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Direct Financial Incentives

Job Opportunity Building Zone Program:
Tax-free zones have been established in the area outside the seven-county Twin Cities metropolitan region, to promote job creation and business development. Businesses locating or expanding in these zones will receive exemption from most taxes through 2015; the zone designations began January 1, 2004. Tax exemptions include corporate income tax, sales tax on goods and services purchased for use in the zone, and commercial/industrial property taxes; for certain higher-paying positions, the business will receive tax credits for job creation.

Business loans:
The Small Business Development Loan Program, administered through the Minnesota Agriculture and Economic Development Program, enables the approval of loans for business expansions at fixed interest rates. Loans are available for a maximum term of 20 years for land acquisitions, building construction/renovation, and machinery and equipment. Projects must enhance the local tax base and create and/or retain employment opportunities. A new or expanding industrial, manufacturing, or agriprocessing business that seeks financing for the acquisition of land, buildings, and machinery may apply. The program provides long-term and fixed-rate financing. The loan terms are based on the useful life of the financed assets. Interest rates are based on the market and set at the time of closing.

The Rural Initiative Program provides grants to the six regional organizations that provide loans to new or expanding businesses to stimulate job creation, private investment, and economic growth in the 80 counties outside the Twin Cities area.

The Urban Initiative Program provides matching grants to nonprofit organizations making low-interest loans to businesses located in the Twin Cities area.

Training programs:
The Minnesota Job Skills Partnership Board awards grants of up to $400,000 for cooperative education and training projects between Minnesota businesses and educational institutions. The board acts as a catalyst to bring employers with specific education and training needs together with educational institutions that can design programs to meet those needs. The board also operates the Higher Education Loan Program (HELP) through which businesses may be awarded an interest-free loan of up to $250,000 to pay for worker training.

Other financial assistance:
Through the Small Cities Development Program, grants are awarded to help develop or redevelop small communities by developing new or rehabilitating existing housing, constructing or rehabilitating public infrastructure, and assisting businesses and industries. The latter must be in combination with a housing and/or infrastructure project. A project must principally benefit low- or moderate-income people, prevent or eliminate slums or blight, or alleviate an urgent community development need. Grants are available to cities of fewer than 50,000 people and counties of fewer than 200,000 people. The maximum grant is $600,000 for single-purpose housing or infrastructure. The maximum for combination housing/infrastructure/economic development grants is $1.4 million.

Contamination cleanup:
Grants are available to development authorities for contamination investigations, development of response action plans, or the cleanup of contamination on sites that will be redeveloped. Both publicly and privately owned sites qualify for this program and application requires a 25 percent local match.