Section 1, subd. 1 [Definitions] Defines “agricultural processing facility,” “business,” and "city."  “Greater Minnesota” is the area of the state, excluding Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright counties.  Defines “qualified business” as a business meeting the requirements under subdivisions 2, 3, and 5. 

Subd. 2.  [Qualified business]  Defines a qualified business as one that has operated in greater Minnesota for at least one year before applying for certification; pays or agrees to pay its employees compensation of at least 120 percent of the federal poverty line for a family four ($28,260), not including benefits mandated by law; plans and agrees to expand its employment in greater Minnesota by a minimum number of employees; and receive qualification from the Commissioner of DEED as a qualified business.  Public utilities and retail employers that are primarily engaged in selling to purchasers physically present at the business’s location are ineligible.  

Subd. 3.  [Certification of qualified businesses] Authorizes business to apply to the Commissioner of DEED in a form and manner prescribed by the Commissioner for certification as a qualified business.  Businesses must submit a copy of the application with the chief clerical officer of the city, or if applicable, the county auditor.  Requires the Commissioner to certify a business as a qualified business if the business meets the requirements under subdivision 2; the Commissioner determines that the business would not expand its operations in greater Minnesota without at least one of the tax incentives in subdivision 4; and the business enters into a business subsidy agreement with the Commissioner that it will satisfy minimum expansion requirements within three years of execution of the agreement.  The city or county in which a business or agricultural processing facility proposes to expand may file support or opposition to the certification with the Commissioner.  Certification is valid for 12 years beginning the first day of the calendar month following execution of the business subsidy agreement. 

Sets the following minimum expansion requirements for the number of employees in greater Minnesota at the time of execution of the agreement:

• 50 or fewer FTEs – must increase by five or more FTEs;
• 51-199 FTEs – must increase FTEs by at least ten percent; and
• 200 or more FTEs – must increase by at least 21 FTEs.

 Subd. 4.  [Available tax incentives]  Authorizes qualified businesses the following tax incentives for the period the business was certified as a qualified business:  a sales tax exemption on qualifying purchases; a property tax exemption for improvements to commercial and industrial property; and an income tax credit based on a calculation of wages and number of FTEs in greater Minnesota. 

Subd. 5. [Termination of status as a qualified business] Requires the Commissioner to ensure that certified businesses meet the minimum expansion requirements within three years of entering the business subsidy agreement and ensure that the business continues to satisfy the requirements for the duration of the certification period.  Provides that a business ceases to be a qualified business at the end of the duration of its certification period or the date the Commissioner finds that the business failed to meet its minimum expansion requirements.  A business may contest the Commissioner’s finding as a contested case under Minnesota Statutes, chapter 14.  The Commissioner may waive a breach of the certification agreement after consulting with the Commissioner of Revenue if it is determined that that terminating the tax incentives is not in the best interest of the state or local government, and the breach is the result of natural disaster, unforeseen industry trends, an overall decline in the statewide or greater Minnesota economy, or the loss of a major supplier or customer. 

Subd. 6 [Statement of tax expenditure] States that the purpose of the tax expenditure established under the bill is to induce businesses in greater Minnesota to increase investment and expand employment in greater Minnesota.  The goals of the tax expenditure are to increase investments in land and commercial-industrial improvements in greater Minnesota by at least ten percent; increase payrolls in greater Minnesota by ten percent in the three-year period after a business is certified; and that the foregone tax revenue is less than $7,000 per year for each employment position established by a qualified business after its certification.

Section 1 is effective the day following final enactment and applies beginning for property taxes assessed in 2014; sales and purchases made after June 30, 2013; and for jobs credits beginning in tax year 2014.

Section 2. [Greater Minnesota business expansion property]  Creates an exemption for improvements to commercial-industrial property, limited to the market value of improvements made after certification of a qualified business and effective for the assessment years the certification is in effect.  The business must notify the county assessor in writing of its eligibility to receive the exemption by July 1 to receive the exemption for the following year, and must notify the county assessor when the exemption no longer applies.

Section 3, subd. 1 [Jobs credit; greater Minnesota business expansions] Authorizes qualified businesses a tax credit and provides the formula for calculating the credit amount. 

Subd. 2 [Definitions] Defines “base year,” “full-time equivalent employees,” “greater Minnesota,” “greater Minnesota payroll,” “Minnesota payroll,” and “qualified business” for purposes of determining the tax credit authorized in subd. 1.

Subd. 3 [Inflation adjustment] Allows the dollar amounts in part of the calculation of the tax credit in subd. 1 to be adjusted for inflation beginning in tax year 2015 and requires the Commissioner of Revenue to adjust the amounts as provided under current law.

Subd. 4 [Credit refundable] Provides that the credit authorized in subd. 1 is refundable.

Subd. 5 [Appropriation] Appropriates an amount sufficient to pay the refunds authorized in subd. 1 from the general fund.

Section 4. [Sales tax exemption; greater Minnesota business expansions] Provides an upfront sales tax exemption for purchases of tangible personal property and taxable services purchased by a qualified business if the exemption is provided for in the business subsidy agreement; the property or services are primarily used or consumed in greater Minnesota; and the purchase was made and delivery received during the certification period.  Exempts the purchase and use of construction materials used or consumed in, and equipment incorporated into, the construction of improvements to real property in greater Minnesota if the improvements are used in the conduct of the trade or business of the qualified business.  The exemption applies for state and local sales and taxes.  Effective for sales and purchases made after June 30, 2013.

Section 5. [JOBZ prohibition; qualified businesses] Prohibits a local government or business from entering into a business subsidy agreement under the JOBZ program after June 30, 2013.

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