6.0. EDSR 04-10-2006 - Laserfiche WebLink

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Business Subsidy Reporting Q: What are the reporting requirements for government agencies that provided assistance to businesses between July 1, 1995, and July 31, 1999? A: Among the significant changes in the business subsidy amendments passed in 2000 was the reinstatement of reporting requirements for subsidy agreements made between July 1, 1995 and July 31, 1999. The law requires that a government agency providing assistance must establish wage level and job creation goals to be met by the business receiving assistance. A business that receives state or local government assistance for economic development orjob growth purposes must create a net increase in jobs in Minnesota within two years of receiving assistance. Each government agency must report the wage and job goals and the results for each project in achieving those goals to DIED using the 1999 MBAF. A copy of the 1999 MBAF is located on DTED's website. Q: Who reports on subsidies awarded by state agencies but administered by a local agency? A: State funds that pass through local agencies to businesses are reported by the state grantor. An example of this is DTED's Minnesota Investment Fund; awards under this program are reported by DTED. Q: Should a city and their Economic Development Authority (EDA) or Housing Redevelopment Authority (HRA) issue separate MBAF forms when reporting business subsidies or financial assistance? A: Yes, a city and their EDA/HRA should file separate MBAF forms when reporting on business or financial assistance. Q: Is the extension of a loan a new subsidy? A: If a grantor modifies apre-existing loan agreement without contributing any new funds to the project, DTED views the change as an amendment to an already existing agreement rather than as anew agreement. Grantors should note any amendments to an agreement when they submit a Minnesota Business Assistance Form (MBAF) to DTED for that agreement. However, if a grantor modifies an already existing agreement by contributing new funds to the project, the grantor should treat the modified agreement as a new agreement that may be subject to the law. If a grantor modifies an agreement by contributing new funds to the project, and that agreement was not previously subject to the business subsidies law, the grantor should determine whether the assistance is subject to the law based on the total amount of assistance. For example, if a grantor awards a loan of $15,000 that is exempt from the business subsidies law, and a year later awards an additional $100,000 to the same recipient for the same project, the grantor should submit an MBAF for the total $115,000 in assistance and fulfill the law's requirements for business subsidies in relation to that assistance. If a grantor modifies an agreement by contributing new funds to the project, and that agreement was previously subject to the business subsidies law, the grantor should submit one MBAF for the total amount of assistance and note amendments made to the original agreement. Q: Are loans from revolving loan funds considered business subsidies? A: Yes, loans from revolving loan funds are considered business subsidies unless federal funds are involved. If federal funds are not involved, then these loans are subject to reporting under the statute. The amount subject to reporting is $25,000 and above. l2: Is enterprise zone assistance exempt from the law based on the exemption for "assistance that is generally available to all businesses or to a general class of similar businesses..."? A: No, because local government agencies have discretion over which qualifying businesses receive enterprise zone assistance, that assistance does not meet this exemption and therefore must be reported by the local government agency. Department of Trade and Economic Development Page 2 of 5 February 20, 2001