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(a) 1. Scope. For the
purposes of sections 116J.993 to 116J.995, the terms defined in this
section have the meanings given them.
2.
"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 property, then the benefit date
refers to the earliest date of either:
(i) when
the improvements are finished for the entire
project; or
(ii)
when a business occupies the property. If a business
occupies the property and the subsidy grantor expects that other
businesses will also occupy the same property, the grantor may
assign a separate benefit date for each business when it first
occupies the property.
3. "Business subsidy" or "subsidy"
means a state or local government agency grant,
contribution of personal 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 guarantee of any payment
under any loan, lease, or other obligation, or any preferential
use of government facilities given to a business.
The
following forms of financial assistance are not a
business subsidy:
(1) a
business subsidy of less than $25,000;
(2)
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 contaminants as
defined in section Chapter 21E;
(5)
assistance provided for the sole purpose of renovating
old or decaying building stock or bringing it up to code and
assistance provided for designated historic preservation
districts, provided that the assistance is equal to or less than
50 percent of the total cost;
(6)
assistance to provide job readiness and training
services if the sole purpose of the assistance is to provide
those services;
(7)
assistance for housing;
(8)
assistance for pollution control or abatement,
including assistance for a tax increment financing hazardous
substance subdistrict as defined in this chapter;
(9)
assistance for energy conservation;
(10)
tax reductions resulting from conformity with federal
tax law;
(11)
workers' compensation and unemployment insurance;
(12)
benefits derived from regulation;
(13)
indirect benefits derived from assistance to
educational institutions;
(14)
funds from bonds allocated to development or redevelopment, bonds
issued to refund outstanding bonds, and bonds issued for the
benefit of an organization described in section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1999;
(15)
assistance for a collaboration between a Massachusetts
higher education institution and a business;
(16)
assistance for a tax increment financing soils
condition district;
(17)
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 market value;
(18)
general changes in tax increment financing law and
other general tax law changes of a principally technical nature;
(19)
federal assistance until the assistance has been
repaid to, and reinvested by, the state or local government
agency;
(20)
funds from dock and wharf bonds issued by Massachusetts
Port Authority;
(21)
business loans and loan guarantees of $75,000 or less;
and
(22)
federal loan funds provided through the United States
department of commerce, economic development administration.
4.
"Grantor" means any state or local
government agency with the authority to grant a business subsidy.
5.
"Local government agency" includes a statutory or home rule
charter city, housing
and redevelopment authority, town, county, port authority,
economic development authority, community development agency,
nonprofit entity created by a local government agency, or any
other entity created by or authorized by a local government with
authority to provide business subsidies.
6.
"Recipient" means any for-profit
or nonprofit business entity that receives a business subsidy.
Only nonprofit entities with at least 100 full-time equivalent
positions and with a ratio of highest to lowest paid employee,
that exceeds ten to one, determined on the basis of full-time
equivalent positions, are included in this definition.
6a.
"Residence" means the place where an individual has established
a permanent home from
which the individual has no present intention of moving.
7.
"State government
agency" means any state agency that has the authority to award
business subsidies.
(b)1. A business
subsidy must meet a public purpose which may include, but may not be
limited to, increasing the tax base. Job retention may only be
used as a public purpose in cases where job loss is specific and
demonstrable.
2. A business subsidy may not be granted until the
grantor has adopted
criteria after a public hearing for awarding business subsidies
that comply with this section. The criteria may not be adopted
on a case-by-case basis. The criteria must set specific minimum
requirements that recipients must meet in order to be eligible
to receive business subsidies. The criteria must include a
specific wage floor for the wages to be paid for the jobs
created. The wage floor may be stated as a specific dollar
amount or may be stated as a formula that will generate a
specific dollar amount. A grantor may deviate from its criteria
by documenting in writing the reason for the deviation and
attaching a copy of the document to its next annual report to
the department. The commissioner of employment and economic
development may assist local government agencies in developing
criteria. A copy of the criteria must be submitted to the
department of housing and economic development along with the
first annual report following the enactment of this section or
with the first annual report after it has adopted criteria,
whichever is earlier.
3.
(a) A recipient must enter into a subsidy agreement with the grantor
of the subsidy
that includes:
(i) a
description of the subsidy, including the amount and
type of subsidy, and type of district if the subsidy is tax
increment financing;
(ii)
a statement of the public purposes for the subsidy;
(ii)
measurable, specific, and tangible goals for the
subsidy;
(iv)
a description of the financial obligation of the
recipient if the goals are not met;
(v) a
statement of why the subsidy is needed;
(vi)
a commitment to continue operations in the jurisdiction
where the subsidy is used for at least 5 years after the
benefit date;
(vii)
the name and address of the parent corporation of the
recipient, if any; and
(viii)
a list of all financial assistance by all grantors for
the project.
(b)
Business subsidies in the form of grants must be
structured as forgivable loans. For other types of business
subsidies, the agreement must state the fair market value of the
subsidy to the recipient, including the value of conveying
property at less than a fair market price, or other in-kind
benefits to the recipient.
(c)
If a business subsidy benefits more than one recipient,
the grantor must assign a proportion of the business subsidy to
each recipient that signs a subsidy agreement. The proportion
assessed to each recipient must reflect a reasonable estimate of
the recipient's share of the total benefits of the project.
(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 agreement must be approved by the
local elected governing body.
(e)
Notwithstanding the provision in paragraph (a), clause
(6), a recipient may be authorized to move from the jurisdiction
where the subsidy is used within the 5 year period after the
benefit date if, after a public hearing, the grantor approves
the recipient's request to move. For the purpose of this
paragraph, if the grantor is a state government.
4 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 or full-time jobs, or, in cases where job
loss is specific and demonstrable, goals for the number of jobs
retained; (2) wage goals for any jobs created or retained; and
(3) wage goals for any jobs to be enhanced through increased
wages. After a public hearing, if the creation or retention of
jobs is determined not to be a goal, the wage and job goals may
be set at zero.
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.
5.
(a) Before granting a business subsidy that exceeds $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 this subdivision is
not required if a hearing and notice on the subsidy is otherwise
required by law.
(b)
Public notice of a proposed business subsidy under this
subdivision by a state government grantor, must be published in
the state register. Public notice of a proposed business
subsidy under this subdivision by a local government grantor must be
published in a local newspaper of general circulation. The
public notice must identify the location at which information
about the business subsidy, including a summary of the terms of
the subsidy, is available. Published notice should be
sufficiently conspicuous in size and placement to distinguish
the notice from the surrounding text. The grantor must make the
information available in printed paper copies and, if possible,
on the Internet. The government agency must provide at least a
10 day notice for the public hearing.
(c)
The public notice must include the date, time, and
place of the hearing.
(d)
If more than one non-public grantor provides a business
subsidy to the same recipient, the non-public grantors may
designate one non-public grantor to hold a single public hearing
regarding the business subsidies provided by all non-public
grantors.
6.
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 general fund or municipal
treasurer
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 agreement. 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.
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 5 years from the date of failure or until a
recipient satisfies its repayment obligation under this
subdivision, whichever occurs first.
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.
7. Reports by recipients to grantors. (a) A
business subsidy grantor must monitor the progress by the
recipient in achieving agreement goals.
(b) A
recipient must provide information regarding goals
and results for 2 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
representatives of local government. Copies of the completed
forms must be sent to the local government agency that provided
the subsidy or to the commissioner if the grantor is a state
agency. The report must include:
(1)
the type, public purpose, and amount of subsidies and
type of 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 separate bands of wages;
(4)
the date the job and wage goals will be 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
business subsidy;
(7)
why the recipient did not complete the project outlined
in the subsidy agreement at their previous location, if the
recipient was previously located at another site in Minnesota;
(8)
the name and address of the parent corporation of the
recipient, if any;
(9) a
list of all financial assistance by all grantors for
the project; and
(10)
other information the commissioner may request.
A report must be
filed no later than March 1 of each year for
the previous year. The local agency must forward copies of the
reports received by recipients to the commissioner by April 1.
(c)
Financial assistance that is excluded from the
definition of "business subsidy" contained herein is
subject to
the reporting requirements of this subdivision, except that the
report of the recipient must include instead:
(1)
the type, public purpose, and amount of the financial
assistance, and type of district if the assistance is tax
increment financing;
(2)
progress towards meeting goals stated in the assistance
agreement and the public purpose of the assistance;
(3)
if the agreement includes job creation, the hourly wage
of each job created with separate bands of wages;
(4)
if the agreement includes job creation, the sum of the
hourly wages and cost of health insurance provided by the
employer with separate bands of wages;
(5)
the location of the recipient prior to receiving the
assistance; and
(6)
other information the grantor requests.
(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 filing date. If, after 14 days of the
postmarked date of the warning, the recipient fails to provide a
report, the recipient must pay to the grantor a penalty of $100
for each subsequent day until the report is filed. The maximum
penalty shall not exceed $1,000.
8.
(a) Local government agencies of a local government with a population
of more than
2,500 and state government agencies, regardless of whether or
not they have awarded any 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 5 years. The report must
include a list of recipients that did not complete the recipient
report required under subdivision 7 and a list of recipients
that have not met their job and wage goals within 2 years and
the steps being taken to bring them into compliance or to recoup
the subsidy.
If
the commissioner has not received the report by April 1
from an entity required to report, the commissioner 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.
(b)
The commissioner of employment and economic development
must provide information on reporting requirements to state and
local government agencies.
9. Compilation and summary report. The department
of housing and
economic development
must publish a compilation and summary of the results
of the reports for the previous
2 calendar years by December 1 of 2010 and every
other year thereafter. The reports of the government agencies
to the department and the compilation and summary report of the
department must be made available to the public.
The
commissioner must coordinate the production of reports
so that useful comparisons across time periods and across
grantors can be made. The commissioner may add other
information to the report as the commissioner deems necessary to
evaluate business subsidies. Among the information in the
summary and compilation report, the commissioner must include:
(1)
total amount of subsidies awarded in each development
region of the state;
(2)
distribution of business subsidy amounts by size of the
business subsidy;
(3)
distribution of business subsidy amounts by time
category;
(4)
distribution of subsidies by type and by public
purpose;
(5)
percent of all business subsidies that reached their
goals;
(6)
percent of business subsidies that did not reach their
goals by 2 years from the benefit date;
(7)
total dollar amount of business subsidies that did not
meet their goals after 2 years from the benefit date;
(8)
percent of subsidies that did not meet their goals and
that did not receive repayment;
(9)
list of recipients that have failed to meet the terms
of a subsidy agreement in the past 5 years and have not
satisfied their repayment obligations;
(10)
number of part-time and full-time jobs within separate
bands of wages; and
(11)
benefits paid within separate bands of wages.
10. The
department of housing and economic development
must publish a
compilation of granting agencies' criteria policies
adopted in the previous
2 calendar years by December 1 of 2010
and every other year
thereafter.
(c) An appropriation
rider in an appropriation to the
department of housing and economic development that specifies
that the appropriation be granted to a particular business or
class of businesses must contain a statement of the expected
benefits associated with the grant. At a minimum, the statement
must include goals for the number of jobs created or enhanced,
wages paid, and the tax revenue increases due to the grant. The
wage and job goals must contain specific goals to be attained
within 2 years of the benefit date. The statement must
specify the recipient's obligation if the recipient does not
attain the goals. At a minimum, the statement must require a
recipient failing to meet the job and wage goals to pay back the
assistance plus interest to the department of housing and
economic development provided that repayment may be prorated to
reflect partial fulfillment of goals. The legislature, after a
public hearing, may extend for up to 1 year the period for
meeting the goals provided in the statement.
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