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062600 EDAOfficial File Copy CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North June 26, 2000 President W. Peter Enck Commissioner Sharon Cassen Commissioner Don Collier Commissioner Pat LaVine Norby Commissioner Mark Thompson 1. Call to Order 2. Roll Call 3. Approval of Regular Meeting Minutes of May 22, 2000 4. Public Hearing: Resolution Adopting Business Subsidy Criteria 5. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 Approved EDA Minutes Regular Meeting May 22, 2000 City Hall CALL TO ORDER ROLLCALL APPROVE MINUTES IMP. PROJECT 669 Item 4 EDA RESOLUTION 00-02 Item 4 ADJOURNMENT President Enck called the meeting of the Economic Development Authority to order at 8:11 p.m. Present: W. Peter Enck, President Sharon Cassen, Commissioner Don Collier, Commissioner Pat LaVine Norby, Commissioner Mark Thompson, Commissioner Motion was made by Commissioner Collier, seconded by Commissioner Cassen, to approve the Regular Meeting Minutes of May 8, 2000. All present voted in favor. Motion carried. President Enck introduced for discussion Item 4, Resolution Calling for a Public Hearing on the Proposed Adoption of Business Subsidy Criteria. Commissioner Cassen introduced the following resolution and moved its adoption: "RESOLUTION CALLING FOR A PUBLIC HEARING ON THE PROPOSED ADOPTION OF BUSINESS SUBSIDY CRITERIA". The motion for the adoption of the foregoing resolution was seconded by Commissioner Norby, and upon vote being taken thereon, the following voted in favor thereofi Enck, Cassen, Collier, Norby, Thompson; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. Motion was made by Commissioner Collier, seconded by Commissioner Cassen, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:13 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA Page 1 May 22, 2000 EDA REQUEST FOR ACTION Originating Depa~'tment Approved for Agenda Agenda Section Public Community Development Hearina / 6-~'~ Item No. By: Kirk McDonald By:. / PUBLIC HEARING; RESOLUTION ADOPTING BUSINESS SUBSIDY CRITERIA REQUESTED ACTION The attached resolution adopts proposed Business Subsidy Criteria policies and a public hearing ~s required before the adoption of the criteria policies. It is staff's understanding that the EDA/City Council desire to discuss the criteria at a work session before taking final action on the criteria. Therefore, staff recommends that the EDA open the public hearing, take public comment, close the public hearing and then postpone action adopting the criteria until after further discussion at a future work session. POLICY/PAST PRACTICE The EDA has always evaluated requests for business subsidies on a case-by-case basis and considered a number of factors pertaining to the requests. BACKGROUND The 1999 Minnesota Legislature enacted a new law regulating business subsidies entered into or authorized after August 1, 1999. All Minnesota cities with populations of more than 2,500 are required to hold a public hearing on and adopt criteria for awarding certain business subsidies and must report to the state on an annual basis. City staff has been coordinating with the City Manager and City Attorney on the drafting of such a policy for New Hope and a draft of the policy is attached. At the May 22 EDA meeting, the EDA scheduled a public hearing for June 26 to discuss and consider a policy. The City Attorney stated in previous correspondence that, in general, the proposed policy contains the basic and standard language being used by other neighboring cities. The proposed policy would not have a significant impact on the financial assistance that New Hope provides to developers due to the fact that New Hope's assistance is usually geared towards providing housing assistance or site redevelopment where a recipient's investment in purchase or site preparation is 70 percent or more of the assessor's current estimated market value. These circumstances are exceptions to the business subsidy requirements of the statute. (cont'd.) MOTION BY .. t/'~~ ~' SECOND BY Request for Action The enclosed draft "City of New Hope Page 2 6-26-00 Policy for Business Subsidies" contains the following sections: · Purpose To set guidelines that would enable the City to comply with Minnesota Statutes. · Objective · To attract and enhance commercial and industrial · Definition · Policy Guidelines development thereby increasing employment opportunities for New Hope residents and developing the job base and tax base of the City. A grant, contribution of personal or real property, infrastructure, the principal amount of a loan at rates below those commercially available, a reduction or deferral of any tax or fee, any guarantee of payment or any preferential use of government facilities given to a business. The policy would be used for business subsidies that equal or exceed $25,000. States that the City shall evaluate each request for a business subsidy based on the best interest of the City and its residents, based on factors that may include the following: Proposed number and type of jobs created. Estimated taxable value of the proposed development. The commitment of the proposed development to continue operations at the site where the subsidy is used for at least five years after the benefit date. The ability of the proposed development to fulfill or provide a desired amenity, facility or service that is not provided by the City. A listing of certain forms of financial assistance that are not a business subsidy and not required to meet the criteria for business subsidies is also listed in the policy. The City Attorney has indicated in recent correspondence that a 2000 amendment to the Business Subsidy Criteria law prohibits the review of a subsidy request on a case-by-case basis. In other words, the adopted policy must set forth specific job and wage goals a proposed subsidy recipient must satisfy to qualify for funding. This means a specific "wage floor" for created jobs which could be stated as a specific dollar amount or some sort of formula that would generate a specific dollar amount. Attached is a 3-page model policy the City Attorney obtained from the League of Minnesota Cities that sets out some more specific policies and criteria than staff previously reviewed. This could form a basis for discussion at the Council's work session as to specifics of a wage and jobs goal policy. Staff recommends that the EDA conduct the public hearing and then discuss this policy further at a future work session. ATTACHMENTS EDA Resolution · 6/21 City Attorney Correspondence and Model Policy · 5/26 City Attorney Correspondence · Proposed New Hope Policy for Business Subsidies · Department of Trade & Economic Development Information .0_6/.2.__1/00 10:14 FAX 7634935193 J S 8, S, ATI'0RNEYS ~ NEW HOPE CH [~]002 OF ~OL*ra~ LORI~S Q. BRYNE. STAD JENSEN & SONDRALL, P.A. Attorneys At Law 8~25 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNgSOTA 55443-1968 TELEPHONE (763) 424-8811 · TELEFAX (763) 493-5193 e-mall law~jensen-sondrall.com June 21, 2000 Kirk McDonald New Hope Community Development Director 4401 Xylon Avenue North New Hope, Minnesota 55428 RE: Business Subsidy Criteria Our File: 99.10049 Dear Kirk: Attached are two resolutions for consideration at the June 26, 2000 City Council and EDA meetings. Both resolutions adopt proposed Business Subsidy Criteria policies previously mailed to you. As you know, a public hearing has been scheduled for the June 26* meeting before both the Council and EDA. The public hearing is required by law before adoption of the criteria policies. It is my understanding the Council has a desire to discuss the criteria at a work session before taking final action on the criteria. I would recommend the Council and the EDA open and close the public hearings and then postpone action adopting the criteria until after discussion at whatever work session they intend to discuss this matter. As we discussed, the criteria they have now requires an amendment with respect to job creation and wage goals. Specifically, a 2000 amendment to the Business Subsidy Criteria law prohibits the review of a subsidy request on a case by case basis. In other words, the adopted policy must set forth specific job and wage goals a proposed subsidy recipient must satisfy to qualify for funding. This means a specific "wage floor" for created jobs which could be stated as a specific dollar amount or some sort of formula that would generate a specific dollar amount. I am attaching a 3 page model policy I obtained from the League of Minnesota Cities that sets out some more specific policies and criteria than we previously reviewed. This could form a basis for discussion at the Council's work session as to specifics of a wage and jobs goal policy. Very truly yours, Stevcn A. Sondrall Jl~tSk'~l & SONDRALI~ P.A. Enclosures cc.' Dan Donahue Valerie Leone EDA RESOLUTION NO. 00- RESOLUTION ADOPTING BUSINESS SUBSIDY CRITERIA BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, Minnesota Statutes, sections 116J.993 through 116J.995 (the "Statutes") require the adoption of criteria for the granting of business subsidies as defined in the Statutes; and WHEREAS, the New Hope EDA has determined that it is necessary and appropriate to adopt business subsidy criteria pursuant to the Statutes; and WHEREAS, the New Hope EDA has performed all actions required by law to be performed prior to the adoption and approval of the proposed business subsidies, includilag the holding of a public hearing upon published notice as required by law on June 26, 2000. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope, that the business subsidy criteria, attached hereto as Exhibit A of this resolution are hereby approved, ratified established and adopted and shall be placed on file at the New Hope City Hall, 4401 Xylon Avenue North, New Hope, Minnesota. Dated the day of ,2000. W. Peter Enck, President Attest: Daniel J~ Donahue, Executive Director p:~Auorney~SAS\Documen~.~resolution approving business subsidy critcfia..£DAw[xl.wpd -1- 06/21/00 10:15 FAX 7634935193 J S & $, ATr0RNEYS NEW HOPE CH Model Legislation for Local Governments to Come into Compliance 'with MN State Statute 116J.993 - 995 005 Business Subsidy Policy Definitions "Business subsidy" or "subsidy" means a state or local government agency grant, contribution of personal property, mai property, infrastructure, the principal amount of a loan at rates below those commercially available to the business, 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. These criteria only apply to subsidies when the cumulative assistance package is over $25,000. (See exclusions in Attachment A.) A living wage will be defined as 150% of the federal poverty level for a family.of four. Businesses that provide employer-paid comprehensive health insurance may pay a living wage defined as 130% of the federal poverty level for a family of four. Comprehensive health insurance is defined as: - Employer 100% premium payment for individual coverage or 80% premium payment.for family coverage;' - Empl. oyer minimum payment of $0% for office visits, emergency care, surgery and prescriptions;' - A maximum yearly deductign of $1,000; and - Maternity coverage. " Responsible labor' relations are defined as neutrality on union organizing, providing a complete and accurate list of names and addresses of employee.s, reasonable access to employees and facilities during non-worki, ng periods, voluntary recognition based on a card check demonstrating that a union represents a majority of employees in a bargaining unit, and binding arbitration on the first contract. fCi,ty]'s Priorities [City] will have an overall goal that 60% of the new jobs created each year under this business subsidy policy will be held by City residents. The staff will review the progress toward these goals and provide quarterly progress reports to the appropriate committees. Staff shall work with assisted business to achieve these goals. [City! wi]l'focus its job creatiofi and retention assistance at businesses that demonstrate a clear and ongoing commitment to the community by providing living wage jobs to'their employees and to residents where applicable by giving priority to these businesses over businesses that have not traditionally paid living wages. '[City] will hold a public hearing about ali proposed subsidies over $25,000. Written comments submitted before the hearing will become part of the official considerations. There will be a two week period prior to the public hearing for existing business owners, managers and · employees to comment on the impact the city subsidizing the business is expected to ,h, ave on them. If the subsidized business is expected to result in job loss in existing businesses, the city must compare the numbers of and salaries of the jobs that will be created to the ones that are expected to be lost. J S & S, A~I~ORNE¥S ~ NEW HOPE CH ~006 06/21/00 10: 16 FAX 7634935193 · .¥'?-/~ '.' A busings subsidy must have a deSned public pu~ose. ~cre~mg the t~ b~e may no~ be used ~ a public p~os~, nor c~ job retention be used ~ a public pu~os~ u~ess job loss is i~ent ~d . Proposes for dkect lo~s must be unabl~ to obt~n ~11 private fin~cing b~f~re applying for c[~ · :' · funding. Lo~ ~tces must hive p~icipa~on by a private lender to assume at le~t 50% of ~e . Business subsidies in ~e fo~ of ~a must be structured as fo~ivabl~ lo~s. For other Wpes of subsidies, ~e a~m~nt m~t sta~ ~ f~r m~k~t v~ue of ~e subsidy to ~e business, including v~uc of conveying pro~ at less th~ a f~ maker price, or other in-~nd benefi~ to the business. 'eyed wit~ ~o ye~ for ~ number of jobs ~at ~ey will create A business must s~t_go~s to be. ac~ __~ ~ ..... ,,h~ ~ad the wa~es ~at ~esejobs will P~Yt .,, Businesses ~;~;[e (or ?tmn) on~ ~ll-~.~e ~vm~ wage job per $35,~ o . o~y be considered created d ~ey ~e ~n add,non to ~e ~gh~t nUmber of employe~ that ~e busings h~ had in thc 18 monks prior to receiving the subsidy. ~. A business must have a go~ for the pe~enmge 6f new jobs that will be held by Ci~ resident. ~. ~e bus,ess m~t ~sclose if ~he subsidy is expected m result ~job loss (wi~ ~e business) elsewhere ~d / or how this will ~pact job levels of the b~iness in Minnesota. ~. ~e busings must disclose ~Y potenti~ adve~e impact on the environment that could result groin project. iubsid¥ Aereement Businesses must be willing to enter into a subsidy agreement that includes: (I) a statement of why the sabsidy is needed; (2) a statement of the publi~ purpose for the subsidy; (3) a list of all financial assistance by all grantors for the project; (4.) t~e name and address of the parent corporation of the business, if any; (5) a description of the subsidy, including the amount and type of subsidy."and type of disuict if the subsidy is tax increment financing; (6) a statement of de job and wage goals for the project; (7) a description of the financial obligation of the business if the goals are not met; (8) a commitment to continue operations at the site where the subsi, dy is used for at least five years after · the benefit date; - on oin~- unresolved ~dverse action on their record with t that the business does not h.av¢ an .g ~, ' on tsl Protection Agency (9) a staiemen ......... :-:-,.-,,,,,,,, tOSHA,) the Envlr___men · the Occupational Safety ana (EPA) or the National Labor Relations Board (NLRB); ~10) a statement that the business has a business-wide affumative action policy; (11) a rextuirement that the business offer employees the opportunity to participate in a health care program which includes an employer contribution; 06/21/00 10117. FAX 7634935193 J $ & $, ATI?0RNEY$ ~ NEW HOPE CH (12) a requirement .thai the business invest a matching portion equal to .$% of their subsidy for training workers'; and (13) a requirement that the business invest a matching portiOn.equaI to .5% of their ~ubsid encouraging housing opportunities for their employees. This assistance may be in th~ ff~rr~n of advances for down payment or closing costs, grits for house or property ac uismon pam}.erships with affordable housin,, a~enc~ .... ,__~__ ,~.__j_ . ~ .q, . .' ' ,.or employee population. ~ ~' ,,.o vL ~uu~. r'unc~s must oe availal~le to Me general 007 All other things being equal and to the extent legally possible, preference will be given to applicants meeting the following criteria: (1) businesses that contribute to employee child care and retirement accounts; (2) businesses that are. ldcally owned; (3) businesses that engage in responsible labor relations; (4) businesses that have agoal that 60% or more of the new jobs will be held by City residents; (5) businesses that have traditionally paid living wages. 05/16/00 14:21 FAX 7634935193 o a ~ 2, Ailo~axa ~ '- · C,-ORDON L. J~ * WlLLt,qd O. SW~SO~ s'rgv'l~ A. SONDRALL Wg.a,~ C. S*num't C. A~DE~ Pr~,ucso~ JULm A, Tm~ LOPdU~ Q. Cm~i~mt By Ti~ M~mesom State Bm* Amocimlo~ t'Q~aliF~/ADR Nmm. M JENSEN SWANSON & SONDRAI,L, P.A. Attorneys ~It Law ss2~ Eomaaoo~: Caossmo, S'rg. 20i BROO~a.'gN PARK, MINNESOTA $$443-1999 TELl/rHONE (763) 424-8811 · TELEFAX (763) 493-5193 E-MAIL jSS(~jsspa.com May 16, 2000 Kirk McDonald Community Development Director City of Now Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: Proposed New Hope Business Subsidy PoUcy Our FHe No.: 99.10049 Dear Kirk: Enclosed are City Council and EDA resolutions calling for a public hca.ring on the proposed adoption of business subsidy criteria we discussed in our recent meeting. The adoption of this criteria by the City and the EDA is required by Minn. Stat., §§116J.993 to 1161.995. These resolutions can be adopted at the May 22'~ meeting. They call for a public hearing at the June 12~ meeting on the proposed business subsidy criteria. I have also enclosed our proposed criteria. This is basic and standard language being used by other cities. The enclosed information is a combination of language taken from the Crystal and Maple Grove policies. Basically, I don't see this policy impacting the financial assistance New Hope provides developers. This is due to the fact New Hope's assistance is geared towards providing housing assistance or site redevelopment where a recipient's investment in purchase or site preparation is 70% or more of the assessor's current estimated market value. These circumstances are exceptions to the business subsidy requirements of this statute. These exceptions could be said to "swallow the rule" as it relates to New Hope's financial assistance programs. May 16, 2O00 Page 12 I will take responsibility for publishing notice of the public hearings before both the City Council and EDA at the June 12~ meeting. I will also provide you with another resolution adopting the business subsidy criteria for the ~Iune 12a' meeting. The proposed criteria enclosed satisfies the statutory requirements for the crkeria, however both staff and Council should feel free w mst~e any additions to this criteria as seen fit. Please comact me if you have any questions or commen~ concer~in~ the enclosed ma~riaI. V~ yours, Steven A. Sondrall SWANSON & SONDRALL, P.A. Enclosures cc: Dan Donahue Daryl Sulander Phil Kern Valerie Leone EXBIBIT A CITY OF NEW HOP~E POLICY FOR BUSINESS SUBSIDIF_.S Purpose: The purpose of this policy is to set guidelines that would enable the City of New Hope to comply with Minnesota Statutes 116J.993, et seq. Objective: The objective of the City of New Hope is to attract and enhance commercial and industrial development thereby increasing employment opporttmifies for New Hope residents and developing the job base and tax base of the City. Definition Of Business Subsidy: A business subsidy means a state or local government agency grant, contribution of persoxml 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 g~mntee of any payment under any loan, lease, or other obligation, or any preferential use of government facilities given to a business. This policy will be used for business subsidies that equal or exceed $25,000. A proposed subsidy shall be considered to offset land costs, site development costs, building costs and design specifications that exceed the City's maxim~m requirements. Policy Guidelines: The City shall evaluate each request for a business subsidy based on the best interest of the City and its residents. In determining whether to provide a subsidy, the City shall consider factors it deems appropriate, which may include the following: Proposed number and type of jobs created. Job and wage goals will be sensitive to prevailing wage rates, economic and market forces over which neither the developer or community have comxol and the financial resources of the developer. Estimated taxable value of the proposed development. The commitment of the proposed development to continue operations at the site where the subsidy is used for at least five years after the benefit date. The ability of the proposed development to fulfill or provide a desired amenity, facility or service that is not provided by the City. -2- 05/16/00 14:24 FAX 76349aS19b o ~ c~ a, r~lx-~,~ The City recognizes that each proposed development is ~_mique and has specific characteristics that make the proposed development desirable to the City and in making its determination, the City may usc some or all of thc foregoing factors. The City Council will make a determination as to whether the proposed subsidy is in the best interests of the City; provided that if thc subsidy is in excess of $100,000 the determination sbnl! be preceded by a public hearing. Consistent with Minnesota Statutes 1161.993, Subdivision 3, the following forms of financial assistance arc not a business subsidy, and recipients will not typically be required to meet thc criteria for business subsidies set forth in this policy statement: 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Business subsidy of less than $25,000; Assistance that is generaily available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; Public improvements to buildings or lands owned by the state or local government that serve a public purpose and. do not principally benefit a single business or defined group of businesses at the time the improvements are m~de; Redevelopment property polluted by contaminants as defined in Minnesota Statutes, Section 1161.552, Subdivision 3; Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than S0 percent of the total cost; Assistance provided to organizations whose primary mission is to provide job readiness alld tr~inin..~ services if the sole purpose of the assistance is to provide those services; Assistance for housing; Assistance for pollution control or abatement; Assistance for energy conservation; Tax reductions resulting from conformity with federal tax law; Worker's compensation and unemployment compensation4 Benefits derived from regulation; Indirect benefits derived from assistance to educational institutions; Funds from bonds allocated under Minnesota Statutes, Chapter 474A; Assistance for a collaboration between a Minnesota higher education institution and a business; Assistance for a tax increment financing soils condition district as dc£med under Mirmcsota Statutes, Section 469.174, Subdivision 19; Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated m~rket value; and General changes in tax increment financing law and other generated tax law changes of a principally technical nature; and Any other forms of assistance that may be defined by law as not constituting a business subsidy under Minnesota Statutes, Section 116J.993, Subdivision 3. -3- _ Trade & Ec0i56mic De~lo]:rment February 22, 2000 To all Minnesota state and local government agencies: The 1999 Minnesota Legislature enacted a new law (Laws of Minnesota 1999, Chapter 243, Article 12; codified as Minn. Stat. §116J.993 to §1165.995) regulating business subsidies entered into or authorized on or after August 1, 1999. This law repeals its predecessor, Mina. Stat. os 116J.991, and introduces new operating and reporting requirements. Agencies si~ning agreements to award business subsidies or qualifying financial assistance must provide annual repons to DTED for each agreement. Please note that agencies no longer need to report on agreements signed prior to August 1, 1999. The law also requires local government agencies representing a population of more than 2,500 and all state government agencies to file a report even if they have not awarded any business subsidies. Local government agencies representing 2,500 or fewer people are exempt from reporting unless they have awarded a business subsidy in the past five years. The department has developed a new Minnesota Business Assistance Form to collect information from business subsidy and/or financial assistance agreements. If you are required to report but have not signed a business subsidy or fmancial assistance agreement during the period AugUst 1, 1999 through December 31, 1999, please answer questions 1 through 13 on the form and follow the directions. Please submit a separate form for each agreement. All forms must be received or postmarked by April 1, 2000. Only forms meeting this deadline will be included in the department's summary analysis provided to the legislature. If forms are not received or postmarked by June 1, the responsible govemment agency may not award business subsidies until a report has been filed. Please make copies of the enclosed form or download additional forms from DTED's website (.www.dted.state.mn.us, click on News and Information, then Business and Economic Development, then Business Subsidies). The web site also includes additional information related to the law including a fact sheet and answers to frequently asked questions. Please understand that it is the grantor's responsibility to report to DTED. We do not want to interfere with grantor/recipient relationships and expect that recipients will report directly io grantors, not to DTED. Legislative leaders agree with this approach and have introduced bills this session designed t° confirm this process. Kind regards, Bob Isaacson Director, Analysis and Evaluation Office ..... Trade & 7 Economic Development 2000 Minnesota Business Assistance Form The 2000 Minnesota Business Assistance Form (MBAF) is used to report each business subsidy and financial assistance agreements signed from August It 1999 through December 31, 1999 per Mum. Stat. ~ 116J.993 to §I 16J.995. Please use a separate form to report each agreement. The following government agencies must submit a 2000 MBAF even if an agreement was not signed during the period August 1, 1999 through December 31, 1999: 1) any local government/agency that s~gned a business subsidy agreement since January 1, 1995, or represents a population of more than 2,500; 2) all state government agencies. If the local/state government agency does not have any subsidies or assistance to report, please answer questions I through 13 and follow directions. Ifa local or state government agency that is required to report has not done so by April 1, DTED will mail a warning. If it fails to report by June 1, it may not award any business subsidies until a report has been (,led. · Questions? Call (651) 297-2335. Information on where to mail or fax your completed MBAF(sl in on page Section 1 Information About Grantor 1. Name of grantor (funding entity) 2. Name of person completing th~s form 3. Street address 4. City 5. ZIP code 6. County 7. Phone number 8. Fax number 9. E-mail address 10. Please indicate who in your organization should receive the 2001 MBAF if different from the person in Quesnon 2 Name/Title Phone number Street address City ZIP code I 1. Classification of grantor (Mark one. If grantor is enttty 12. Has your organization held a public hearing on and created by gov 't agency, please indicate affiliation. For adopted criteria for awarding business subsidies m example, a cto' EDA would check "City government. ") compliance with Minn. Stat. § 116J.9947 (Mark one ~ 'q City government 7~ Yes (lndtcate hearing date - ~ and artach crttcrta~ "q County government Cl No 7A Regional government CI We held a public hearing but have not yet adopted D State government criteria (Indicate date q£intttal hearmg - ~ D Other (Please specify.) 71 Other (Please attach explanation.) 13. Has your organization signed any agreements to award a business subsidy or financial assistance from Aueust l, 1999 through December 31, 1999 that is required to be reported under Minn. ~tat. §116J.993 and §116J.9947 ~Iark one ~ 7,J Yes (Complete the remainder of the £orm. ~ ~ No (Stop here, go to sectton 5 on page 4 1 Section 2 Information About Recipient 14. Name of business or organization [ 15. Address where business subsidy or financial ass~stancc rece,vmg subsidy or financial assistance [ will be used Street address City Z I P code 16. Does the recipient have a parent corporation7 (Mark one.) 71 Yes (Indicate name and address of parent corporation below. If more than one, indicate ultimate owner.) D No Name of parent corporation Street address City State ZIP code 2000 Minnesota Business Assistance Form Page I of 4 Department of Trade and Econormc Development 17. Industry ofrec~pient's facihty/Mark one.) ~ Manufacturing ~l Services D Retail Trade ~ Wholesale Trade ~ Finance, Insurance, Real Estate ~ Construcnon ~3 Other (please spec~:/.~ 18. Did the recipient relocate as a result of signing this agreement? (Mark one) ~ Yes (Indicate cay and state of previous address and reason recipient did not complete this protect at that address C] No (Go to Question 19) C~ty/State of previous address Reason prOJect not completed at previous address 19. Would the recipient have remained in previous Iocanon or relocated elsewhere if not awarded th~s business subsidy or financial assistance? (Mark one.) ~J Remmned at previous location r~ Relocated to different M)nnesota location ~3 Relocated outside M~nnesota Section 3 General Information About the Agreement 20. Total dollar value of business subsidy or financial assistance (Please separate by type - see Questions 24 and 2.5 - and indicate only prtnctPal amount for loans.) 21. Date agreement signed (In addition to the agreement date. indicate any dates the agreement was antended ) 22. Benefit date (Indicate the date the rectptent will benefit from the business subsidy or financial assistance. For example, indicate the date improvements were fintshed, equipment was placed into service, or the recipient occupied the property, whichever is earlier.) 23. Does the agreement provide a business subsidy or one of the four types of financial assistance (see Quesnon 25) reqmred to be reported? (Mark one.) ~1 business subsidy ~ financial assistance 24. If the agreement provided a business subsidy, please indicate the type(s). not applicable, agreement provided financial assistance loan grant (i.e., forgivable loan) tax abatement TIF or other tax reduction or deferral guarantee of payment contribution of property or infrastructure preferential use of governmental facilities land contribution other (Specify subsidy type.) 26. if the assistance included tax increment financing, please indicate the type of TlF district? (Mark one.) not applicable, assistance was not in the form of TIF 25. If the assistance was one of the four types of financml assistance, please indicate the type(s). not applicable, agreement provided a business subsidy redevelopment renewal and renovation soils condition economic development mined underground space hazardous substance subdistrict assistance for property polluted by contaminants assistance for renovating building stock or bnng~ng it up to code, when 50% or less of total cost assistance for pollution control or abatement assistance for a TIF soils condition district 27. Are any other grantors providing a business subsidy or financial assistance to the same project? (Mark one.) Yes (Specify each grantor and the value of their assistance below; attach an additional sheet tf necessar)' ) ~ No Grantor(s) and value of the agreement(s): Grantor Value ($) Grantor Value ($) 2000 Minnesota Business Assistance Form Page 2 of 4 Department of Trade and Economzc Development Section 4 Goals and Public Purpose Identified in the Agreement 28. Minn. Stat. §! 16J.994 requires that business subsidy and financial assistance agreements state a pubhc purpose. of the following public purposes were stated in the agreement? (Mark all that apply. ) ~] Enhancing economic diversity ~l lncrea.smg tax base (cannot be only purpose) O Creating high-quality job growth ~1 Other (please spec~9 ~1 Job retention l~l Other (please specify) ~ Stabilizing the community ~ Other (please spec~') Which 29. Indicate whether the agreement included the following types of goals, and whether the recipient had artmned those goals at the ttme of this report. (Fill in the boxes and attatnment date(s) for each goal.) A) Specific wage and job goals to be attained within 2 years B) Other job-creation and/or retennon goals C) Other wage goals D) Other goals other than wage and job goals Goals Target a~ta~nment All goals established? dates (month & year) attained" ~! Yes ~ No ~1 Yes ~.1 No ~Yes I-INo ~Yes _lNo ~Yes ~No :~Yes LINo OYes ONo OYes ~No (Please attach descrtpttons of goals and progress toward attainment iff'not documented tn Question 30.) 30. For each of the following wage categories, indicate the job creanon and/or retention goals stated in the agreement and the average hourly value of any employer-provided health insurance goals for those jobs. (Only indicate .lob creation goals tn full-time equtvalents t. f you are unable to separate goals by full- and part-ttme postttons ~ Full-time Part-time/ F'TE (only if goals not Hourly Wage Job Seasonal/Temp. stated as IrT/PT) Job liourl.s Value of (excluding benefits) Creation Job Creation Job Creation Retention ltealth Insurance no hourly wage-level goal less than $7.00 s $7.00 to $8.99 s $9.00 to $10.99 $ $11.00 to $12.99 s _ _ $13.00 to $14.99 $_ _ _ $15.00 and higher 31. For each of the following wage categories, Jnd~cale the number of actual jobs created and/or retained s~ncc thc bcnefil date and the actual hourly value of any employer-provided health insurance for those jobs. (Only indicate lob creation full-time equivalents if you are unable to separate.lob creation ~nto full- and part-trine postttons ~ Full-time Part-time/ FTE (only if unable to Hourly Wage Job Seasonal/Temp. separate IrT/PT) Job Hourly Value of (excluding benefits) Creation Job Creation Job Creation Retention Health insurance less than $7.00 $ $7.00 to $8.99 $ $900 to $10.99 $ $11.00 to $12.99 $ $13.00 to $14.99 $ $15.00 and higher $ 32. Has the recipient achieved all goals (see Questions 29, 30 and 31 ) and fulfilled all obhganons stipulated ~n the agreement'.' (Mark one.) Yes O No 2000 Minnesota Business Assistance Form Page 3 of 4 Department of Trade and kconormc l)eveh)prncn~ The following forms of financial assistance are not a business subsidy: (]) (2) a business subsidy of less than $25.000; assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; (3) public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; (4) redevelopment property polluted by contami- nants as defined in section 116J.552, subdivi- sion 3: (5) assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code. provided that the assistance is equal to or less than 50% of the total cost; assistance provided to organizations whose primary mission is to provide job readiness and training services if the sole purpose of the assistance is to provide those services: (7~ assistance for housing: (8 } asststance for pollution control or abatement: (9t assistance for energy conservation: I0) tax reductions resulting from conforrmtv wZth federal tax law; ll) workers' compensation and unemployment compensation; (12) benefits derived from regulation: Not all financial assistance is a business subsidy. More than one exception may apply to a project. ~ Use a conservative approach to deter- mining if the assistance is generally available. The term "defined group of businesses" is not defined. This definition may have implications for industrial parks, down- towns or other commercial areas. ~ Paragraphs 4, 5, and 17 exempt a variety of redevelopment projects. Paragraph 5 restricted to rehabilitation of existing structures. Total cost of renovation is not defined, creating flexibility in calculating the total cost and 50% threshold. Paragraphs 4, 5, 8, and 16 are sublect to reporting requirements and may require subsidy agreement even tinougn exempt from other subsidies regulahons (see 116.994, Subd. 8). 2000 Pubhcorp Tax Increment Semtnar- PaEe 3 Business Subd. 7. State Government Agency. "State government agency" means anY state agency that has the authority to award business subsidies. 116J.994- REGULATING LOCAL AND STATE BUSINESS SUBSIDIES Subd. 1. Public Purpose. A business subsidy must meet a public purpose other than increasing the tax base. Job retention may only be used as a public purpose in cases where' job loss is imminent and demonstrable. Subd. 2. Developing a Set of Criteria. A business subsidy may not be granted until thc grantor has adopted criteria after a public hearing for awarding business subsidies that comply with this section. The criteria must include a policy regarding the wages to be paid for the jobs created. The com- missioner of trade and economic development may assist local government agencies in developing crite- ria. What public purpose(s) is achieved by granting the subsidy? Simply increasing the tax base is not sufficient. Retention of existing jobs requires demonstration that loss is imminient. ~ A stated public purpose not related jobs may allow wage and job goals "zero". Criteria for business subsidies must be adopted before subsidies can be granted. Wage policy for job creation is the only specific statutory requirement for crite- ria. Criteria can provide means of clarifying application of the Statutes. A public hearing on the criteria is re- quired, but there are no stated requ~re- _ rnc, nts.for_Dubticatzon ...... ~. -- Every grantor must develoD and adopt criteria. The city cannot adoDt for all subordinate units. The c~ty and subordi- nate units should have idenhcat or compatible policies. 2000 Pul~hcorp Tax Increment Seminar - Page 5 Section 5 Recipients Failing to Fulfill Obligations 'Do not complete this section ~f, vou completed it on another 2000 MBAF submitted to DTED. ~ 33. During the period August I through December 31, 1999, did your orgamzatmn have any recipients who failed to report as required by Minn. Stat. § l 16J.993 and § I 16J.9947 (Mark one.) Yes (Indicate the name of each reciPient fading to report and the value of subsidy or financtal assistance awarded to that recipient ,4 tiao5 additional pages if necessao'.J ~ No Name of recipient Type of subsidy or assistance ~See Questions 24 and 25J Value of subsidy or assistance 34. Did your orgamzation have any recipients who failed to achieve any goals or fulfill any other obhgat~ons under an agreement signed on or after August I, 1999, that were required to be fulfilled by the time of th~s report? (Mark one ~ ~1 Yes (Complete the remainder of this section) ':l No (Stop here and submit form to DTED ~ 35. - 39. Provide the following information for each recipient failing to fulfill goals or any other terms of an agreement that were to be attained by the time of repomng (,4ttach addttionalpages ~fnecessary.) 35. Information on recipient and agreement: Name of recipient in default Type of subsidy or assistance lnmal value of subsidy or assistance Street address of recipient City/ZIP code of recipient Outstanding value of subsidy or assistance 36 Reason(s1 for default (Mark all that apply.): U recipient ceased operation D recipient relocated to a different commumty Li recipient was unable to fill vacant positions ~ other (Specify.' reasonj 37 To date, has the recipient fulfilled its repayment obhgatton? (Mark one.) ~ Yes ~ No. recipient has begun to repay the assistance. ~ No, recipient has not begun to repay the assistance. 38. Has the agreement been amended to extend the rec~p~ent's deadline for fulfilling its obligatmns? (Mark one.) D Yes D No 39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy: Return your completed MBAF(s) by/tpril 1~ 2000, to: 2000 Minnesota Business Assistance Form Minnesota Deparlxnent of Trad~ and Economic Development - AEO 500 Metro Square, 121 East 7~ Place St. Paul, MN 55101-2146 Or fax to: (651) 215-3841 2000 Mmnesota Business Assistance Form Page 4 of 4 Depanrnent of Trade and Economic Developmem Business Subsidies Minnesota Statutes, Section ! 16J.993 - 116J.995 The Business Subsidies Statutes (the "Statutes") have broad implications for the r~ladonship be- tween local government and business activity. The Statutes apply to more than the typical forms of local economic assistance. Al1 projects involving local funds and non-governmental activities should undergo a review in the planning process to determine the potential application of business subsidies. The left column contains the Statutes enacted in the 1999 Legislative Session. The right column contains comments that provide basic guidance on the application of the Statutes. The comments are for reference only. Application of the Statutes on projects should be done in conjunction with quali- fied legal assistance. STATUTE COMMENTS 116J.993 - Definitions Subd. 1. Scope. For the purposes of sections 116J.993 to I 16J.995, the terms defined in this section have the meanings given them. Subd. 2. Benefit Date. "Benefit date" means the date that the recipient receives the business subsidy. If the business subsidy involves the purchase, lease, or donation of physical equipment, then the benefit date begins when the recipient puts the equipment into service. If the business subsidy is for improvements to the properly, then the benefit date refers to the earliest date of either: The benefit date is important for wage and job goals, 5-year location commit- ment and duration of reporting. (1) (2) when the improvements are finished for the entire project; or when the business occupies the propen,v. If a business occupies the property and the subsidy grantor expects that other businesses will also occupy the same property, the grantor max' assign a separate benefit date for each busi- ness when it first occupies the property. The ability to assign separate benefit dates may help to meet goals for a project that consists of multiple phases. I 2000 PubhcorD Tax Increment Seminar - Page I (d) the state or local government agency and the recipient must both sign the subsidy agreement and. if the grantor is a local government agency, the agree- ment must be approved by the local elected governing body, except for the St. Paul Port Authority and a seaway port authority. $ubd. 4 Wage and .lob Goals. The subsidy agreement, in addition to any other goals, must include: (1) goals for the number of jobs created, which may include separate goals for the number of part-time and full-time jobs, or, in cases where job loss is imminent and demonstrable, goals for the number of jobs retained; and (2) wage goals for the jobs created or retained. In addition to other specific goal time frames, the wage and job goals must contain specific goals to be attained within two years of the benefit date. Subd. 5. Public Notice and Hearing. la} Before granting a business subsidy that ex- ceeds $500,000 for a state government grantor and $100,000 for a local government grantor, the grantor must provide public notice and a hearing on the subsidy. A public hearing and notice under the subdivision is not required if a hearing and notice on the subsidy is otherwise required by lay,'. {b) Public notice of a proposed business subsidy under this subdivision by a state government grantor must be published in the State Register. Pubhc not~cc of a proposed business subsidy under th~s subd~v~sion by a local government grantor must be published m a local newspaper of general circulation. The public notice must identify the location at whmh information about the business subsidy, including a copy of the subsidy agreement, is available. Pubhshed notme should be sufficiently conspicuous in sxze and place- ment to distinguish the notice from surroundm~ text. The grantor must make the information availab~le in printed paper copies and, if possible, on the Internet. All subsidy agreements must be ap- proved by the local ejected govermng body (i.e. - city council). Tl~e grantor has flexibility over specfic wage and job goals. Creating new jobs may not be required if the subsidy achieves another substantial public purpose. Net increase in jobs is not required by / the Statutes. A two year threshold is key for purposes of the agreement. The Statutes do not mention the retention of joDs after the two year period. Potential for multiple benefit dates may I helpt°achiev2the!°bg_°als' _ .. ~¢..~,.t A hearing required only if subsidy exceeds $100,000. Negotiations should be concluded before-I the hearing notice is published. Infor- [ mation about the subsidy and a copy of [ the agreement must be available after J publication of tine notice, zS~ Information about the subsidy and the hearing must be made available on tine Internet, if possible. | 2000 Pubhcorl:> Tax Increment Seminar. Page 7 Subd. 7. Reports by Recipients to Grantors. (a) A business subsidy grantor must monitor the pro~ess by the recipient in achieving a~eement goals. (b) A recipient must provide information regard- ing goals and results for two years after the benefit date or until the goals are met, whichever is later. If the goals are not met. the recipient must continue to provide information on the subsidy until the subsidy is repaid. The information must be filed on forms developed by the commissioner in cooperation with the representatives of local government. Copies of the completed forms must be sent to the commis- sioner and the local government agency that provided the business subsidy. The report must include: (1) the type, public purpose, and amount of subsidies and type cf district, if the subsidy is tax increment financing: (2) the hourly wage of each job created with separate bands of wages: (3) the sum of the hourly wages and cost of health insurance provided by the employer with the separate bands of wages; (4) the date the job and wage goals were reached; (5) a statement of goals identified in the subsidy agreement and an update on achievement of those goals: (6) the location of the recipient prior to receiving the subsidy: (7) why the recipient did not complete the project outlined in the subsidy agree- ment at the previous locanon, if the recipient was previously located at another site in Minnesota: Grantors need to consider how to "monitor progress" in achieving goals. DTED assumes that ~ will submit the forms in Subd. 7(b) DTED refers to the forms as the M~nnesota Business Assistance Form (MBAF). Copies of the MBAF can be obtained at the DTED website. ~ The recipient should be required to file report on DTED forms in the subsidy and/or development agreement as a means of enforcing compliance. ~ Describing this information in the agreement will facilitate tine preparation and filing of reports. 2000 PUOhcoto Tax Increment Seminar. Page 9 (d) If the recipient does not submit its report, the local government agency must mail the recipient a warning within one week of the required f'fling date. If, after 14 days of the postmarked date of the warn- ing, the recipient fails to provide a report, the recipi- ents must pay to the grantor a penalty of S100 for each subsequent day until the report is filed. The maximum penalty shall not exceed $1.000. Subd. 8. Reports by Grantors. (a) Local Government agencies of a local govern- ment with a population of more than 2,500 and state government agencies, regardless of whether or not they have awarded business subsidies, must file a report by April 1 of each year with the commissioner. Local government agencies of a local government with a population of 2.500 or less are exempt from filing this report if they have not awarded a business subsidy in the past five years. The local government agency must include a list of recipients that did not complete the report and of recipients that have not met theLrjob and wage goals within two years and steps being taken to bring them into compliance or to recoup the subsidy. The maximum fine for reporting failure by the recipient of is $1,000. Grantors may want to add ottaer consequences in subsidy and/or development agreement. ALL local government agencies (see 116J.993, Subd. 5) with a population of 2,500 or more must file a report with DTED by April 1 of each year. The reporting requirement is not depen- dent on the actual granting of business subsidies. ~ Grantor report includes: · list of recipients that did not com- plete reporting · list of recipients that have not met job and wage goals · steps being taken for compliance or subsidy recapture If the commissioner has not received the report by April I from an entity required to report, the commis- sioner shall issue a warning to the government agency. If the commissioner has still not received the report by June 1 of that same year from an entity required to report, then that government agency' may not award any business subsidies until the report has been filed. Failure to comply with the grantor reporting requirements results m loss o~ ability to grant subsidies until the reoorts are filed. lb) The commissioner of trade and economic development must provide informauon on reportm.,.: requirements to state and local government Subd. 9. Compilation and Summary Report. The department of trade and econom:c development must publish a compilation and summar~ of the results of the reports for the previous calendar year by July I of each year. The reports of the govemr~ent agencies to the department and the compilation and summary, report of the department must be made available to the public. 2000 Pul~hcorp Tax Increment Semtnar- Page 1 ] ~USIneS.~ ~'l, JDqlOle$ (10) number of pm-time and full-time jobs within separate bands of wages: and (11) benefits paid within separate bands of wages. 116J.995 - ECONOMIC GRANTS. An appropriate rider in an appropriation to the depart- ment of trade and economic development that speci- fies that the appropriation be granted to a particular business or class of businesses must contain a state- ment of the expected benefits associated with the grant. At a minimum, the statement must include goals for the number of jobs created, wages paid. and the tax revenue increase due to the grant. Repealer. Minnesota Statutes 1998. Section 116J.991, is repealed. Effective Date. Sections 1 to 4 are effective for business subsidies entered into or state appropriations authorized on or after August 1, 1999. The Business Subsidy Statutes replace the previous wage and job goal reclmre- merits. These requirements apply to all business subsidies "entered into" after August 1, 1999. The Statutes do not define what constitutes "entering into" a business subsidy. ~ 2000 PuOhcorp Tax Increment Seminar - Page