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IIb ~~1N ES p~. ~`p " FREQUENTLY ASKED QUESTIONS T=ade &- About the 2000 Business Subsidies Law Economic Development Minn. Stat. 6116J.993 to S116J.995 Following is a list of questions that the Department of Trade and Economic Development (DYED) has received about Minn. Stat. §116J.993 to §116J.995, and DTED's responses to those questions. The responses reflect DTED's understanding of the law's intent as well as conversations the department has had with the Attorney General's Office. Agencies that have proceeded with business assistance projects operating under an understanding that differs from an opinion provided below should use the following clarification as they proceed with future business assistance agreements. DEFINITION OF BUSINESS SUBSIDY Q: If a grantor awards a subsidy of $15,000 for a project, and a year later awards an additional $15,000 for the same project under a new agreement, is that subsidy subject to the law or does it meet the exemption for "a business subsidy of less than $25,000"? A: If the grantor awards both subsidies for the same project, the grantor should report the subsidy based on its total amount (i.e. $30,000). Q: If more than one grantor contributes to a project that totals $25,000 or more, but each individual grantor's contribution is less than $25,000, is the project subject to the law? A: The definition of "business subsidy' applies to contributions from an individual grantor for an individual project. Therefore, if an individual grantor contributes less than $25,000 to a project, that grantor is not subject to the law's requirements for that project. l2: What if DYED and acity/county agency each provided a business loan of $40,000 to a project, would both agencies be required to report? A: Each agency would not be required to report even though the total amount of business assistance from each grantor to the project exceeds the statutory reporting requirement of $75,000. The business subsidy law applies to a state or local government agency that provides a business subsidy not project specific activities. Q: Are subsidies originating from the federal government subject to the law? A: Funds that originate from the federal government and are invested by a state or local agency are subject to the law if they have been repaid to and subsequently reinvested by the state or local agency. In these cases, DYED views the state or local agency as having total control over how those funds are invested or who receives them. Federal funds are not subject to the law the initial time they pass through a local agency. O: The law defines business subsidies as including "the principal amount of a loan at rates below those commercially available to the recipient " Will DYED establish a rate that grantors can use to make this determination? A: No, because the rate commercially available to the recipient will differ for different projects and recipients, DYED does not intend to stipulate a particular rate below which loans are not commercially available. Individual grantors are responsible for making this determination. Department of Trade and Economic Development Page 1 of 5 February 20, 2001