JOBZ

• JOBZ Tracker
• Legislature Makes Changes in JOBZ Program
• JOBZ Policy Reminders

• JOBZ Lawsuit Update
• Arrivals and Departures in the JOBZ Program
• JOBZ Resources

JOBZ Tracker

The number of completed JOBZ deals is now 170 projects, resulting in 2,461 new jobs averaging $11.33 an hour. Businesses also promise to retain 5,367 existing jobs and to make more than $178 million in new capital investments, according to data from the signed business subsidy agreements.

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Legislature Makes Changes in JOBZ Program

The 2005 Legislature has made several technical and policy changes to the JOBZ statutes. And now that the results are in, DEED’s technical assistance staff is preparing a half-day session for the 10 JOBZ zone administrators to discuss all the changes and the impact on the administration of the program. The event is scheduled for the morning of Tuesday, August 16, at DEED headquarters in downtown St. Paul.

Until then, here’s a brief summary of the main legislative changes:

• Communities are now required to evaluate potential JOBZ projects using a JOBZ Deal Evaluator developed by DEED. The Deal Evaluator must be used to score all potential projects before signing a business subsidy agreement. The mandatory data form for each project must include a copy of the completed Deal Evaluator scoring.
   
• Under the old law, a relocating business must either increase employment by 20 percent or make a capital investment of at least 10 percent of the gross revenues from the relocated operations. The new law requires a relocating business to increase employment by at least five jobs or 20 percent, whichever is greater, and eliminates the capital investment option.
   
• Retail businesses and utilities now are explicitly not eligible to participate in the JOBZ program.
   
• A major change was made to the way that relocating businesses calculate their income or corporate franchise tax deduction. As under current law, relocating business will calculate the JOBZ subtraction by applying their zone percentage to their net income. They will then multiply the result by a fraction, the numerator of which is zone payroll in the current year minus payroll from the relocated operation and the denominator of which is zone payroll in the current year. This applies to relocating businesses that fully execute business subsidy agreements after August 31, 2005.
   
• A business subsidy agreement must be signed by July 1 of the assessment year for commercial/industrial property occupied by a qualified business to qualify for the JOBZ exemption from property taxes payable in the following year.
   
• A business is a qualified business only on those parcels of land for which it has entered a business subsidy agreement with the appropriate local government. This provision is effective retroactively to June 9, 2003.
   
• The Tax Increment Financing, Investment, and Financing Division of the office of the State Auditor will annually be auditing the creation and operation of JOBZ zones and business subsidy agreements of businesses operating in the Zones.
   
• Qualifying businesses are required to pay compensation to each employee that is equal to at least 110 percent of the federal poverty level for a family of four on an annualized basis. This provision took effect on July 1, and is applicable to any business entering a JOBZ business subsidy agreement after that date.
   
• The new law clarifies that the clawback provisions of the JOBZ law must take precedence over any conflicting clawback provisions of the business subsidy laws.
   
• A technical change clarifies the reporting responsibility of the DEED Commissioner and repeals a requirement for publishing in the State Register all JOBZ zone modifications.

For more information about technical and policy changes to the JOBZ program, contact Meredith Udoibok, 651-297-4132.

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JOBZ Policy Reminders

• Some business subsidy agreements have improperly listed benefit dates in months prior to the execution. As a reminder: JOBZ businesses are considered to be “qualified businesses” – and thus eligible for JOBZ benefits – only on the date of the last signature on the business subsidy agreement (or, in the case of relocations, the last signature date of both the business subsidy and relocation agreement). Please note that the benefit date listed on the business subsidy agreements must be the same as the date of the last signature.
   
• Remember: The sale of acres for JOBZ projects is not permitted. If your city does not have sufficient JOBZ acres to complete a business deal, DEED policies permit you to acquire them from other JOBZ communities. Because we all have an interest in doing as many deals as possible, we strongly encourage communities to cooperate by giving up unused JOBZ acres to others that have a good business prospect on the line. DEED will assist any community that has given up acres to get them back if they need acreage for a future business deal.
   
• All JOBZ administrators and subzone administrators should check the online list of done deals at http://www.deed.state.mn.us/bizdev/PDFs/jobzDeals.pdf . If your done deal does not appear on this site, which is updated every Friday, then DEED does not have all of the paperwork for the project. In reviewing annual business subsidy reports we’ve encountered reports for JOBZ deals that we’ve never seen or heard of. Please help us keep the documentary record accurate and up to date. This is important: a business is not a qualified business and cannot claim exemptions unless all of their paperwork is in.

JOBZ Lawsuit Update

There is nothing new to report on the constitutional challenge to the JOBZ Program. We continue to monitor the case and will communicate developments as quickly and efficiently as possible. All public documents and information related to the lawsuit can be found on the JOBZ website: http://www.deed.state.mn.us/bizdev/jobzTechAssist.htm.

Arrivals and Departures in the JOBZ Program

Please join us in welcoming Marcus Martin to the JOBZ technical assistance staff. Marcus will be joining the staff on August 8 to assume responsibility for the Land of the Dancing Sky and Upper Minnesota Valley JOBZ zones. Those zones have been served by Katie Hatt, who is leaving the JOBZ staff on August 3. In the interim, you may contact Kristin Lukes if you have questions about those two zones. Check the list below for complete contact information.

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JOBZ Key Contacts

For most JOBZ-related questions, you’ll get the fastest and most accurate responses if you direct your general questions first to your local sub-zone administrator or one of DEED’s business marketing representatives, all of whom have contact information listed on the JOBZ web page: http://www.deed.state.mn.us/bizdev/PDFs/jobzAdmSupCont.pdf.

For program-related information about specific businesses:
Mark Lofthus, DEED Director of Business Development
651-297-4567, mark.lofthus@state.mn.us

For tax and revenue information:
Anne Gravelle, Department of Revenue Tax Specialist
651-556-6836, anne.gravelle@state.mn.us

For information about Prevailing Wage requirements and compliance:
Erik Oelker, Department of Labor and Industry Senior Investigator
651-284-6269, erik.oelker@state.mn.us

In addition, DEED technical assistance representatives are ready to answer any purely technical questions you might have about any of the 10 zones.  To reach the appropriate technical assistance representative for your zone, check the following list:

Land of the Dancing Sky and Upper Minnesota Valley
Marcus Martin: 651-282-6789, marcus.martin@state.mn.us

Positively Southern Minnesota JOBZ Growth Corridor and Region 5 JOB Zone
Adam Kienberger: 651-282-5014, adam.kienberger@state.mn.us

Southwest Regional Zone and Headwaters Zone
Kristin Prososki: 651-297-7133, kristin.prososki@state.mn.us

Southern Minnesota JOBZ Alliance and Northeast Minnesota Zone
Roy Murphy: 651-296-2529, roy.murphy@state.mn.us

West Central Minnesota Zone and East Central Zone (7E)
To be filled; in the meantime call Kristin Lukes, 651-296-1149, or any technical assistance staff member or for information.

MNPRO and Community Profiles
Judy Parker: 651-296-3963, judy.parker@state.mn.us

Business subsidy policies, public hearings, annual reporting
Ed Hodder: 651-296-0580, ed.hodder@state.mn.us

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