Bill would set up replacement for JOBZ program

Published 10:41 am Thursday, April 4, 2013

An economic development bill proposed to replace the Jobs Opportunity Building Zones program is expected to come before the House taxes committee this week.

The bill, proposed by District 27A Rep. Shannon Savick, DFL-Wells, was authored with the help of the Greater Minnesota Economic Development Partnership.

A companion bill has been proposed in the Senate.

Shannon Savick

Shannon Savick

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The partnership worked with cities, businesses, chambers of commerce and economic development authorities to create what they describe as a simpler program that would be easier to use and manage.

Local officials said earlier this week they were in favor.

“The jobs program we are putting forward in the House is very positive for Minnesota and it will help create jobs across the state,” Savick said.

She said her proposal would add extra help for rural areas that are in greater need than many communities in the metro area, she said.

“I think it’s critical not just for Albert Lea and Freeborn County but for all of the state,” said Albert Lea Economic Development Agency Executive Director Dan Dorman.

The current JOBZ program, which has created more than 800 jobs in the local area, offers local and state tax exemptions through 2015 to qualified companies that start up or expand in targeted areas of Greater Minnesota.

Because the JOBZ program is set to sunset in 2015, lawmakers have been working to come up with its replacement.

Under the new proposal, a business would have to be located in a city for at least a year, pay all of its employees at least 120 percent of federal poverty levels and expand by a specified amount of employees to qualify for incentives. Retail or public utilities would not be eligible.

If a business qualifies and is approved to be a part of the program, it could receive sales or property tax exemptions, jobs credits and subsidies that last up to 12 years.

A business with 50 or fewer employees would need to add five or more employees, while a company with between 50 and 200 employees would need to add 10 percent to its workforce. Businesses with 200 employees or more would need to add at least 20 jobs.

Subsidies would cease for a business that fails to meet the requirements within three years.

The program would be administered through the Minnesota Department of Employment and Economic Development, but officials on the city level would also play a part.

Dorman said he knows of at least one manufacturer in town who is looking at an expansion who would utilize the program if it were in place.

Tim Flaherty with Flaherty & Hood said the proposal would get rid of the building zones under the current plan, and it would only apply to businesses in the community that are expanding, he said.

“Most of our business grown is going to come from businesses already in our communities,” Flaherty said. “We can get good economic development in our communities, but we do need some incentives.”