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I I I I I I I I ! I I I I I I I I I I and other utilities; c) ~4 million for a relocation expense fun~; d) $2 m/llion to the Higher F~ucation O0ordinating Board to create education and trainir~ transition teams; e) $2.2 m~l/ion for administrative support to the job trainirg oenter (to be built by th~ state board of AVTIs with $20.6 million frc~ the state buildirg fund. ) 2. The 1985 Legislature p~ssed legislation offerirg special assistance to new or exp~nding manufacturing businesses in the state. Businesses that qualify as econcmic '.'diversification projects': would be eligible for lo~ns, property and sales tax reimbursements, or interest subsidy payments. Businesses locating inside a distressed county as defined in the legislation, must meet several conditions to be eligible: they must be primarily engaged in manufacturing or mail order sales; the total capital investment in the business ~st be at least $3 million ar~ it must create at least 25 new jobs, or the investment must be at~ least $1 million with 50 new jobs; it must be shown the business would r~)t have located in the distressed county without the assistance. Manufacturing businesses locating cutsid= a distressed county must have a natic~al or international market for their products, a total capital investment in the project of at least $3 mil/ion, and must create at least 50 new jobs. Th~ project must result in diversifying tt~ state'.s economy ar~ establishing new markets for Minnesota products. The Department of Energy and ~c Develol~nt must determine the business would not locate in Minnesota without the assistance. The special assistance may not exceed 20 percent of the total capital investment in the project, nor exceed $20,000 for each permanent job created. 3. The federal government is advocating a program similsw to Minnesota '. s enterprise zones. The B~agan administratic~ supports an enterprise zone program with tax incentives to attract redevelopment of distressed areas. With the administration'.s proposal, ~p to 25 areas per year would be designated enterprise z0~es for three years. Businesses in the zones would be exempt from tax for certain gains, and entitled to tax credits for capital investment, increases in ~m~ployment, ar~ hiring disadvantaged e~ployees. Tax credits would also go to employees in the zones. The tax exper~iture for the 25 zones would be $305 million in 1986. B) The Econcmic Recovery Grant What it is.--A $6 million grant program from the state, allowing cities to offer below-market, fixed rate loans to new or expar~irg businesses. Cities may apply for ~ to $250,000 in development grants to make loans to businesses or to create infrastructure improvements that are in direct support of the develol~nent project. Businesses may use th~ low-rate loan for buying or improving fixed assets, purct~-~ing mad~inery ar~ equipment, or for working capital. The state-fur,~ed 9rants are not actually grants because $100,000 must be paid back to the state for future develop~=-nt grants. These grants suppl~t the federally funded Small Cities Develoia~ent Program, $3 million of which is set aside as eooncmic developme___-nt grants. Where is it beir~ used? In 1984 nineteen local goverr~ents received grants from the state-funded eoon~nic development grants, ar~ fourteen recei~=d grants frcm the federal small cities block grant. ALl are located outside the