HF 2139

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2021 01:44pm

A bill for an act
relating to economic development; establishing the microenterprise development
program; requiring reports; appropriating money; proposing coding for new law
in Minnesota Statutes, chapter 116J.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116J.8736] MICROENTERPRISE DEVELOPMENT PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of employment and economic
development shall establish the microenterprise development program to award grants to
microenterprise development organizations to encourage microenterprise development.
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new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
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new text begin (b) "Commissioner" means the commissioner of employment and economic development.
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new text begin (c) "Disadvantaged entrepreneur" means an owner of a microenterprise who is a
low-income person or otherwise lacks adequate access to capital or other resources essential
for business success. This includes Minnesota family investment program participants who
are self-employed under section 256J.37.
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new text begin (d) "Low-income person" means a person with an income adjusted for family size that
does not exceed:
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new text begin (1) for metropolitan areas, 80 percent of median income; or
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new text begin (2) for nonmetropolitan areas, the greater of 80 percent of the area median income or
80 percent of the statewide nonmetropolitan area median income.
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new text begin (e) "Microenterprise" means a business, including a start-up, home-based, or
self-employed business, with no more than five employees.
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new text begin (f) "Microenterprise development organization" means a nonprofit entity that provides
one or more of the services under subdivision 4 to disadvantaged entrepreneurs.
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new text begin (g) "Program" means the microenterprise development program established under this
section.
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new text begin Subd. 3. new text end

new text begin Grants to microenterprise development organizations. new text end

new text begin The commissioner
shall make grants to microenterprise development organizations through a competitive grant
process based on criteria developed by the commissioner and shall consider each applicant's:
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new text begin (1) plan for providing business development services and loans to microenterprises;
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new text begin (2) scope of services to be provided;
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new text begin (3) plan for coordinating services and loans with financial institutions;
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new text begin (4) ability to provide business training and technical assistance to disadvantaged
entrepreneurs;
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new text begin (5) ability to monitor and provide financial oversight of recipients of loans and services;
and
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new text begin (6) sources and sufficiency of operating funds.
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new text begin In selecting grant recipients, the commissioner shall ensure that services are provided to all
regions of the state, including both metropolitan areas and communities in greater Minnesota.
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new text begin Subd. 4. new text end

new text begin Eligible uses of grant funds. new text end

new text begin Microenterprise development organizations may
use grant funds for any of the following purposes:
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new text begin (1) satisfying matching fund requirements for federal or private grants or loans that will
allow the microenterprise development organization to provide another service under this
subdivision to disadvantaged entrepreneurs;
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new text begin (2) establishing a revolving loan fund for loans to disadvantaged entrepreneurs. The
loans may be zero interest and must be for no more than $25,000 per microenterprise;
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new text begin (3) guaranteeing loans from private financial institutions to disadvantaged entrepreneurs;
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new text begin (4) providing technical assistance, mentoring, training, or physical space to disadvantaged
entrepreneurs; and
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new text begin (5) up to ten percent of grant funds may be used for the operating costs of the
microenterprise development organization and its administrative costs for the program.
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new text begin Subd. 5. new text end

new text begin Reports to the legislature. new text end

new text begin (a) By December 1, 2023, and every December 1
thereafter until given permission by the commissioner to cease reporting, grant recipients
must submit a report to the commissioner on the use of grant funds in the form that the
commissioner prescribes and include any documentation of and supporting information
regarding the grant that the commissioner requires, including:
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new text begin (1) the demand for services under the program;
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new text begin (2) information on the types of applicants seeking program services; and
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new text begin (3) a list of all loans or loan guarantees made, including the name of the recipient, the
amount, and its intended purpose.
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new text begin (b) By December 31, 2023, and every December 31 thereafter until all grant recipients
have ceased reporting, the commissioner must submit a report as required under Minnesota
Statutes, section 3.195, that details the use of funds under this section, including the
information provided by grant recipients, as well as an analysis of the impact of the program.
A copy of this report must also be sent to the chairs and ranking minority members of the
committees of the house of representatives and the senate having jurisdiction over economic
development.
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Sec. 2. new text begin APPROPRIATION.
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new text begin $3,750,000 in fiscal year 2022 and $3,750,000 in fiscal year 2023 are appropriated from
the TANF fund and $1,250,000 in fiscal year 2022 and $1,250,000 in fiscal year 2023 are
appropriated from the general fund to the commissioner of employment and economic
development for the microenterprise development program. Of the amounts appropriated
from the TANF fund, $500,000 each year is for providing technical assistance and outreach
to microenterprise development organizations.
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