Meeting #1 SR 02-05-2001 - Laserfiche WebLink

Home Browse Search

In 1999, the State Legislature adopted new regulations for the granting of business subsidies by state and local government. These requirements replace the current wage and job goal reporting. The Business Subsidies Statutes are codified as Minnesota Statutes, Section 116J.993 through 116J.995. This summary highlights the statutory requirements for business subsidies as amended by the Legislature in the 2000 session. The regulation of business subsidies adds new complexities to the development process. Make sure that you understand the statutory requirements before providing direct or indirect assistance to any for-profit or non-profit entity. If in doubt, ask questions. Many of these provisions are subject to interpretation. Who is subject to the Business Subsidy Statutes? Any state or local government agency or public entity may be a "Grantor" under the Statutes. Potential Grantors include cities, counties, school districts, townships, economic development authorities, housing and redevelopment authorities, port authorities, and municipal utilities. Multiple grantors may exist within a single jurisdiction. Each Grantor must comply with the Statutes. What is a business subsidy? The Statutes set forth a definition and the specific exclusions for business subsidies. Both must be considered in determining if a specific action is a business subsidy and subject to the Statutes. A business subsidy is defined as "grant, contribution of personal property, real property, infrastructure, the principal amount of a loan at rates below those commercially available to the recipient, any reduction or deferral of any tax or any fee, any guarantee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business". This definition covers many different forms of economic assistance. The Statutes specifically excludes twenty-two items from the definition. The following are not business subsidies: (a) (b) a business subsidy of less than $25,000; assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (c) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (d) redevelopment property polluted by contaminants as defined in section 116J.552, subdivision 3; (e) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; (f) assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (g) assistance for housing; (h) assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under 469.174, subdivision 23; (i) assistance for energy conservation; O) tax reductions resulting from conformity with federal tax law; (k) workers' compensation and unemployment compensation; (1) benefits derived from regulation; EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113 651.697.8500