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3. Presentation Goals Overview of Law
Definition of criteria
Operating requirements
Results
JOBZ reporting requirements Describe what you’re going to accomplish in the presentation
Briefly describe how the business subsidy law relates to JOBZDescribe what you’re going to accomplish in the presentation
Briefly describe how the business subsidy law relates to JOBZ
4. What Is the Business Subsidy Law? Overview The business subsidy law M.S. §116J.993 through §116J.995 outlines the operating and reporting requirements for awarding business subsidies in Minnesota.
Under the JOBZ law M.S. §469.320 a subzone administrator must comply with the reporting and operating requirements under M.S. §116J.993 through §116J.995.
5. What Is the Business Subsidy Law? Definition Tax exemptions or tax credits and local sales tax available to a qualified business located in a job zone;
State and local government agency grants;
Contributions of personal property, real property, or infrastructure;
Loans at rates less than commercially available;
Tax/fee reductions or deferrals including tax increment financing (TIF);
Guarantees of payments; and
Preferential use of government facilities. Focus on JOBZ – tax exemptions or tax credits in the context of the business subsidy law.Focus on JOBZ – tax exemptions or tax credits in the context of the business subsidy law.
6. What Is the Business Subsidy Law? Entities Subject to the Law Grantor or subzone administrator:
The legal representative designated by the local government unit to administer a subzone; and
Any state or local government agency with the authority to grant a business subsidy.
7. What is the Business Subsidy Law? Entities Subject to the Law Recipients or Qualified Businesses:
A for-profit business; and or
A person that carries on a trade or business at a place of business located with in a Job Opportunity Zone (JOBZ).
8. Criteria Definition Uniform standards or guidelines by which a grantor and or subzone administrator bases its decision to award any business subsidy.
9. Operating Requirements Grantors and or subzone administrators may not provide business subsidies until they have:
Held a public hearing on criteria:
Criteria must include a specific wage floor for wages paid and jobs created.
The wage floor may be stated as a specific amount or may be stated as a specific formula that will generate a specific dollar amount. i.e. 140% Federal Poverty Rate for a family of four as of March 2004 is $12.39 including wages and benefitsi.e. 140% Federal Poverty Rate for a family of four as of March 2004 is $12.39 including wages and benefits
10. Operating Requirements A grantor or subzone administrator may deviate from the criteria only in writing and provide a copy to DEED.
A copy of the criteria must be submitted to DEED with the first annual report. Note: JOBZ , business subsidy reports and criteria policies from grantors and or subzone administrators are due April 1, 2005.
Grantors and or subzone administrators will be able to submit report forms electronically on DEED’s website.Note: JOBZ , business subsidy reports and criteria policies from grantors and or subzone administrators are due April 1, 2005.
Grantors and or subzone administrators will be able to submit report forms electronically on DEED’s website.
11. Results – Specific Wage Floor A significant number grantors submitted criteria policies prior to the changes made in the 2000 legislative session.
Grantors must amend their criteria policies to include a specific wage floor for wages to be paid and jobs created.
12. Results – Specific Wage Floor Of the 260 criteria policies submitted by grantors from 2000 to 2004 currently in place, 136 policies have a specific wage floor from $5.15 to $19.30.
13. Results – Specific Wage Floor For criteria policies currently in place, the specific wage floor distribution is as follows:
A significant number of policies have a specific wage floor of at least $9.00 to $10.99 per hour.For criteria policies currently in place, the specific wage floor distribution is as follows:
A significant number of policies have a specific wage floor of at least $9.00 to $10.99 per hour.
14. Results – Wages and Health Benefits Of the 136 criteria policies that had a specific wage floor, 43 policies (31.6%) either indicated that wages included or excluded health benefits. There were 93 policies (68.4%) where health benefits were not indicated.Of the 136 criteria policies that had a specific wage floor, 43 policies (31.6%) either indicated that wages included or excluded health benefits. There were 93 policies (68.4%) where health benefits were not indicated.
15. Results - Job Creation Goals One job per $ of subsidy Of the 16 policies that indicated job creation goals, 14 policies (87.5%) required that businesses provide at least one job per $25,000 to $49,999 of the subsidy amount granted. Of the 16 policies that indicated job creation goals, 14 policies (87.5%) required that businesses provide at least one job per $25,000 to $49,999 of the subsidy amount granted.
16. Results – Job Creation Goals and Other Provisions One policy has a job creation goal of 60% new jobs created to be held by city residents.
One policy requires businesses with at least 100 FTE’s to spend 5% of the loan amount on training programs and to encourage housing. Businesses with at least 75 FTE’s to offer a health plan.
Other provisions submitted by grantors include a job creation goal of 60% new jobs created to be held by city residents. While another policy requires businesses with at least 100 FTE’s to spend 5% of the loan amount on training and to encourage housing. Businesses of at least 75 FTE’s to offer a health plan. Other provisions submitted by grantors include a job creation goal of 60% new jobs created to be held by city residents. While another policy requires businesses with at least 100 FTE’s to spend 5% of the loan amount on training and to encourage housing. Businesses of at least 75 FTE’s to offer a health plan.
17. Results – Capital Investment One criteria policy requires a capital investment of at least $500,000 for inclusion into JOBZ program.
One criteria policy requires an investment of at least $100,000 for a new business and $50,000 for a existing business. As for capital investment, DEED expects to see increased activity in this area when JOBZ reports are submitted by grantors or subzone administrators because of the relocation agreement requirements in the JOBZ program - a qualified business making a capital investment of 10% of the gross revenues of operation that was relocated or increase full time employment by 20% in the first year of operations.As for capital investment, DEED expects to see increased activity in this area when JOBZ reports are submitted by grantors or subzone administrators because of the relocation agreement requirements in the JOBZ program - a qualified business making a capital investment of 10% of the gross revenues of operation that was relocated or increase full time employment by 20% in the first year of operations.
18. JOBZ Reporting Requirements Reports from Grantors to DEED Each year subzone administrators must file a Minnesota Business Assistance Form (MBAF) with DEED for each JOBZ business subsidy agreement.
Report annually after the approval date for the duration of the zone term.
Report at a minimum, information the law requires recipients or qualified businesses to report to grantors or subzone administrators.
The MBAF is on DEED’s website and each year’s reports are due April 1, 2005 from grantors.
19. In Conclusion Criteria development is a fundamental first step toward accountability and for evaluating the success of the JOBZ program. Prior to the 2000 Legislative session changes in the business subsidy law, there were no specific wage or job creation goals required in the criteria policies submitted by grantors or public notice and hearing requirements i.e., granting a business subsidy that exceeds $100,000 or repayment provisions.
Prior to the 2000 Legislative session changes in the business subsidy law, there were no specific wage or job creation goals required in the criteria policies submitted by grantors or public notice and hearing requirements i.e., granting a business subsidy that exceeds $100,000 or repayment provisions.
20. Give them a way to contact you if they have questions or need additional informationGive them a way to contact you if they have questions or need additional information
