Technology companies in the city are one step closer to receiving incentives for locating or expanding in Suffolk, after the Economic Development Authority approved a technology zone proposal at its Wednesday meeting.

The City Council still must vote on the plan before it will take effect.

Technology zones can be established in Virginia to help attract businesses that deal primarily in technology — such as modeling, analysis and simulation, computer systems design, scientific research, software publishers, telecommunications, computer and electronics manufacturing, and more.

“This just gives us the tool we don’t have in the toolbox today,” said Kevin Hughes, acting Economic Development Director, adding that the department would not waste the EDA’s and City Council’s time if it wasn’t worth it.

Technology companies have flocked to the North Suffolk area, especially, because the military’s Joint Forces Command, one of the city’s largest employers, is located there.

The technology zone covers two large swaths of land, one in the North Suffolk area and one covering the greater downtown area. To qualify, an existing business would have to be increasing its building space by at least 2,500 square feet or 10 percent of the previous space, whichever is more. New businesses would have to be occupying a previously vacant space or constructing a new space of 2,500 square feet or more. Either a new or existing business must have a minimum of five employees, and not be a home-based business.

Qualifying businesses will receive a rebate of half the business license tax for the entire Suffolk operation, not to exceed $30,000, for the year of the location or expansion. Half the personal property tax also will be refunded, up to $20,000, in the first year.

A proposal by some authority members last month to offer business license tax rebates only on the portion of the gross receipts that increase from the previous year failed, because the business license tax is based on the prior year’s receipts. Therefore, the company would have to wait a year to realize a benefit, Hughes said.