6.0. EDSR 04-10-2006 - Laserfiche WebLink

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Developing Criteria and Stating Public Purposes for Business Subsidies Under Minn. Stat. §1167.993 through §1167.995, granting agencies must develop criteria for awazding business subsidies after a public hearing. In addition, each business subsidy agreement must indicate a public purpose. The law allows grantors flexibility in stating public purposes appropriate for their communities, but requires that agreements meet a public purpose which may include, but may not be limited to, increasing the tax base and that job retention be used as a public purpose only when job loss is specific and demonstrable. Although the law does not require public purposes to be addressed in the criteria, grantors may want to refer to the public purposes below for criteria ideas. The following public purposes and criteria were recommended by the legislatively established Corporate Subsidy Reform Commission. Enhancing Economic Diversity / In what ways does the project improve the mix of businesses in the azea so as to: (1) allow the area to participate in fast-growing industries; (2) protect the azea from adverse economic consequences caused by slow growth or declining industries that are dominant in the area; and (3) provide essential consumer services, or develop a network of local suppliers to businesses within the community where they otherwise do not exist? Creating High-Quality Job Growth / How many new jobs will be created, and what will they pay? / How do wages proposed to be paid compare to community wage levels? / How many jobs will be created with opportunities for career advancement, educational opportunities, or occupational training? / What aze the projections for job growth at the project over the nest period of two to five yeazs? / What aze the fringe benefits that are payable for the jobs (particularly, is there child care, health caze, and pension coverage)? Providing for Job Retention, Where Loss is Imminent and Demonstrable / After collecting the necessary documents, is there substantial evidence that the company will have to shut down involuntarily? / After collecting the necessary documents, is there substantial evidence that the company has received an offer to move to another state or community that is attractive enough that a reasonable person would seriously consider a move for business reasons? / What potential negative effect would the subsidy have on other competing businesses and overall azea job quality? Stabilizing the Community / How will the project constitute a significant investment in an azea that (1) has not historically received similaz investments; (2) is a blighted azea; or (3) is an economically depressed area? / How will the project stimulate other investment or create spinoff businesses and jobs in the azea? Increasing the Tax Base Note: The law requires business subsidies to meet a public purpose which may include, but may not be limited to, increasing the tax base, but grantors may use increasing the tax base in conjunction with another public purpose. / How will the project uniquely affect the property tax base for all taxing jurisdictions, both short term and long term and both directly and indirectly? / How will the project affect other local business and individual property tax bills? SOURCE: Corporate Subsidy Reform Commission, 1997 Corporate Subsidy Reform Cwmnission Report, February 6, 1998. Department of Trade and Economic Development Page 6 of 6 January 22, 2003