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AGENDA ITEM 7A STAFF ORIGINATOR: Mary Alice Divine DATE: 06/23/03 TOPIC: Public Hearing: Consideration of Resolution No.03- 93 adopting a Revised Lino Lakes City Council Business Subsidy Criteria BACKGROUND: The Business Subsidy Act (Minnesota Statutes 116J.993 -995) became effective on August 1, 1999. The Act required grantors to adopt business subsidy criteria prior to granting business subsidies. The city council adopted criteria in 1999. The Act required that criteria include a policy for wages on jobs created by subsidies. Each business receiving a subsidy had to establish how many jobs it would create and at what wage. Recognizing that not all subsidies were for the purpose of creating jobs, the Minnesota Legislature amended the Act in 2000, but delayed the effective date of those changes until 2003. Among the changes at the Legislature are the following: • The number of new jobs may be set at zero if the grantor determines that job creation is not the intent of the subsidy. A public hearing is required prior to setting the requirement at zero. Retained jobs may be considered only if job loss is "specific and demonstrable." The old requirement was "imminent and demonstrable." • Criteria may not be set on a case by case basis. • Wage levels must be specific, either in dollar amount or by reference to an index or formula, which can be translated into a dollar amount. • Grantors may extend by up to one year the time recipients have to meet the job and wage goals. • The grantor may deviate from the criteria in specific cases but must document the reasons for doing so and report to the state. • Recipients are required to remain within the jurisdiction for five years after receipt of the grant, but that may be waived by the grantor following a public hearing. The previous requirement was to remain at the site for five years with no provision for waiver. • The criteria must articulate the standards by which requests will be evaluated.