06-22-1999 Council Agenda - Laserfiche WebLink

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JUN 18 '99 02:02PM EHLERS & ASSOCIATES P.6 /9 O 2 W 2 To: Joel Hanson From: Rusty Fifield Subject: Business Subsidies Date: June 18, 1999 EHLERS & ASSOCIATES INC Beginning August 1, 1999, state and local governments face new requirements for granting business subsidies. These requirements replace the current wage and job goal reporting. The new Iaw will be codified as Minnesota Statutes, Section 1161.993. 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. There appears to be a recognition that the statute contains flaws that should be addressed next year. What is a business subsidy? The statute is important for both the definition and the specific exclusions. Business subsidy are 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 ". The statute specifically excludes certain items from the definition. The following are not business subsidies: • business subsidy of less than $25,000. • assistance generally available to all business or to a similar class of business. • public improvements to buildings or land owned by state or local government that serve a public purpose and do not principally benefit a single business or a defined group of businesses at the time the improvements are made. polluted redevelopment property (M.S. 1167.552) renovating old or decaying building stock or bringing it up to code if not more than 50% of the total cost. assistance to job training /readiness organizations to assist with those services. housing. • pollution control or abatement. energy conservation. LEADERS IN PUBLIC FINANCE 3060 Centre Pointe Drive 651.697.8506 fax 651.697.8555 Roseville, MN 55113.1105 rusty @ ehlers- Inc.com PAGE 255