Tax Incentive Evaluation Law: Minnesota

Fact Sheet June 4, 2015 Read time:

Projects: Economic Development

This page is no longer being updated. As of June 15, 2017, newer tax incentive evaluation fact sheets are available here.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.

Minnesota

S.F. 888, enacted May 23, 2015

What it does

Requires evaluation of all major tax incentives
The nonpartisan Office of the Legislative Auditor will evaluate at least one incentive program each year. Lawmakers on the Legislative Audit Commission will develop a plan for each evaluation to ensure that the research yields the information that policymakers need to make informed decisions.
Ensures analysis of incentives for specific companies
In addition to studying programs that are available to multiple businesses, the Office of the Legislative Auditor will study "exclusive incentives" provided to individual projects or companies. The office will produce a report on best practices for exclusive incentives at least once every four years.

Requires evaluation of all major tax incentives

The nonpartisan Office of the Legislative Auditor will evaluate at least one incentive program each year.

Lawmakers on the Legislative Audit Commission will develop a plan for each evaluation to ensure that the research yields the information that policymakers need to make informed decisions.

Ensures analysis of incentives for specific companies

In addition to studying programs that are available to multiple businesses, the Office of the Legislative Auditor will study "exclusive incentives" provided to individual projects or companies.

The office will produce a report on best practices for exclusive incentives at least once every four years.

Excerpt from Minnesota’s law: Exclusive incentive analysis

"Exclusive incentive" means a state program, statutory provision, tax expenditure, or section of a general incentive, including tax credits, tax exemptions, tax deductions, grants, or loans, that is intended to encourage a single specific entity, project, or associated projects to locate, expand, invest, or remain in Minnesota or to hire or retain employees in Minnesota.

...

Exclusive incentive schedule. The legislative auditor's schedule shall ensure that at least once every four years the legislative auditor will complete an analysis of best practices for exclusive incentives.