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The number of completed JOBZ deals is now 196 projects, resulting in 2,844 new jobs averaging $11.48 an hour. Businesses also promise to retain 5,671 existing jobs and to make nearly $263 million in new capital investments, according to data from the signed business subsidy agreements.
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Minnesota’s popular JOBZ program came another
step closer to reaching the 200-deal milestone last month when Suzlon Energy,
an India-based wind turbine manufacturer, announced it would create at
least 100 new jobs at its first U.S. production facility in Pipestone.
The Suzlon project brought the two-year JOBZ total to 193 deals.
Governor Pawlenty announced the news at a groundbreaking event with Suzlon and Pipestone city officials at the company’s 37-acre site in Pipestone’s Industrial Park. The $14 million plant, scheduled for completion next spring, will supply wind tower blades and nose cones to the North American market.
“Suzlon has come to the right place at the right time, and we couldn’t be happier that they chose Minnesota,” Governor Pawlenty said. “As the country copes with an ever-growing demand for alternative forms of energy, Minnesota stands as a national leader in the development of community-based renewable energy, thanks to the foresight and commitment of many who are gathered here today.”
Suzlon will begin construction immediately on the first of several buildings – a 120,000 square foot manufacturing facility. The project, which includes approximately $10 million in construction and $1.5 million in equipment, represents another milestone for the Governor’s JOBZ initiative.
“JOBZ is breathing new life into communities all across Minnesota,” Commissioner Matt Kramer of the Department of Employment and Economic Development said. “Since the program was launched in January 2004, nearly 200 companies have agreed to invest $185 million dollars, retain more than 5600 jobs and create 2800 new jobs in regions that need them most.”
The city also received a $500,000 state grant for infrastructure improvements on the site, leveraging an additional $1 million from local resources.
“This location is giving us an excellent opportunity to act regionally and help strengthen our relationship with key customers, as well as the local community,” said J.R. Tanti, director of Suzlon Infrastructure Limited, a subsidiary of Suzlon Energy. “Furthermore it provides us with excellent infrastructure conditions to meet the needs of a fast-growing North American market and help us reduce costs associated with the transportation and delivery of these key components.”
Suzlon is no stranger to Minnesota. For more than two years, the company has supplied wind turbines to a consortium of privately owned wind farms known as the DanMar Pipestone Wind Power Projects. State and local developers say a federal tax credit for wind production, coupled with dozens of other wind turbine operations in the area, high fuel prices and a new state incentive for small wind farm producers could make Suzlon one of the region’s largest employers.
Governor Pawlenty said the company’s investment in the state is further evidence that renewable energy from wind will be a cornerstone of Minnesota’s energy portfolio. “Wind energy projects with strong local ownership are good energy policy, good environmental policy and good for local economic development.”
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Wage Floor Clarified
The new 2005 legislation governing the JOBZ program amends the statute as follows: “A qualifying business must pay each employee compensation, including benefits not mandated by law, that on an annualized basis is equal to at least 110 percent of the federal poverty level for a family of four.”
The legislation means that the wage
floor of 110 percent of federal poverty rate for a family of four must
be adjusted each year to reflect the current federal poverty rate.
The wage floor and its annual adjustment apply to each employee located
in the JOBZone. The wage floor will be adjusted on July 1 of each year,
so zone administrators should make sure that their Business Subsidy
Agreements include a provision to meet the wage floor threshold annually.
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Retail Definition Still Pending
Retail businesses are now explicitly prohibited
under the new JOBZ legislation, but the Department of Revenue has not
yet formulated its definition of “retail”. We expect that a definition
will be published in the next edition of JOBZ Newz.
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Form M500
All businesses that signed a Business Subsidy Agreement in 2004 were recently sent Form M500, Reporting of JOBZ Tax Benefits for Tax Year 2004. The form was due on October 15. For businesses that have not yet completed Form M500, here are some tips to help you fill it out:
- Fill in all the blanks in the top portion of the form, including County, Parcel ID, and BSA effective date.
- Be sure to attach Schedule JOBZ to the M500. Schedule JOBZ is attached
to your individual, S-Corporation, partnership or corporate franchise
tax return if you received JOBZ tax exemptions in 2004.
- Send your M500 to Minnesota Revenue if your Schedule JOBZ has been completed.
- If you’re a C-Corporation and the due date, or extended due date,
of your M4, Corporate Franchise Tax return, is after October 15, you
may not have Schedule JOBZ completed.
- You should have completed the M500 without Schedule JOBZ by October
15 and written at the bottom that Schedule JOBZ has not yet been completed
and the date your M4 will be due.
- If your project didn’t get started in 2004, and there were no tax
benefits taken, write that on the bottom portion of the form. Be sure
to complete the top portion.
If you have questions about the form,
contact Anne Gravelle by e-mail at anne.gravelle@state.mn.us, or call
651-556-6836.
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Zone Administrators Have Key Responsibilities
We’d like to remind zone and subzone administrators
that it’s their responsibility to know all aspects of the JOBZ law
and to ensure community and business compliance with its statutory
requirements. It’s particularly important to monitor compliance because
the JOBZ program is currently being audited by the Minnesota State
Auditor’s Office. Zone administrators (or their subzone designees)
must ensure that qualified businesses meet all the terms of their business
subsidy agreements, including job creation and retention, wage floor
requirements and all other applicable JOBZ requirements.
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JOBZ Policy Prohibits “Poaching”
While it is always appropriate to encourage
businesses located outside of a JOBZ area to expand onto any parcel
in the zone, we encourage communities to refrain from actively recruiting
businesses from other JOBZ communities — a practice sometimes referred
to as “poaching.” If anyone becomes aware of a JOBZ community that
intends to use JOBZ benefits to recruit businesses away from another
JOBZ community, please contact DEED immediately.
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Reminder: Send Business Subsidy Agreements To County Assessor
Don’t forget to send your signed Business
Subsidy Agreements to your county assessor. Several county assessors
have complained recently that the BSAs are not being turned in, and
they cannot exempt JOBZ property from taxes if they don’t know the
property is within a JOBZ Zone.
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JOBZ Lawsuit Update:
U.S. Supreme Court Case Could Affect JOBZ
The U.S. Supreme Court last month agreed to decide the constitutionality of an Ohio investment tax credit that gives tax breaks to DaimlerChrysler for a Jeep plant in Toledo. A ruling in that case could have an effect on the JOBZ program in Minnesota and on similar tax incentive programs in other states. For further information, the cases involved are: DaimlerChrysler Corp. v. Cuno and Wilkins v. Cuno. The docket files can be found at the U.S. Supreme Court website: www.supremecourtsus.gov.
Meanwhile, we continue to monitor the state constitutional challenge to Minnesota’s JOBZ program and will communicate developments as quickly and efficiently as possible. All public documents related to the lawsuit can be found on the JOBZ website: http://www.deed.state.mn.us/bizdev/jobzTechAssist.htm
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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.
In addition, five 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:
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)
Tom Carlson: 651-297-1945, tom.carlson@state.mn.us
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
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
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