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SF 18

as introduced - 91st Legislature, 2020 2nd Special Session (2020 - 2020) Posted on 07/14/2020 07:52am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to economic development; providing for exceptions to certain economic
development grant programs during a peacetime emergency; amending Minnesota
Statutes 2018, sections 116J.8748, subdivision 3; 116J.994, subdivision 6.


Section 1.

Minnesota Statutes 2018, section 116J.8748, subdivision 3, is amended to read:

Subd. 3.

Minnesota job creation fund business designation; requirements.

(a) To
receive designation as a Minnesota job creation fund business, a business must satisfy all
of the following conditions:

(1) the business is or will be engaged in, within Minnesota, one of the following as its
primary business activity:

(i) manufacturing;

(ii) warehousing;

(iii) distribution;

(iv) information technology;

(v) finance;

(vi) insurance; or

(vii) professional or technical services;

(2) the business must not be primarily engaged in lobbying; gambling; entertainment;
professional sports; political consulting; leisure; hospitality; or professional services provided
by attorneys, accountants, business consultants, physicians, or health care consultants, or
primarily engaged in making retail sales to purchasers who are physically present at the
business's location;

(3) the business must enter into a binding construction and job creation business subsidy
agreement with the commissioner to expend directly, or ensure expenditure by or in
partnership with a third party constructing or managing the project, at least $500,000 in
capital investment in a capital investment project that includes a new, expanded, or remodeled
facility within one year following designation as a Minnesota job creation fund business or
$250,000 if the project is located outside the metropolitan area as defined in section 200.02,
subdivision 24, or if 51 percent of the business is cumulatively owned by minorities, veterans,
women, or persons with a disability; and:

(i) create at least ten new full-time employee positions within two years of the benefit
date following the designation as a Minnesota job creation fund business or five new full-time
employee positions within two years of the benefit date if the project is located outside the
metropolitan area as defined in section 200.02, subdivision 24, or if 51 percent of the business
is cumulatively owned by minorities, veterans, women, or persons with a disability; or

(ii) expend at least $25,000,000, which may include the installation and purchase of
machinery and equipment, in capital investment and retain at least 200 employees for projects
located in the metropolitan area as defined in section 200.02, subdivision 24, and 75
employees for projects located outside the metropolitan area;

(4) positions or employees moved or relocated from another Minnesota location of the
Minnesota job creation fund business must not be included in any calculation or determination
of job creation or new positions under this paragraph; and

(5) a Minnesota job creation fund business must not terminate, lay off, or reduce the
working hours of an employee for the purpose of hiring an individual to satisfy job creation
goals under this subdivision.

new text begin With the commissioner's authorization, the one-year period requirement to meet minimum
capital investment requirements under clause (3) and the minimum job creation requirements
in clause (3), item (i), may be extended for up to 12 months for projects that must meet
these requirements within 12 months of the governor's declaration of a peacetime emergency.
new text end

(b) Prior to approving the proposed designation of a business under this subdivision, the
commissioner shall consider the following:

(1) the economic outlook of the industry in which the business engages;

(2) the projected sales of the business that will be generated from outside the state of

(3) how the business will build on existing regional, national, and international strengths
to diversify the state's economy;

(4) whether the business activity would occur without financial assistance;

(5) whether the business is unable to expand at an existing Minnesota operation due to
facility or land limitations;

(6) whether the business has viable location options outside Minnesota;

(7) the effect of financial assistance on industry competitors in Minnesota;

(8) financial contributions to the project made by local governments; and

(9) any other criteria the commissioner deems necessary.

(c) Upon receiving notification of local approval under subdivision 2, the commissioner
shall review the determination by the local government and consider the conditions listed
in paragraphs (a) and (b) to determine whether it is in the best interests of the state and local
area to designate a business as a Minnesota job creation fund business.

(d) If the commissioner designates a business as a Minnesota job creation fund business,
the business subsidy agreement shall include the performance outcome commitments and
the expected financial value of any Minnesota job creation fund benefits.

(e) The commissioner may amend an agreement once, upon request of a local government
on behalf of a business, only if the performance is expected to exceed thresholds stated in
the original agreement.

(f) A business may apply to be designated as a Minnesota job creation fund business at
the same location more than once only if all goals under a previous Minnesota job creation
fund agreement have been met and the agreement is completed.

Sec. 2.

Minnesota Statutes 2018, section 116J.994, subdivision 6, is amended to read:

Subd. 6.

Failure to meet goals.

(a) The subsidy agreement must specify the recipient's
obligation if the recipient does not fulfill the agreement. At a minimum, the agreement must
require a recipient failing to meet subsidy agreement goals to pay back the assistance plus
interest to the grantor or, at the grantor's option, to the account created under section 116J.551
provided that repayment may be prorated to reflect partial fulfillment of goals. The interest
rate must be set at no less than the implicit price deflator for government consumption
expenditures and gross investment for state and local governments prepared by the Bureau
of Economic Analysis of the United States Department of Commerce for the 12-month
period ending March 31 of the previous year. The grantor, after a public hearing, may extend
for up to one year the period for meeting the wage and job goals under subdivision 4 provided
in a subsidy agreementnew text begin or up to two years if the governor has declared a peacetime emergency
during the initial two-year compliance period
new text end. A grantor may extend the period for meeting
other goals under subdivision 3, paragraph (a), clause (3), by documenting in writing the
reason for the extension and attaching a copy of the document to its next annual report to
the department.

(b) A recipient that fails to meet the terms of a subsidy agreement may not receive a
business subsidy from any grantor for a period of five years from the date of failure or until
a recipient satisfies its repayment obligation under this subdivision, whichever occurs first.

(c) Before a grantor signs a business subsidy agreement, the grantor must check with
the compilation and summary report required by this section to determine if the recipient
is eligible to receive a business subsidy.

Sec. 3. new text beginGRANT EXCEPTIONS.
new text end

new text begin Notwithstanding Minnesota Statutes, sections 116J.8731, subdivision 5, and 116J.8748,
subdivision 4, the commissioner may approve a Minnesota investment fund grant or job
creation fund grant of up to $2,000,000 for qualified applicants. This section expires July
1, 2021.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end