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Economic Development Legislation
Legislature Increases Funding for Economic Development Programs
Governor Dayton recently signed into law approximately $100 million in economic development programs that were funded in the 2014-2015 biennial budget approved by the Minnesota Legislature. The package includes loan and grant programs and tax incentives that new and existing businesses in Minnesota can access to create jobs and spur capital investment. The state expects these programs to create between 12,500 and 15,000 new jobs in the state. A brief outline of selected economic development programs funded by the legislature with links to more detailed information is below. Don’t hesitate to contact GMG staff if you would like further information about any of these programs.
- Minnesota Investment Fund – $30 million – Allows businesses seeking to expand or locate in Minnesota to apply with a local unit of government for grants and loans to support their project. All projects must meet minimum criteria for private investment, number of jobs created or retained and wages paid. There is a maximum of $500,000 per project.
- Minnesota Job Creation Fund – $24 million – New program that provides up to $1 million in targeted incentives, awarded on a project-by-project basis, to businesses that expand or locate in Minnesota and meet certain job creation and investment criteria. Provisions were included to provide a greater benefit to Greater Minnesota including: eligibility for 7 years of benefits vs. 5 years for the Minneapolis-St. Paul metro, rebates for capital investment available up to 7.5% of cost vs. 5% in the Minneapolis-St. Paul metro, capital investment rebates available for retaining 75 employees vs. 200 in the Minneapolis/St. Paul metro if $25 million capital investment made.
- Greater Minnesota Business Expansion Exemption – $14 million – New program that provides a sales tax exemption for purchases of tangible personal property and taxable services purchased by a qualified business as part of a business expansion.
- Minnesota Job Skills Partnership – $8.39 million – Provides for the development of customized training for companies that want to upgrade the skills of their workers.
- Redevelopment Grant Program - $6 million – Helps communities with the costs of redeveloping blighted industrial, residential or commercial sites and putting land back into productive use. 50% of this fund is set aside for Greater Minnesota projects.
- Greater Minnesota Internship Program – $4 million – New program that allows Greater Minnesota businesses that provides an internship to a Minnesota post-secondary student (both public and private institutions) to receive 40% of the intern’s salary, up to $2,000 per intern, in the form of a tax credit.
- Transportation Economic Development Program – $20 million – A collaborative effort among state agencies that funds highway infrastructure improvements that encourage economic development.
- Minnesota Capital Equipment Exemption – Businesses that buy or lease capital equipment for use in Minnesota can claim a refund of sales or use tax they paid on qualifying purchases. A new law allows for an upfront sales tax exemption for capital equipment purchases effective August 31, 2014, rather than a refund.
* Funding amounts are for 2014-2015 biennium