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Scme other federal officials believe UI~s will be refunded, but distributed differently, to provide help to the cities most in Assistance Initiated ky the State I I I I A) .~hterl~rise Zones ~What the program is.--/n Minnesota an enterprise zone is a development tool that provides tax reductions over a five year period for businesses locating in an eoDnomi~ly distressed area. The zones are intended to expand business in these areas to a) create jobs and b) increase the value of the area through buildirg construction or improvements. Where is the tool bein~ used?--After cities or counties applied for designation as an enterprise zone, DRF. n designated enterprise zones based o~ the level of distress in the area. Distress is signified by th~ D_~m~er of people bel~ poverty, the amount of subs~d housing, ar~ ur~mploym--nt rates. I I I i Two sets of enterprise zones exist in Minnesota: Border zones, in which eoo_r~_ Jcally distressed areas share b~rders with other states; ar~ competitive zones. There are six border zones and ten competitive enterprise zones in the state. In the metropolitan area only Mirneapolis ar~ Saint Paul have designations as enterprise zones. How much mone~ is involved?--g~oughout the state _~r_e than $35.6 million of tax relief is currently a~ailable for the enterprise zones. The tax relief available for each of Minneapolis and Saint Paul is $4.5 million. For the cc~netitive zone cities besides the Twin cities, $10 million in tax relief is available. In the border zones $16,609,900 of total tax relief is available. I I Four tax credits are available to companies locati~ in enterprise zones: l) E~e~tion fr~ sales tax m a~/ egui~nt furet~es; 2) ~ to $3,000 credit against the employer '. s incc~e tax for every new --mployee hired; 3) ~ tax credit for a percentage of the debt financing for facility o0~struction or expansion; 4) State-paid property tax credit for the newly-built facility. By law the cost of tt~ enterprise zone program cannot exceed ~0 million over the eight years of the project. Proposed charges:--l. The 1985 Legislature passed legislation establishing an enterprise zone to attract the 6~4 Saturn automobile mnufacturing plant to Minnesota. If (~4 selects Mir~sota for the plant, this enterprise zone will provide specific benefits to the facility: a) None of the property in the zone may be taxed by tl~ state or local units of govmt; b) All corporate income and excise taxes would be abated, as would all sales ~ use taxes on the purchase of o0~struction materi~l~ or equilmuent. The zone mst be designated before Septenber 30, 1985; its benefits would r_~,~in in effect for 30 years. Th~ state will reimburse th~ local unit of government for revenues foregone from the abated property taxes for any net finar~ial burdens resultirg frcm the zone. Appropriations f~-c~ the general fur~ for this enterprise zone: a) $5 million for foregone property tax revenues; b) $30 million in grants to the city for purchasing and oonveyirg the site, ar~ public imp~ts such as sewer, water