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Discussion of tax-free zones continue <br /> <br />JOBZ proposal heard on the House side <br /> <br />Jennifer O'Rourke <br />One of Gov. Pawlenty's top initiatives <br />for greater Minnesota is the plan to <br />create tax-free zones around the state. <br />Touted now as the JOBZ (Job Oppor- <br />tunity Building Zones) proposal, the <br />bill to stimulate economic develop- <br />ment in rural Minnesota had its first <br />hearing in the House last week and is <br />likely to receive more hearings over <br />the next few weeks before the first <br />committee deadline of April 4. <br /> The chief author ofHF 3 is Rep. <br />Doug Magnus (R-Slayton) who <br />presented the bill, along with Louis <br />Jambois, with the business and <br />community development office of the <br />Dept. of Trade and Economic Devel- <br />opment (DTED), and DTED Com- <br />missioner Matt Kramer, to the Jobs, <br />Economic Development Budget <br />Committee chaired by Rep. Bob <br />Gunther (R-Fairmont). <br /> HF 3 is estimated to cost upwards <br />of $5 million in the out biennium, <br />which Pawlenty accounts for in his <br />budget proposal. The full House <br />Research summary ofHF 3 can be <br />found by visiting the LMC Bill Tracker <br />located in the Legislative section of the <br />LMC web site at: www. lmnc.org. <br /> The bill was amended in corn- <br /> <br />mittee with a delete-everything <br />amendment to address many of the <br />original concerns: <br />· The revised bill cleans up much of <br /> the language regarding definitions <br /> of the zones and now allows for a <br /> zone to consist of sub-zones or <br /> noncontiguous areas. Under this <br /> provision, one J©BZ zone could <br /> actually be part of five cities. <br /> This revision is important because it <br /> would allow an applicant to target <br /> key areas needing redevelopment. <br />· The delete-everything amendment <br /> to HF 3 is also more descriptive on <br /> qualifying businesses; thus addressing <br /> some of the concerns of Minnesota <br /> businesses moving stakes and <br /> relocating just because another <br /> community has a tax-free zone. The <br /> intent is to encourage more start-up <br /> and business expansion, as well as <br /> enticing out-of-state businesses to <br /> consider relocating to Minnesota. <br />· The original bill would have provided <br /> income tax exemptions for an <br /> individual living in the tax-free zone; <br /> that language has been removed. <br /> Testifying in support of the bill <br />were representatives of the Albert Lea <br />Economic Development Authority, <br />who explained how such a program <br /> <br />would address the competition they <br />experience with Iowa and help them <br />to recruit businesses into the area. <br /> Members opposing the bill said <br />the state should keep its investment in <br />programs with proven track records <br />for economic development such as <br />MN Technology Inc. and the MN <br />Investment Fund. The governor, <br />incidentally, has proposed reducing <br />state appropriations for both of these <br />programs. <br /> Next stop for the bill is consider- <br />ation by the House Tax Committee. <br />The Senate version was recently <br />introduced as SF 496 by Sen. Tom <br />Bakk (DFL-Cook), and was sent to <br />the Jobs, Housing, and Community <br />Development Committee. <br /> <br />For more information <br />To read a discussion of the related <br />policy questions pertaining to tax-free <br />zones, visit the Policy Research section <br />of the LMC web site at: www. lrnnc. <br />org (click on "In-Depth Policy <br />Analysis:Tax-flee zone initiatives" <br />under the Research Highlights <br />header).To read a summary of the <br />analysis, see the Feb. 12 issue of the <br />Cities Bulletin newsletter. ~ <br /> <br />Page 10 LMC Cities Bulletin <br /> <br /> <br />