business with at least 50 percent of its sales from outside of Montana, or a manufacturing company with 50 percent of its sales from companies that have 50 percent of their sales outside of Montana. The grant review committee may award workforce training grants up to $5,000 per eligible full-time trainee, or $2,500 per part-time trainee, to primary sector businesses that provide education or skills-based training. A company must pay the trainees’ wages and benefits of at least the lower of the average county wage or average state wage. To learn more about this grant opportunity please visit www.businessresources.mt.gov/WTG
State of Montana Big Sky Economic Development Trust Fund Grants
Montana’s Big Sky Economic Development Trust Fund provides grants and/or loans for businesses that create new primary sector jobs in Montana.
Job Creation Grants
- Primary Sector jobs are those created by firms whose out-of-state sales exceed 50% of its total gross sales or by firms that supply local customers with products and services that would otherwise be unavailable to them.
- These funds can be used to help fund worker training, infrastructure costs, construction, relocation costs and working capital.
- Each qualifying primary sector, full-time position (35+ hours) created that pays at least $13.43/hour is eligible for up to $5,000 award. A new eligible job that pays at or above the county average wage is potentially eligible for the maximum award.
- Businesses must create net new eligible jobs that pay an average weekly wage that meets or exceeds the lesser of 170% of the Montana’s current minimum wage or the current average weekly wage of the county in which the employees are to be principally employed including the value of employee benefits. Businesses are not required to pay benefits and may meet the compensation threshold with wages only.
- A new eligible job that pays at or above the state average wage in a county where the county average wage is above the state average wage is potentially eligible for the maximum award.
- The planning grant can be used to support the development of Business Plans, Feasibility Studies, Preliminary Architectural Reports, Preliminary Engineering Reports, Economic Impact Studies, Workforce Surveys, and Target Industry Analyses for economic development projects.
- BSTF Category II financial assistance cannot be used for Growth Policies, Comprehensive Economic Development Strategies (CEDS), or ongoing operating expenses to provide an economic development service.
- A match level of at least $1 for every $2 (50%) in BSTF assistance is strongly recommended. In-kind contributions may be considered by the Department to be advantageous as a demonstration of commitment and involvement to a project, however, cash matching funds (see definition of Match) of at least 50%-100% are recommended.
- Applications will be accepted throughout the year on a calendar quarter basis with deadlines of March 31st, June 30th, September 30th, and December 31st unless otherwise specified by the Department, until all available funds are committed to the approved projects.
To learn more about these grant opportunities please visit http://bstf.mt.gov/default.mcpx
State of Montana Incumbent Worker Training Fund (IWT)
The Incumbent Worker Training program is a competitive grant program that provides grant funding to help eligible Montana small businesses purchase training for their existing (incumbent) workers. It also helps preserve existing jobs for Montana residents. Training can be customized to meet specific needs.
- In operation in Montana at least one year
- No more than 20 employees per location, and no more than 50 statewide
- An existing client of one of the three following economic development partners: Business Expansion and Retention (BEAR), Montana Manufacturing Extension Center (MMEC), or Small Business Development Center (SBDC)
- Must be registered with the Montana Secretary of State’s Office as a(n): Association, Corporation, LLC, Partnership, or Sole Proprietor.
* Some exceptions apply.
WHICH EMPLOYEES QUALIFY?
Permanent employees must work at least 20 hours a week on average and have completed their probationary period to qualify for grant funding.
TYPES OF TRAINING THAT MAY QUALIFY
Training must be skill-based or result in a certificate or accreditation and improve productivity, efficiency, or wages in the worker’s existing job.
Training should be short-term and the business must have a demonstrated need for the training as a way to remain competitive in their industry or the economy.
COSTS THAT MAY QUALIFY FOR REIMBURSEMENT
Grant funding may reimburse all or part of the costs of training eligible employees.
Reimbursable expenses include:
- Tuition, registration, fees, and required materials. Asset purchases are not eligible.
- Transportation required to attend training such as mileage or airfare.
- Lodging required to attend training.
For information on how to apply for program, please contact the Butte Local Development Corporation.
State of Montana Business Infrastructure Program
The Montana Board of Investments (MBOI) may loan funds to a local government for public infrastructure improvements. The local government repays the loan from fees and assessments to the business using the infrastructure improvements.
- The business may write off up to 100% of the related fees and assessments paid to the local government on its Montana income tax as it documents the related job creation.
- The infrastructure improvements are essentially a grant to the business as a direct, dollar for dollar reduction of its Montana Income Tax Liability.
- The business to be assisted is analyzed by MBOI and the final decision is based on the strength of the business and the project being financed.
- The benefit to the assisted company is limited by the number and quality of jobs created and the ability of the business to write off the tax credits against its actual income tax liability.
- Infrastructure loans are limited to $16,666 per full-time job created within a four year period of the loan closing date.
- The minimum loan amount available under this program is $250,000 and the business must create at least 15 permanent full time jobs.
- These MBOI Infrastructure loans are made at below prime interest rates and a business may reduce its interest rate by creating jobs that pay at least $32,925 (Private Annual Wage) annually.
Each job that meets or exceeds this wage threshold will earn a .05% “buy-down” on their rate, up to a maximum of a 2.5% reduction.
Montana Board of Investments (MBOI) Loan Programs
The objective of the Board’s In-state Loan Program is to diversify, strengthen, and stabilize the Montana economy. To achieve this objective, the Board has designed a series of loan programs that can be tailored to meet the individual needs of borrowers.
Business Loan Participation Program Funded From The Permanent Coal Tax Trust
- Identifiable borrower(s) at the time of the reservation may reserve funds for 365 days with a fee of ¼% of the reserved amount; the interest rate can be locked at any time during the 365 days.
- Fixed-rate financing up to 25-years with interest rates posted weekly.
- Maximum Board participation amount of approximately $70 million (10% of Trust).
- Maximum Board participation is 80% if Board loan participation is less than 6% of Trust.
- Maximum Board participation is 70% if Board loan participation is more than 6% of Trust
- With the exception of Linked Deposit loans, borrowers who create jobs as a result of a Coal Tax Trust commercial loan are entitled to an interest rate reduction of .05% for each qualifying job created up to a maximum of 2.50% (50 qualifying jobs).
- A “Job” equates to a dollar value equal to the state’s Private Annual Wage, the state’s Private Annual Wage is posted on the Board’s web page. If the jobs created are less than the base, more jobs must be created or retained to meet the jobs eligibility threshold. If the jobs created are more than the base, fewer jobs may be created or retained to meet the jobs eligibility threshold. Jobs paying less than the State of Montana minimum wage will not qualify as an eligible job.
- The business will be subject to a full credit review using Board underwriting policy.
Value-Added Business Loan Program Funded From The Permanent Coal Tax Trust
- Fees to reserve funds or lock interest rates are not required. Reservation considered effective upon receipt of application.
- Borrower must operate a value-added business.
- The board may develop a check list to assist in the determination of value-added eligibility.
- Maximum 15-year loan term.
- Borrower’s creating or retaining 10 to 14 full-time jobs are entitled to a 4.0% initial interest rate on participated loan amount.
- Borrower’s creating or retaining 15 full-time jobs are entitled to a 2.0% initial interest rate on participated loan amount.
- A “Job” equates to a dollar value equal to the state’s Private Annual Wage, the state’s Private Annual Wage is posted on the Board’s web page. If the jobs created are less than the base, more jobs must be created or retained to meet the jobs eligibility threshold. If the jobs created are more than the base, fewer jobs may be created or retained to meet the jobs eligibility threshold. Jobs paying less than the State of Montana minimum wage will not be considered an eligible job towards the threshold.
- Interest rate will be at the posted interest rate until the required jobs are created/retained.
- Interest rate set at lowest rate for 1st 5 years, 6% for 2nd 5 years the Board posted rate at the time of application for the remaining term.
- Board participates with lender in 75% of the funding, risk, collateral, and other security.
- Minimum loan size $250,000-maximum loan size approximately $7.5 million (1% of Trust).
- Total amount available for this program is $70.0 million.
- The business will be subject to a full credit review using Board underwriting policy.
For more information on the Montana Board of Investments incentive programs, please visit www.investmentmt.com/LoanPrograms
Tax Increment Districts
Butte has three Tax Increment Districts (TIF) to help new and expanding businesses within the districts offset the cost of needed infrastructure.
Industrial Tax Increment Finance District
Montana Connections Business Development Park
The Butte-Silver Bow Local Government through its Tax increment Financing Industrial District (TIFID) program allows the local government to utilize property taxes brought about by new development in the area to construct infrastructure and assist with facility construction to support additional industrial uses in the area. The Montana Connections Business Development Park (which is located within a TIFID district) is approximately seven miles west of Butte in the Port of Montana Business Development Park. Industries that located within this Park can take advantage of the TIFID program to help offset the cost of infrastructure needed by these companies. The TIFID administration will work with the project developers to determine its specific infrastructure needs and how the program can be used to assist in offsetting these costs. All development programs under the TIFID are based upon availability of funds.
Qualifying infrastructure that new companies can take advantage of through the TIFID, includes streets, roads, curbs, gutters, sidewalks, parking, sewers, sewer lines, storm sewers, waterlines, natural gas lines, electrical lines, telecommunication lines, rail lines and spurs, and construction of facilities
The TIFID program also includes an interest rate write-down option, the TIFID would participate in any conventional financing needed for the project by guaranteeing the lending institution an annual payment. For example, assuming the current commercial financing rate is 7% but the project needs the rate to be 5% for the project to be successful – the TIFID would then guarantee the bank a 2% interest payment to reduce the rate the project pays from 7% to 5%. By law, the TIFID will not be able to continue the interest rate write-down assistance program past the expiration date of the TIFID in 2022, therefore all financial assistance granted to the project would need to be utilized before 2022.
In addition, the TIFID can provide low interest loans independently from the above programs. Loans can be used to assist with construction of the facility. Loans are intended to supplement the project’s other financing sources including commercial and public assistance (i.e., loans and grants), and public and private investments. The maximum loan amount is $400,000, and depending on the risk of the project and use of funds, will carry an interest rate from 3 to 5% and term from 10 to 25 years.
For more information on the TIFID program and the Montana Connections Business Development Park please visit www.montanaconnectionspark.com
Central Business Urban Renewal District
The Urban Revitalization Agency (URA) is a Tax Increment District designed to promote the redevelopment and stimulation of investment within the Central Business District. The Agency is funded by tax increment financing and makes loans and grants for private buildings in the Uptown area as well as invests in other public and private improvements. For more information on the URA program visit the website http://www.co.silverbow.mt.us/134/Urban-Revitalization-Agency
East Butte Renovation and Rehabilitation Agency
The East Butte Renovation and Rehabilitation Area is a Tax Increment District designed to promote the redevelopment and stimulation of investment in the East Butte area. The program is funded by tax increment financing and makes loans and grants for private investment in the East Butte improvement area. For more information on this program please visit www.co.silverbow.mt.us
Community Development Block Grant ED Program
The Montana’s Community Development Block Grant Economic Development (CDBG-ED) Program is designed to stimulate economic development activity by assisting Montana’s private sector to create or retain jobs for low and moderate income (LMI) persons. The program assists businesses by making fixed-rate financing available to them at reasonable interest rates and by providing public improvements in support of economic development activities. CDBG-ED provides flexibility in interest rates and loan terms to complement conventional business financing and other State and Federal business financing programs. CDBG-ED funding can provide payment deferments, lower payments in the first year, and interest-only payments. CDBG-ED funds are intended to be used in situations where a funding gap exists and alternative sources of public and private financing are not adequate.
For more details on this program please visit Montana Department of Commerce Business Resource.
Montana Board of Research and Commercialization Technology
This program was created by the Montana Legislature to provide a predictable and stable source of funding for research and commercialization projects to be conducted at research and commercialization centers in Montana. Provides grants in the $50,000 – $200,000 range for research projects that show a clear path to commercialization. For more details on this program please visit www.businessresources.mt.gov/mbrct
Montana Technology Innovation Partnership
The Montana Technology Innovation Partnership program as the Montana administrator of the National Institutes of Health Commercialization Assistance Program, a specialized technical assistance grant program for SBIR/STTR Phase II awardees. This program is designed to help promising, small, life science companies develop their commercial businesses and transition their technologies into the marketplace. For more details on this program please visit www.businessresources.mt.gov/MTIP
New Markets Tax Credits
The New Markets Tax Credit program is a federally funded program providing subsidy financing to a wide variety of projects in low-income communities. The NMTC program gives taxpayers an aggregate 39 percent federal income tax credit over seven years against equity investments made in designated community development entities. In Montana, New Markets Tax Credits are administered by Montana Community Development Corporation in Missoula. In 2011, it received an allocation of more than $56 million. Any Butte project over $5 million should be evaluated for possible utilization of NMTC funding. For more details on this program please visit www.mtcdc.org/loans/new-markets-tax-credits/
Wood Products Revolving Loan Fund
The Montana Distressed Wood Products Industry Recovery and Stabilization Program was created in 2009 with federal and state funding to help businesses in this industry affected by the recession to retain or create jobs. Payments into the fund are available as affordable loan financing for economic development projects in Montana. For more details on this program please visit www.businessresources.mt.gov/WPRLF
Rural Development Business and Industry Loans
U.S. Department of Agriculture administers this loan program, which exist to improve, develop or finance business, industry and employment to improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans that will provide lasting community benefits. www.rd.usda.gov/programs-services/business-industry-loan-guarantees
Rural Energy for America Program Guaranteed Loan and Grant
Another USDA program, aims to encourage the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers work with local lenders, who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount. www.rd.usda.gov/programs-services/rural-energy-america-program-renewable-energy-systems-energy-efficiency
A stable and highly favorable tax climate enhances profitability for a wide variety of businesses looking to grow and prosper in a Montana location. In fact, the Sales Tax Institute ranks Montana #1 for Lowest Sales Tax Rank – No Sales Tax, and the Tax Foundation Ranke Montana ranks 6th in the Tax Foundation’s State Business Tax Climate Index for 2015.
Montana Offers Tax Incentives On…
- Alternative Energy Production
- Biodiesel/Bio-lubricant Production Facilities
- Biodiesel Blending and Storage
- Capital Gains and Dividends from Small Business Investment Company
- Contractors’ Gross Receipts
- Empowerment Zone
- Corporate Energy Conservation Investments
- Film Employment Production and Film Qualified Expenditures
- Geothermal Systems
- Historic Building Preservation
- Research and Development Activities
- Infrastructure User Fees
- Mineral and Coal Exploration
- New and/or Expanded Manufacturing Industry
- Oil Seed Crushing Facility
- Research and Development Firms Tax Exemption
For more information regarding any of these programs click to view the PDF file.
The Butte Local Development Corporation helps businesses navigate through the relocation or expansion process by serving as a liaison to government to expedite project activity. In addition, the BLDC provides site selection assistance and can work as an intermediary for introductions to local real estate experts.
The BLDC also provides key market intelligence including demographics, labor availability, taxes, cost of living comparisons and research on request; workforce, recruitment and training assistance can also be provided.
For assistance from the BLDC, please call (406) 723-4349. We look forward to working with you!
INCENTIVE QUICK LINKS