Jobs push taking shape

Proposals include angel investor credits, streamlined regulations

Nearing the start of a 2010 session that promises to be both urgent and acrimonious, top House and Senate leaders are in seeming agreement about one path out of Minnesota’s employment and state revenue troubles. Both sides say they’re serious about producing job stimulus legislation.

Much of the discussion about job creation in Minnesota will take place around the bonding bill. DFLers are hoping to pass a bonding package of $1 billion or so in the first weeks of session.

The state’s chronic fiscal crisis makes it unlikely that any stimulus measures outside the bonding bill will be very expansive. But there are numerous ideas on the table, and they range from business permit reform to tax incentives.

A 2009 proposal known as the Minnesota Stimulus Bill, sponsored by Sen. James Metzen, DFL-South St. Paul, is among the measures that legislative leaders are highlighting on their agendas as the Feb. 4 date for reconvening the 86th Legislature looms.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, speaking on Tuesday during a legislative panel discussion in Bloomington, said that parts of Metzen’s bill will be featured in a jobs bill again in 2010. The Metzen proposal passed the Senate 56-11 last year.

“I think an angel investment credit will be in there and will be paid for,” said Pogemiller. “There will also perhaps be an historical tax credit. There are other small, modest things we can do to stimulate some activity.”

Among the key provisions of Metzen’s bill:

• A state-backed loan guarantee program for construction projects. An account for the program, which was originally created in the bill by bonding proceeds, would be established with general fund money. A guarantee must not exceed $50 million on any project, according to the bill. (During a legislative preview panel on Tuesday, House Minority Leader Kurt Zellers, R-Maple Grove, said that Gov. Tim Pawlenty repeatedly voiced his opposition to loan guarantees during a meeting with legislative leaders last week.)

• An income tax credit for low-income housing construction.

• An advance loan program for first-time home buyers who receive a tax credit from the federal stimulus bill.

Metzen’s proposal last year had bipartisan support, with Senate Minority Leader Dave Senjem, R-Rochester, signing on as a cosponsor.

But the measure faced a couple of obstacles.

The bill wasn’t introduced until April 16 and went through four Senate committees before it was passed May 11 on the Senate floor.

It also had bipartisan opposition. Sen. John Marty, DFL-Roseville, said during floor debate that he was concerned that the bill would be used to provide public subsidies for an expansion project at the Mall of America or a professional sports stadium.

In the end, the bill didn’t arrive in the House soon enough to receive a thorough vetting.

While the bill passed the Senate, one legislative staffer said it might be revised and reintroduced in the Senate in the 2010 legislative session.

Business groups such as the Minnesota Chamber of Commerce have been quiet about Metzen’s bill.

Business, however, has been outspoken in support of proposals that would provide new sources of capital to small and start-up businesses. Their proposals include tax incentives for angel investors and small businesses.

Tom Hesse, vice president for government affairs at the Minnesota Chamber of Commerce, noted that the Pohlad family gave the Chamber $5.5 million to distribute to small businesses that are having a difficult time getting financing. The Chamber received an overwhelming number of requests, Hesse said.

“Businesses need more capital than is available,” Hesse said.

Sen. Kathy Saltzman, DFL-Woodbury, has drawn attention to her angel investor tax credit proposal by pointing out recent moves by Minnesota businesses to Wisconsin. Saltzman’s proposal offers a 25 percent tax credit for qualifying high-tech business ventures.

A joint hearing of the House Taxes and Biosciences and Workforce Development committees to discuss angel investor proposals is scheduled for Feb. 9.

Legislative leaders have sounded a willingness to pursue complaints from businesses that the state has onerous regulations and a time-consuming permit process.

Hesse said the Chamber is planning to present legislation that deals with permitting in 2010. “We hear all the time from our members that what takes months in other states takes years in Minnesota,” Hesse said.

Businesses are also wary of proposals that would increase the cost of doing business in the state.

Proposals in the past that should be avoided, Hesse said, include adding new mandates for insurance companies and sick leave proposals that add costs to employers.

“There are a variety of issues that the Legislature has debated in past years that have either been vetoed or not gotten to the governor that have increased the cost of doing businesses in the state. Lawmakers should shelve those ideas,” Hesse said.