9.0. HRSR 09-23-2002 - Laserfiche WebLink

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, NESoz,y 0° ,Trade Econonn c FACT SHEET: 2000 Business Subsidies Law Devekwent What is the Business Subsidies Law? ✓ The 2000 Minnesota Legislature amended Minn. Stat. §116J.993 to§116J.995(Laws of Minnesota 2000, Chapter 482, Article 12) providing clarification to the obligation of state and local government agencies and businesses related to certain business subsidies. ✓ Applies to business subsidy agreements signed on or after August 1, 1999. ✓ Under the repealer of no effect section, agencies are subject to reporting requirements for subsidy agreements that were made between July 1, 1995 and July 31, 1999. The requirements under the law are as follows: a business receiving state or local government assistance for economic development or job growth purposes must create a net increase in jobs in Minnesota two years of receiving the assistance; 4 a government agency providing assistance must establish wage levels and job creation goals to be met by the business receiving assistance; • agencies should use the 1999 MBAF form for subsidy agreements that were made between July 1, 1995 and July 31, 1999; and • a form should be submitted to DTED each year until the business has achieved all its goals. ✓ For business subsidy agreements signed on or after August 1, 1999, the reporting requirements are more expansive. The law requires that a business subsidy must meet a public purpose and a business subsidy may not be granted until the grantor has adopted criteria after a public hearing. The law also requires that a recipient must enter into a subsidy agreement with a grantor that includes specific wage and job goals. ✓ For agreements signed between August 1, 1999 and December 31, 1999 agencies should use the 2000 MBAF form and comply with the reporting requirements outlined in Minn. Stat. §116J.994 to • §116J.995. A form should be submitted to DTED each year until the business has achieved all its goals. Copies of the MBAF forms are available on DTED's website. Who does the law apply to, and for what types of subsidies? ✓ State and local government agencies with the authority to provide business subsidies with state or local government funds, and entities created or authorized by a local government with this authority, are subject to the law. The law gives a complete description of applicable agencies (i.e. "grantors"). ✓ The law covers business subsidies to for-profit businesses, and to nonprofits with at least 100 full- time equivalent positions and a ratio of highest to lowest paid employee, determined on the basis of full-time equivalent positions, exceeding 10 to 1. Types of assistance meeting the definition of a "business subsidy" include: • state or local government agency grants; • contributions of personal property, real property, or infrastructure; • the principal amount of a loan at rates below those commercially available; • reductions or deferrals of taxes or fees, including tax increment financing (TIF); • guarantees of any payment under any loan, lease, or other obligation; and, • preferential use of government facilities. ✓ Under Minn. Stat. §116J.993, Subdivision 3; the law explicitly excludes 22 types of assistance from the definition of business subsidies, including: • bonds issued for the benefit of an organization described in Section 501 (c) (3)of the Internal Revenue Code of 1986, as amended through December 31, 1999; • federal assistance until assistance has been repaid to, and reinvested by, the state or local government agency(once assistance has been repaid to and reinvested by a government agency it is subject to the reporting requirements outlined in the statute); • funds from dock and wharf bonds issued by a seaway port authority; business loans and loan guarantees of$75,000 or less;and, • federal loan funds provided through the United States Department of Commerce, Economic Development Administration until assistance has been repaid to, and reinvested by, the state or local government agency (once assistance has been repaid to and reinvested by a government agency it is subject to the reporting requirements outlined in the statute). Department of Trade and Economic Development Page 1 February 15,2001