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