Economic Development and Job Creation Programs in Minnesota

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1 Economic and Job Creation s in Minnesota Updated: January 2015 Anita Neumann House Research Department Minnesota has a variety of programs designed to promote economic development and job creation throughout the state. The programs vary and include direct business subsidies in the form of grants and loans; the provision of information, advice, and technical assistance; state-sponsored marketing and promotion; and public funding of infrastructure development and redevelopment. The state also promotes economic development and job creation through its support of programs designed to educate and train its current and future workforce through higher education, workforce development programs, and through the unemployment insurance program. The following table titled Minnesota Economic and Job Creation s highlights and summarizes economic development and job-creation initiatives that exist in statute. The table does not include programs and services whose primary focus is education, unemployment insurance, or workforce training. The following are common abbreviations and acronyms used in the table: DOR MDA MNDOT PCA PFA U of M Department of Employment and Economic Department of Revenue Minnesota Department of Agriculture Minnesota Department of Transportation Pollution Control Agency Public Facilities Authority University of Minnesota

2 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Office Minnesota Green Enterprise Assistance Assistance Economic Response Team Microenterprise Entrepreneurial Assistance Biomedical Innovation and Commercialization Initiative (BICI) assistance and coordination of resources to encourage and assist business expansion. Services provided through: business development specialists; Positively Minnesota marketing initiative; manufacturers advocate; targeted assistance; provision of information and analysis as needed on business financing, site selection, and real estate. Multiagency project to advise, promote, market, and coordinate state agency collaboration on green enterprise and green economy projects to expedite grants, licenses, permits, and other state authorizations or approvals for projects. Facilitation of small business startup, resource coordination, and partnering; business licensing; Bureau of Small ; Bureau of Licenses; Small Center Services; and Small Assistance Office. Fast-action response team focused on businesses that are prospects for locating within the state or at risk for expanding or relocating outside of the state. Grants to nonprofit organizations to provide technical assistance to individuals to support the startup and expansion of microbusinesses and self-employment. Collaborative initiative between the state, the U of M, the medical technology industry, and investors to further development and commercialization of biomedical technology. BICI operates as a for-profit entity by its board of directors. Chapter 116J ( 116J.011, 116J.035, 116J.401) 116J.438 and Dept. of Commerce 116J J.86 and federal law 116J J J.885 Repealed 2014, U of M, and BICI Board of Directors 2

3 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Trade Promotion Invest Minnesota Minnesota STEP (State Trade and Export Promotion) Grants Board of Invention Explore Minnesota Tourism Promotion of trade and foreign investment in Minnesota. Includes promotional activities; trade missions; trade shows; trade delegations; technical assistance to businesses; promotion of state agricultural offerings, products, and services; and establishment of trade offices in foreign markets. State marketing initiative focused on branding state s economic development activities and promoting business opportunities in the state. Financial and technical assistance focused on small businesses with interest in exporting products or services to foreign markets. Grants to individuals, nonprofits, or private organizations to encourage invention of new processes, machines, manufacturing procedures or improvements, or applications of commercial invention or social inventions (procedures and organizations that change human relationship with environments). 116J.966 and 116J.978 and MDA on agricultural initiatives 116J J J J.990 Repealed 2014 Promotion of travel and tourism in Minnesota. Chapter 116U Governor appoints director 3

4 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Finance Agricultural and Economic 21 st Century Minerals Fund Credit for Historic Structure Rehabilitation Loans and loan guarantees to agricultural resource projects and other eligible small businesses; ethanol producer payments. Investment in specific projects related to minerals processing and state minerals industry. Fund operated as revolving account. IRRRB match for loans or equity investments in facilities in taconite tax relief area. Provides a refundable tax credit (or a grant in certain cases) for qualified rehabilitation expenditures on historic structures in conjunction with the credit available under the internal revenue code. Chapter 41A, MDA, PCA, MN Agricultural and Economic Board 116J and Section 47(a)(2) of the Internal Revenue Code DOR/IRS Tourism Loan Indian Loans Minnesota Investment Fund Loans, loan participation, or loan guarantees to resorts, campgrounds, lodging facilities, and other tourism-related businesses. Loans to support startups or expansions of Native American businesses; funded with 20 percent of severed mineral interest tax revenue deposited in special revenue fund account. Financing for infrastructure; loans; loan guarantees; interest rate buy-downs; grants; other forms of participation with private sources for financing; investments in renewable energy market development; training, technical assistance, and financial assistance under Small Cities Block Grant ; and disaster assistance. Repayments credited to revolving fund; grants generally limited to $1,000, J J J

5 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency SEED Capital Investment Credit Small Investment Tax Credit Qualified Expansions of Greater MN es Sales Tax Exemption Minnesota Job Creation Fund Capital Access Small Loan Guarantee Rural Rehabilitation Account certifies business in border cities as qualified to receive the SEED Capital Investment (tax) Credit; credits are limited to the amount allocated by the border city from its credit allocation. certifies a qualified small business; tax credits of up to 25 percent of an investment in a qualified business; available to investor or fund. This is set to expire after calendar year Sales tax exemption available to qualified businesses certified by the commissioner of. 116J.8732 and , subd. 35 and DOR 116J.8737 and DOR 116J.8738 and 297A.68, subd. 44. and DOR Capital investment rebates and cash awards for qualifying job creation and capital investment available to certified job creation fund businesses. Rebates and awards are available for five years for projects located in the metropolitan area and for seven years for projects located outside of the metropolitan area. 116J.8748 Capital for business development; focus on small- and mediumsized 116J J.8771 businesses; capital includes equity investments for community development venture capital funds or business loans. Capital available through a capital access account created in the special revenue fund. Loan guarantees of up to 70 percent of a loan amount made by a 116J.881 qualified economic development (QED) lender. Authorizes a loan guarantee trust fund account in the special revenue fund to pay for defaulted loan guarantees. Loans for rehabilitation in Greater Minnesota. 116J.955 5

6 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Military Reservist Economic Injury and Veteran- Owned Small Loans Onetime, interest-free loans up to $20,000 available to: business that has or is likely to sustain substantial economic injury resulting from a call to active service of an essential employee, or to a recently separated veteran (who served in active military service after ) to assist in starting a business. 116J.996 Urban Challenge Grants Enterprise Minnesota/Small Growth Acceleration (GAP) Film Production Jobs Assistance targeted to minority-owned businesses for job creation in low-income areas. Partnerships with nonprofits to provide technical and funding assistance. Financing, business development services, technology, technical assistance for innovation, and development of new products, services, and processes. Reimbursement for production costs of up to 25 percent for projects with a minimum expenditure of $1,000,000 or located outside of metropolitan area; up to 20 percent of costs for projects with less than $1,000,000 in expenditures within the metropolitan area. 116M.18 Chapter 116O 116O.115 (GAP) Enterprise Minnesota, Inc. 116U.26 Minnesota Film and TV Board and 6

7 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Community Finance Dairy Modernization Challenge Grant Greater MN Public Infrastructure Through Capital Projects Grant Funds available to regional or statewide development organizations (as defined under Minnesota Investment Fund program) for loans to dairy producers for acquisition, construction, or improvement of buildings or facilities; acquisition of equipment; dairy animal housing, confinement, animal feeding, milk production, and waste management if related to dairy animals. Applications for assistance made to county in which the dairy producer is located. Grants available to regional nonprofit organizations in six designated regions outside of the metropolitan area to encourage private investment, job creation and job enhancement, and the promotion of economic development in rural Minnesota. Statutory allocation from rural rehabilitation account; loans, loan guarantees, interest rate buy-downs, and other forms of participation with private sources through revolving funds established by regional organizations. Resources made available to local governments for infrastructure projects to promote and support economic development in Greater Minnesota. Eligible projects include manufacturing, technology, warehousing and distribution, research and development, agricultural processing, or industrial park development. Local match required. Account in Bond Proceeds Fund used for competitive grants to local governments. Eligible projects are capital projects for acquisition or improvement of publicly owned fixed assets with a useful life of at least 10 years for which general obligation bonds of the state may be issued. Grant funds may be used for eligible projects or public infrastructure required to support an eligible project. Match of nonstate resources required. 116J.407 and MDA 116J J J J.433 7

8 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Border to Border Broadband Grant Promotion of broadband expansion and access to underserved and unserved areas of the state. 116J J.396 Innovative Public Infrastructure Grant Transportation Economic Infrastructure Host Community Economic Grants Funding from the bond proceeds fund for competitive grants to local governments to acquire and prepare land on which public infrastructure that is required to support an eligible innovative business development project will be located. An innovative business is one using proprietary technology to add value to an output in a high-technology field; researching or developing a proprietary product, process, or service in a high-technology field; researching, developing, or producing a new proprietary technology for use in tourism, forestry, mining, transportation, or green manufacturing. Requires a local government match. Grants to local governments for predesign, design, acquisition of land, construction, reconstruction, and infrastructure improvements to promote economic development, increase employment, and improve transportation systems to accommodate private investment and job creation. Funds made available cannot be used on trunk highway improvement but may be used for nontrunk highway improvements in coordination with trunk highway improvement projects done by MNDOT. Grants to cities within the seven-county metropolitan area that are the site of a waste disposal facility accepting unprocessed mixed municipal solid waste. Grants may be used to finance the capital costs of development or redevelopment projects to create jobs, increase the city tax base, the city s capacity to attract private investment or other criteria developed by the commissioner of. 116J J.436 and MNDOT 116J.548 8

9 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Contamination Cleanup Grant and Minnesota Cleanup Revolving Loan Fund State and federal grant funding to local governments and private entities for contaminated site cleanup. 116J J.559 Redevelopment Grant and Loan Community Community Corporations Transit Improvement Area Loan Credit Enhanced Bond Resources available to local governments for site redevelopment. Resources available through bonding money and the general fund. Allocates state and federal money for community development, rehabilitation, housing, local infrastructure, and revitalization projects; provide technical assistance to rural communities; coordinate community assistance and development with regional development commissions; administer the Minnesota cleanup revolving loan fund. Financial and technical assistance to certified community development corporations for economic development projects including new businesses, business expansion, real estate development, infrastructure development, or housing activities associated with an economic development activity. Loans to eligible organizations for development of areas near transit facilities. Funding through special accounts in general fund and bond proceeds fund. Access to investment capital for community development with support of and PFA. 116J J J J A.087 PFA and 9

10 Economic and Job Creation s in Minnesota January 2015 Description Statutory Authority Agency Other Economic Provides a broad range of economic development authority, entities, and financing. Includes: housing and economic development authorities; port authorities; economic development authorities; area redevelopment; city development districts; mined underground space development; rural development financing authorities; municipal industrial development; border city enterprise zones; tax increment financing; miscellaneous items including foreign trade zones, special tax provisions for certain industries including agricultural processing facilities, businesses with disrupted access, neighborhood revitalization, and municipal commercial rehabilitation loans; targeted community revitalization; enterprise zones; JOBZ; transit improvement areas; and Destination Medical Center Chapter 469 Primarily local governments with, DOR, and MNDOT 10

11 Economic and Job Creation s in Minnesota January