Farmland gets state incentives it wants

Published 12:00 am Wednesday, May 15, 2002

Key Farmland remedies that could help make a new Albert Lea plant possible survived in a last-minute agreement between legislative negotiators late Tuesday.

The budget-balancing bill includes the designation of a Tax Increment Financing (TIF) district that would cover the old and new plant sites, and a sales-tax exemption for the construction. Farmland has said both of those measures are necessary before it can rebuild its burned processing plant.

An extended unemployment benefit for the displaced workers was also included in the economic development bill.

Email newsletter signup

The negotiations at the capitol between the House and Senate took until 9 p.m. to hammer out a compromise, just before

the deadline for passing bills that the legislature can enact even if Gov. Jesse Ventura vetoes them. If Ventura waits until the last minute to veto the bill, lawmakers can still meet Sunday to override the veto.

“On balance, I think it’s a very good year, given the difficult budget problem,” Rep. Dan Dorman, R-Albert Lea said.

According to Dorman, the House-Senate committee is still working on a provision that would fund the Albert Lea schools to make up for a drop in enrollment due to the Farmland fire.

The TIF designation is an essential condition to realize an incentive package the City of Albert Lea offered to Farmland.

It will allow the city to capture all the increased tax revenue from the new plant in the industrial park near Interstate 35 over the next 10 years, which will generate about $2 million. The city can use that money toward the $5 million cleanup project of the old plant destroyed in the July fire.

The sales-tax exemption will waive the 6.5 percent state sales and use tax applied to construction materials, supplies and non-production equipment for the proposed new plant, which will cost more than $80 million. The Minnesota Department of Revenue estimates the company would save about $1.5 million through this measure.

An existing law already exempts taxes to be paid on production machinery and equipment that qualifies for the capital equipment sales-tax exemption.

For those workers still waiting for a new plant to open, a maximum 26-week extra unemployment benefit will be appropriated. Applicants qualify if they enroll in a qualifying reemployment assistance program, or are scheduled to enroll in the future. Those who have been reemployed after their layoff from Farmland and qualify for a new regular benefit account are excluded.

The bill also avoids overlapping the extra unemployment benefit provision passed the federal government. Congress agreed on a 13-week extension earlier this year. Most of the eligible Farmland workers will receive the benefit from the state after the federal part is exhausted, and the combined payment period will be 26 weeks.

Besides the Farmland bills, the legislature will still continue itemizing bonding provisions for public projects on Wednesday.

Sen. Grace Schwab, R-Albert Lea, and Dorman have been pushing hard a provision for the Blazing Star bike trail that connects Albert Lea and Austin. The House Republicans had agreed to set aside $600,000 for the project, but the appropriation still depends on the negotiations with the Senate.