HF 4105

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/07/2024 04:36pm

A bill for an act
relating to economic development; appropriating money for the GroundBreak
capital access fund; requiring a report.

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

Section 1. new text begin GROUNDBREAK CAPITAL ACCESS FUND; APPROPRIATION.
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new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $70,000,000 in fiscal year 2025 is appropriated from
the general fund to the commissioner of employment and economic development for a grant
to the Minneapolis Foundation for the GroundBreak capital access fund program to improve
access to capital for entrepreneurs and commercial developers of color, focusing particularly
on Black wealth builders. The Minneapolis Foundation must secure matching funds prior
to the release of state funds appropriated under this section.
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new text begin Subd. 2. new text end

new text begin Use of money. new text end

new text begin Money may be used for forgivable loans, low-cost loans, loan
guarantees, or equity enhancements. Distribution of money shall occur through approved
partners, including nonprofit organizations and Community Development Financial
Institutions (CDFIs) meeting the GroundBreak program criteria and priorities.
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new text begin Subd. 3. new text end

new text begin Criteria and procedures. new text end

new text begin (a) The Minneapolis Foundation and GroundBreak
partners shall establish criteria, procedures, and requirements for determining eligibility,
evaluating funding applications, and administering the program.
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new text begin (b) The Minneapolis Foundation shall submit the developed criteria, procedures, and
requirements to the commissioner of employment and economic development for review
and approval.
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new text begin Subd. 4. new text end

new text begin Eligibility requirements. new text end

new text begin (a) To qualify for funding from the GroundBreak
capital access fund, an applicant must:
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new text begin (1) be a resident of Minnesota;
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new text begin (2) submit a business plan for consideration and:
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new text begin (i) have no revenue or less than a year of revenue for a forgivable start-up loan;
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new text begin (ii) have over a year of revenue for an early-stage business loan with a guarantee; or
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new text begin (iii) have over two years of revenue for a growth-stage business loan with a guarantee;
and
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new text begin (b) Neighborhood commercial developments under $15,000,000 may qualify for:
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new text begin (1) equity enhancements up to two percent of the project cost or $250,000 maximum;
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new text begin (2) commercial mortgage loans with a guarantee for the first 60 percent of total project
costs; and
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new text begin (3) a low-cost loan to provide junior debt for up to 35 percent of total project costs.
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new text begin Subd. 5. new text end

new text begin Program administration. new text end

new text begin (a) The Minneapolis Foundation shall establish
appropriate accounting practices for the purpose of tracking loans, equity investments, and
loan repayments for reinvestment into the program.
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new text begin (b) Interest rates on loans shall not exceed the prime rate published by the Wall Street
Journal.
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new text begin Subd. 6. new text end

new text begin Reporting requirements. new text end

new text begin (a) By February 15, 2025, and annually until February
15, 2027, the Minneapolis Foundation shall submit a report to the chairs and ranking minority
members of the legislative committees with jurisdiction over jobs and economic development
on the use of grant money and program outcomes. This report shall include the following:
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new text begin (1) the number of businesses to which a loan or equity investment was made;
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new text begin (2) a description of businesses supported by the program;
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new text begin (3) demographic information as specified by the commissioner regarding each recipient;
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new text begin (4) an account of loans and equity investments made during the calendar year; and
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new text begin (5) the program's impact on job creation and retention.
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new text begin (b) The Minneapolis Foundation must establish and maintain a public website reporting
on the use of money and any relevant performance measures. Up to three percent of money
can be used by the Minneapolis Foundation for administration and monitoring of the program.
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new text begin (c) By February 15, 2026, the Minneapolis Foundation must complete an independent
audit of the use of money under this section in accordance with standard accounting practices.
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new text begin (d) This is a onetime appropriation and is available until June 30, 2026.
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