Ask Margo: Frequently Asked Questions About Economic Incentives (III)

The posts of the past three weeks have included a list of questions/concerns I’ve received from a number of businesses enquiring about their incentive projects. I promised to provide some additional questions/concerns that you may be interested in. The following list encompasses questions I’ve received over the years, as well as others that may not have been asked yet, but will come up. If your burning question is not included, email them to me at info@marlynnconsulting.com and I will add your question to the list. If you haven't had the opportunity to review the previous blogs, I encourage you to check them out now.

Why is managing my incentive project so important?

In my experience, many businesses do not worry about their incentive projects until it’s time to submit their reports to the State for approval of their payments. The problem with this method is it does not give you an opportunity to make adjustments if you do not meet one or more of your project requirements at the end of the year. Usually, if you fail to meet one or more of your incentive commitments, you will not only lose the scheduled payment for that year. You will also forfeit any remaining payments under your incentive agreement.

Can I manage my incentive project on my own?

Sure you can! With some assistance, most businesses are capable of monitoring and reporting their incentive project commitments on their own. I would suggest, however, that the team working on your project participate in a training program to ensure that they know the specific requirements for your project. The State requires specific documentation to confirm that your business qualifies to receive a payment. To ensure timely review and approval of your payment, your team should be familiar with the types of documentation and the methods used by the State to analyze your requirements to confirm that you’ve met those requirements.

How would you help me manage my project?

A consultant assisting a business with management of its incentive project should perform periodic reviews of the business’ incentive obligations to ensure that the business is on track to meet those obligations. At Marlynn Consulting, we perform periodic analysis of your incentive requirements during the year and provide you with a report of our results. Our report also details any findings or recommendations that we believe will help you to meet your project goals.

Ask Margo: Frequently Asked Questions About Economic Incentives (Part II)

As I stated in last week's post, I’ve been receiving calls from a number of businesses enquiring about their incentive projects and voicing their concens. I promised to provide some additional questions/concerns that you may be interested in. Again, this post is a continuation of  Frequently Asked Questions.

The following list encompasses questions I’ve received over the years, as well as others that may not have been asked yet, but will come up. If your burning question is not included, email them to me at info@marlynnconsulting.com and I will add your question to the list.

What happens if I miss my QTI goals and don’t qualify for the scheduled payment?

Usually, if a company does not qualify for one of its payment, that business will LOSE its QTI project. What this means is that the business’ annual QTI claim application will be denied. You will not receive a payment for the year you miss one or more of your incentive commitments and you will also lose any remaining payments scheduled under your incentive agreement.

However, if the State has approved an Economic Recovery Extension (ERE), you may be provided an opportunity to apply for the extension if your project is denied.

What is an Economic Recovery Extension (ERE)?

Usually when there is an extreme economic downturn, the State’s Legislators approve an ERE to assist QTI Businesses whose project goals may have been negatively affected. The ERE allows a business that was unable to meet one or more of its job requirements to extend the project’s job commitments by one or two years.

My payment was denied, what happens now?

With most incentive programs, if a business’ scheduled payment is denied because it did not meet one or more of its project’s commitments, that business’ incentive project will be terminated. What this means is that business will not receive the payment for that year. Nor, will it receive any remaining payments scheduled under its incentive agreement.

The QTI program has a concession that allows you to extend your job requirements by one or two years. However, the extension is not always available. For the other programs, this extension is not an option. If your incentive requirements are not met, you will LOSE your project and forfeit ALL remaining scheduled payments.

What if I don’t qualify for my Quick Action Closing Fund payment?

The Closing Fund program is a little bit different than the QTI and other incentive programs, in that businesses approved for a Closing Fund project are paid at the beginning, once the project is approved. In this case, if your business does not meet one or more of its Closing Fund goals, you will be responsible for repaying the State a portion of the money you received – plus interest and penalty.