Focus on New Laws: Job Creation Fund Replaces JOBZ

Cities will be able to apply for economic development grants from the Minnesota Job Creation Fund in January.
(Published Oct 14, 2014)

Cities will be able to apply for economic development grants from the Minnesota Job Creation Fund in January.

The 2013 Legislature made economic development funding a high priority, allocating nearly $100 million to the Department of Employment and Economic Development (DEED) for existing and new community and business development programs.

Heading into the 2013 session, one of the most frequently asked questions was what would replace the Job Opportunity Business Zones (JOBZ) program, which is set to expire in 2015. That question was answered when the Legislature appropriated $24 million for the newly created Minnesota Job Creation Fund.

The Job Creation Fund is an initiative of Gov. Dayton designed to replace the expiring JOBZ program. Unlike JOBZ, however, Job Creation Fund dollars will not be limited to communities outside of the seven-county metropolitan area. The fund can provide up to $1 million to businesses that meet certain job creation and private investment requirements. 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 to DEED.

To qualify for benefits, a business must create at least 10 new jobs and invest at least $500,000 in a new, expanded, or remodeled facility. The benefits, which come in the form of rebates on capital investments or cash rewards for job creation, will not be awarded until construction is completed or until the jobs have been created and maintained for at least one year.

DEED is currently in the process of developing program rules and guidelines. DEED officials solicited input from economic development officials across Minnesota, holding meetings in Duluth, Bemidji, Rochester, Fergus Falls, and St. Cloud, as well as within the metro area. DEED hopes to incorporate the input it received from these meetings into the new guidelines. In December, DEED will hold workshops for cities and other groups about the program guidelines and qualifications. DEED anticipates that it will open the application process by late January.

League staff will follow DEED’s progress on implementing the new program, and will alert city officials when program milestones are reached.

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