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CITY OF PEQUOT LAKES '1 JOBZ BUSINESS SUBSIDY POLICY AND CRITERIA (As Modified October 2010) I. INTRODUCTION AND DEFINITIONS This JOBZ Business Subsidy Policy (the "Policy") is adopted for purposes of Minnesota Statutes, Sections 469.310 through 469.320 and as may be amended(the "Job Opportunities Building Zone Act" or "JOBZ Act," and with the Business Subsidy Act, the "Acts"). Terms used in this Policy are intended to have the same meanings as if used in the Act, and any amendments or modifications to the Act shall amend or modify the definitions and terms of this Policy without any further action of the City. This Policy shall apply only with respect to subsidies granted under the Act if and to the extent required thereby. A copy of this policy shall be submitted to the Minnesota Department of Employment and Economic Development or a successor entity ("DEED"). The City shall have the option of amending or waiving sections of this policy and criteria when determined necessary or appropriate. The Business Subsidy Act allows the City to deviate from its criteria by documenting in writing the reason for the deviation and attaching a copy of the document to its next annual report to DEED. Every potential business subsidy project within the City of Pequot Lakes (the "City") will be evaluated according to this Policy and the criteria set forth herein. Meeting all or a majority of the criteria, however, does not mean that a business subsidy will be awarded or denied by the City. The City maintains its ability to approve or reject a business subsidy at its discretion, based on the merits of the project and the overall benefit to the community, using the criteria as a means of measuring overall benefit. A.Job Opportunities Building Zone(JOBZ) Business Subsidy. Under the JOBZ Act, a Business Subsidy includes the subsidy provided through the following set of tax benefits to certain qualified businesses: 1. Exemption from individual income taxes, 2. Exemption from corporate franchise taxes, 3. Exemption from state sales and use tax and any local sales and use taxes on qualifying purchases, 4. Exemption from state sales tax on motor vehicles and any local sales tax on motor vehicles, 5. Exemption from property tax, 6. Exemption from wind energy production tax, and 7. Jobs credit. B. Further Definitions. The following defined terms apply to JOBZ business subsidies. Any terms not defined herein shall have the meanings set forth in the Act. If the Act is amended to affect any of these defined terms, then the definition or definitions set forth in the Act shall replace the definition or definitions set forth within this Section and be incorporated herein without amendment to this Policy or any type of action of the City. "Benefit Date" means the Benefit Date as defined in the Business Subsidy Act. Page 1 of 6