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From:BCD/MKTG To: Mr.Brian Frttsinper Date:6/2/95 Time:12:58:58 Pape 1 o(2 ECONOMIC DEVELOPMENT UPDATE DTED EDAM Minnesota Department of Trade = Economic Development Economic Development i Association un°= of Minnesota Cunaact:Gene Goddard,612-297-1168 Volume 2,No.20 1-800-657-3858 Contact John Moon.612-854-6215 1995 LEGISLATIVE SESSION SUMMARY Governor Slens Workers'Compensation Reform Bill: Governor Ame H. Carlson signed the 1994 Workers'Compensation Reform bill. The compromise legislation developed by the Bipartisan Workers'Compensation Caucus includes the following provisions: •Cuts costs to Nlinnesota Employers by 11 percent,or about$130 million per year. •Reduces cash benefits paid to injured workers by nearly 33°'i,. The reductions come primarily from raising the threshold of the permanently disabled classification. ,,bout half as many workers would qualify for that category. "Reduces and delays cost of living increases.A workers'compensation recipient can now get up to 4%cost of living increase after two years. The bill would cut the increase to 2%and delay the dust cost of living adjustment until the fourth year. *Repeals supplementary benefits for certain workers,and replaces them with a benefit equal to 65 0-o of the statewide weekly average wage. •Raises the maximum weekly benefit for a person who is temporarily totally disabled to$615 from$517. •Provides a premium discount of 33°'o for small employers in the assigned-risk pool who have had no lost-time claims for three consecutive years. *Group self-insurance will be more available then ever. Smaller employers with good safety and premiums less than 53,000 per year will be eligible for a 33%discount on their assigned risk premiums. •Repealed the two tier system and lump sum benefits and replaced them with a new permanent partial disability schedule. •WC benefits will end at age 67,unless the injured worker is without regular Social Secunty payments or lacks a pension. a *Charges'Workers' Compensation Advisory Council with recommending changm to benefit amounts and other changes in the system. Leadership of Bipartisan Workers'Compensation Caucus:Sen.Dallas Sams,Sen.Linda Runbeck Sen.Roy Terwilliger,Sen.Keith Lanseth,Rep.Hilda Bettermamn,Rep.Becky Kelso,Rep. Jim Girard,Rep. JefFBertram Rep.Wayne Simoneau. DTED Economic Development Spending Bill: The final budget bill passed by both houses includes several cuts for DTED. The following is a list of the program funding levels:$6,017,000 Economic Recovery Fund first year only. *$400,000 grant to Advantage Nfinnesota *$900.000 match for SBDC's *$3,949,000 biennial for\fN Job Skills partnership *$1,000,000 increase for tourism marketing. Corporate Welfare/Living Wage Bill Amended:Corporate Welfare provisions were included in S.F. 1670,Section 58 but the language has been modified from its original version. The new provisions require that businesses that receive assistance, including TIF, for economic development or job growth purposes in excess of$25,000 must create a net increase in jobs in Alinnesota within two years of receiving the assistance. In addition,the agency must establish wage level and job creation goals to be met by the business and report them to DTED. If these goals are not met the business must repay the assistance. Tax Increment Financing:Compared to many versions of bills introduced that affect TT,the changes included in article 5 of the Omnibus Tax Bill are relatively moderate. In at least one case,the changes may lead to increased opportunities for cities.EDA's and HRA's. The following summary of key provisions has been prepared by\lark Ruff of EhlersiPublicorp: LG,1-1ACA Penalty- *The one change which seems to be a positive move is the local contribution option.A tax increment district is exempt from the LGA%1L4,CA penalty if the authonty or municipality makes a local contribution to a project in the new district.The contribution must be made from unrestricted money and is lower if a state incentive is involved. For economic development,housing and renewal and renovation districts,the contribution is 10%,and for all other districts the minimum contribution is 7.5°b. Any district which requested or requests certification after June 30. 1994,may elect to make the contribution. * Up to$1.5 million of tax increment for ethanol and agricultural processing facilities are exempt form the LGA F-L-kCA penalty certain conditions. *No new qualified manufacturing districts are allowed.