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M:\MasterFiles\1999 thru 2010\2000\City Council\Work Session Packets\03-06-00\Item No. 04 -- Business Subsidy Policy--Aaron Parrish.doc Item No. 4 Staff Report No. Meeting Date: 3-6-00 Type of Business: WK WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council Members From: Aaron Parrish, Economic Development Coordinator Item Title/Subject: Business Subsidy Policy Date of Report: August 29, 2018 Background: Last year the Minnesota Legislature and Governor passed the “1999 Business Subsidies Law” (Minnesota Statutes § 116J.993 through §116J.995). As a result, communities are required to develop and adopt a business subsidy policy for all subsidies granted after August 1st, 1999. After a policy is developed, business subsidies granted that exceed $25,000 require a local unit of government to enter into a “Business Subsidy Agreement.” In short, the policy under consideration will guide the development of “Business Subsidy Agreements.” Accordingly, the law outlines eight elements that must be incorporated into the agreements including: • A description of the subsidy, including the amount and type of subsidy, and the type of district if the subsidy is TIF • A statement of the public purposes of the subsidy (Generally, public purposes include enhancing economic diversity, creating high-quality job growth, providing for job retention where loss is imminent and demonstrable, stabilizing the community, and increasing the tax base) • Goals for the subsidy • A description of the financial obligation of the recipient if the goals are not met (If goals are not met, a recipient must pay back subsidy with interest; Partial fulfillment of goals will require a prorated repayment) • A statement of why the subsidy is needed • A commitment to continue operations at the site where the subsidy is used for five years • If applicable, the name and address of the parent corporation of the recipient • A list of all financial assistance by all grantors for the project Types of assistance meeting the definition of a “business subsidy” include: • State or local government agency grants • Contributions of real property, personal 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 • Preferential use of government facilities The law also explicitly excludes 18 types of assistance from the business subsidy requirements including assistance provided for the sole purpose of renovating building stock, and various other