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6.6 EDSR 01-21-2014 ilk Request for Action River To Item Number Economic Development Authority 6.6 Agenda Section Meeting Date Prepared by General Business January 21, 2014 Brian Beeman, Director of Economic Development Item Description Reviewed by Discussion of Modifications/Amendments to Jeremy Barnhart,Deputy Director, CODD Statute and/or Enabling Resolution Reviewed by Action Requested Discuss modifications to Statute Background/Discussion As per Economic Development Authority Bylaws,it is suggested that the EDA discuss any modifications or amendments to the Statute and/or Enabling Resolution. The EDA attorney has provided a review and submitted an opinion as suggested each year,attached. Staff will review this report with the EDA at the Annual Meeting. Financial Impact N/A Attachments • EDA Changes to Act i ■ E i E 1 I T NARWE MEMORANDUM TO: Elk River EDA Chair and Commissioners FROM: Andrea McDowell Poehler DATE: Friday, December 27, 2013 RE: Amendments to Economic Development Authority Act Background The bylaws for the EDA require an annual update of legislative changes to the Economic Development Authority Act, Minn. Stat. § 469.090 to § 469.1082. Only one change to the Act was adopted this past legislative session: • Minn. Stat. § 469.107, subd. 1 was amended to convert the EDA city levy from 0.01813 percent of taxable market value to the same percentage of estimated market value. This amendment took effect on May 24, 2013. Other economic development legislative changes included the following: • Minn. Stat. § 116J.5764, subd. 1, the statute authorizing the Department of Employment and Economic Development(DEED)to administer demolition redevelopment loans to development authorities. The law expands the acceptable means by which an authority may secure a loan to pay for demolition costs from solely a general obligation of the authority payable primarily from a dedicated revenue source to include other security subject to review and approval by DEED, such as TIF or land sale proceeds. The amendment took effect August 1, 2013. • Jobs, economic development,housing, commerce and energy omnibus budget bill Chapter 85 (HF 729*/SF 1057) is the omnibus jobs, economic development, housing, commerce, and energy bill. It appropriates biennial funding for the Department of Employment and Economic Development(DEED), Housing Finance Agency(HFA), Department of Labor& Industry (DLI), Department of Commerce, Public Utilities Commission(PUC), and various boards. The provisions relating to the jobs and economic development portion of the bills of interest to cities are summarized below. Article 1:Appropriations Minnesota Investment Fund (MIF). Section 3, subd. 2(a) appropriates $15 million in FY 2014 and 2015 for the MIF program. MIF funds are available to local units of government to provide loans to assist expanding businesses: • Minnesota Job Creation Fund. Section 3, subd. 2(b) appropriates $12 million in FY 2014 and 2015 for the newly created Minnesota Job Creation Fund in Minn. Stat. § 116J.8748 (see Article 3, sec. 8 below). • Contaminated site cleanup. Section 3, subds. 2(c) and(d) appropriate approximately $2 million in FY 2014 and 2015 for the contaminated site clean-up and development grant program. • Business development grants. Section 3, subd. 2(e) appropriates $1.425 million in FY 2014 and 2015 for business development competitive grants. • Jobs Skills Partnership. Section 3, subd. 2(f) appropriates $4.195 million in FY 2014 and 2015 for the Jobs Skills Partnership in Minn. Stat. § 116L.01. • Redevelopment program. Section 3, subd. 2(g) appropriates $6 million in FY 2014 and 2015 for the Redevelopment program under Minn. Stat. § 116J. 571. The program provides communities with grants to pay up to 50 percent of the costs or redeveloping blighted industrial, residential, or commercial sites. • Host Community Economic Development program. Section 3, subd. 2(r) appropriates $875,000 in FY 2014 and 2015 for the Host Community Economic Development program created in Minn. Stat. § 116J.548. Section 3 creates a new program in Minn. Stat. § 116J.548 that will provide grants for the acquisition and betterment of public owned capital improvements to communities in the seven- county metro area that host waste disposal facilities. There is no local match required. Effective July 1, 2013. Article 3: Department and Economic Development(DEED)policy provisions • Small cities development block grant changes. Section 4 modifies Minn. Stat. § 116J.8731,subd. 2 to allow DEED to provide a forgivable loan from the Small Cities Development Block Grant Program directly to a private enterprise without requiring an application from the local community, other than a resolution of support. Eligible applicants include development authorities,provided they have municipal approval. Effective July 1, 2013. • Minnesota Investment Fund loans authorized. Section 5 amends Minn. Stat. § 116J.8731, subd. 3 and authorizes the Minnesota Investment Fund (MIF)to fund loans (in addition to grants)for infrastructure. Effective July 1, 2013. • Minnesota Job Creation Fund. Section 8 creates the Minnesota Job Creation Fund, an initiative of Gov. Dayton designed to replace the expiring JOB-Z pro- gram. Unlike JOB-Z,the Job Creation Fund is available statewide. The fund will provide up to $1 million to businesses that meet job creation and private invest- ment requirements. To qualify, a business must create at least 10 jobs and make $500,000 in private investment. A qualifying business must be engaged in manufacturing, warehousing, distribution, information technology, finance, insurance, or professional/technical services. "Professional services"does not include work performed primarily by attorneys, accountants, business consultants, physicians, or health care consultants. Local government approval required. In order to qualify, a business must submit an application to the local government where the facility will be located, and the local government must submit the application and other required materials to DEED. Effective July 1, 2013.