09-22-1999 Council Agenda - Laserfiche WebLink

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+1NN Es 07,1 V Trade & — Economic Development FACT SHEET: 1999 Business Subsidies Law Laws of Minnesota 1999, Chapter 243, Article 12: to be codified as Minn. Stat. §116J.993 to §116J.995 What is the 1999 Business Subsidies Law? ✓ Minnesota Statutes (Minn. Stat.) §116J.993 through §1164.995 regulate business subsidy agreements signed on or after August 1, 1999, and replace Minn. Stat. §1164.991. ✓ Agencies are no longer subject to reporting requirements for agreements signed under Minn. Stat. §116J.991, but businesses must still comply with agreements signed before August 1, 1999. Who does the law apply to, and for what types of subsidies? ✓ State and local govemment 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 (Le. "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 govemment 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 govemment facilities. ✓ The law explicitly excludes 18 types of assistance from the definition of business subsidies, including all awards of less than $25,000. ✓ Four of the types of financial assistance excluded from the definition of business subsidies are subject to different reporting requirements under Minn. Stat. §1164.994, subdivision 7. These types of assistance include: • property polluted by contaminants as defined in Minn. Stat. §116J.552, subdivision 3 (i.e. brownfields); assistance provided for the sole purpose of renovating building stock or bringing it up to code, if the assistance is 50 percent or less of the total cost; assistance for pollution control or abatement; and assistance for a TIF soils condition district as defined in Minn. Stat. §469.174, subdivision 19. What is required in order to award a business subsidy? ✓ A business subsidy agreement may not be signed on or after August 1, 1999, until the grantor has held a public hearing on, and adopted criteria for, awarding business subsidies. The criteria must include a wage policy for jobs created by a recipient. ✓ The law outlines 8 elements that must be included in business subsidy agreements: a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is TIF; a statement of the public purposes for the subsidy; goals for the subsidy; a description of the financial obligation of the recipient if goals are not met; a statement of why the subsidy is needed; a commitment to continue operations at the site where the subsidy is used for five years; the name and address of the parent corporation of the recipient, if any; • and a list of all financial assistance by all grantors for the project. ✓ All business subsidy agreements must include job and wage goals with specific goals to be attained within two years of the benefit date. The law does not specify minimum criteria for these goals. Department of Trade and Economic Development Page 87 July 27, 1999