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