Subdivision 1. Scope.
For purposes of sections
, the following terms
have the meanings given.
Subd. 2. Agricultural processing facility.
"Agricultural processing facility" means one or
more facilities or operations that transform, package, sort, or grade livestock or livestock products,
agricultural commodities, or plants or plant products into goods that are used for intermediate or
final consumption including goods for nonfood use, and surrounding property.
Subd. 3. Applicant.
"Applicant" means a local government unit or units applying for
designation of an area as a job opportunity building zone or a joint powers board, established
, acting on behalf of two or more local government units.
Subd. 4. Commissioner.
"Commissioner" means the commissioner of employment and
Subd. 5. Development plan.
"Development plan" means a plan meeting the requirements
Subd. 6. Job opportunity building zone or zone.
"Job opportunity building zone" or
"zone" means a zone designated by the commissioner under section
, and includes an
agricultural processing facility zone.
Subd. 7. Job opportunity building zone percentage or zone percentage.
building zone percentage" or "zone percentage" means the following fraction reduced to a
(1) the numerator of the fraction is:
(i) the ratio of the taxpayer's property factor under section
located in the zone for the
taxable year over the property factor numerator determined under section
(ii) the ratio of the taxpayer's job opportunity building zone payroll factor under subdivision
8 over the payroll factor numerator determined under section
(2) the denominator of the fraction is two.
When calculating the zone percentage for a business that is part of a unitary business as
defined under section
290.17, subdivision 4
, the denominator of the payroll and property factors is
the Minnesota payroll and property of the unitary business as reported on the combined report
290.17, subdivision 4
, paragraph (j).
Subd. 8. Job opportunity building zone payroll factor.
"Job opportunity building zone
payroll factor" or "job opportunity building zone payroll" is that portion of the payroll factor
(1) wages or salaries paid to an individual for services performed in a job opportunity
building zone; or
(2) wages or salaries paid to individuals working from offices within a job opportunity
building zone if their employment requires them to work outside the zone and the work is
incidental to the work performed by the individual within the zone.
Subd. 9. Local government unit.
"Local government unit" means a statutory or home rule
charter city, county, town, Iron Range resources and rehabilitation agency, regional development
commission, or a federally designated economic development district.
Subd. 10. Person.
"Person" includes an individual, corporation, partnership, limited liability
company, association, or any other entity.
Subd. 11. Qualified business.
(a) A person carrying on a trade or business at a place of
business located within a job opportunity building zone is a qualified business for the purposes of
according to the criteria in paragraphs (b) to (f).
(b) A person is a qualified business only on those parcels of land for which the person has
entered into a business subsidy agreement, as required under section
, with the appropriate
local government unit in which the parcels are located.
(c) Prior to execution of the business subsidy agreement, the local government unit must
consider the following factors:
(1) how wages compare to the regional industry average;
(2) the number of jobs that will be provided relative to overall employment in the community;
(3) the economic outlook for the industry the business will engage in;
(4) sales that will be generated from outside the state of Minnesota;
(5) how the business will build on existing regional strengths or diversify the regional
(6) how the business will increase capital investment in the zone; and
(7) any other criteria the commissioner deems necessary.
(d) A person that relocates a trade or business from outside a job opportunity building
zone into a zone is not a qualified business unless the business meets all of the requirements of
paragraphs (b) and (c) and:
(1) increases full-time employment in the first full year of operation within the job
opportunity building zone by a minimum of five jobs or 20 percent, whichever is greater,
measured relative to the operations that were relocated and maintains the required level of
employment for each year the zone designation applies; and
(2) enters a binding written agreement with the commissioner that:
(i) pledges the business will meet the requirements of clause (1);
(ii) provides for repayment of all tax benefits enumerated under section
business under the procedures in section
, if the requirements of clause (1) are not met for
the taxable year or for taxes payable during the year in which the requirements were not met; and
(iii) contains any other terms the commissioner determines appropriate.
(e) The commissioner may waive the requirements under paragraph (d), clause (1), if the
commissioner determines that the qualified business will substantially achieve the factors under
(f) A business is not a qualified business if, at its location or locations in the zone, the
business is primarily engaged in making retail sales to purchasers who are physically present at
the business's zone location.
(g) A qualifying business must pay each employee compensation, including benefits not
mandated by law, that on an annualized basis is equal to at least 110 percent of the federal poverty
level for a family of four.
(h) A public utility, as defined in section
, is not a qualified business.
Subd. 12. Relocates.
(a) "Relocates" means that the trade or business:
(1) ceases one or more operations or functions at another location in Minnesota and begins
performing substantially the same operations or functions at a location in a job opportunity
building zone; or
(2) reduces employment at another location in Minnesota during a period starting one year
before and ending one year after it begins operations in a job opportunity building zone and its
employees in the job opportunity building zone are engaged in the same line of business as the
employees at the location where it reduced employment.
(b) "Relocate" does not include an expansion by a business that establishes a new facility
that does not replace or supplant an existing operation or employment, in whole or in part.
(c) "Trade or business" includes any business entity that is substantially similar in operation
or ownership to the business entity seeking to be a qualified business under this section.
Subd. 13. Relocation payroll percentage.
"Relocation payroll percentage" is a fraction, the
numerator of which is the zone payroll of the business for the tax year minus the payroll from the
relocated operations in the last full year of operations prior to the relocation, and the denominator
of which is the zone payroll of the business for the tax year. The relocation payroll percentage
of a business that is not a relocating business is 100 percent.
History: 1Sp2003 c 4 s 1; 1Sp2003 c 21 art 1 s 15; 2005 c 69 art 1 s 21; 1Sp2005 c 1 art
4 s 107; 1Sp2005 c 3 art 7 s 12,13