1.1                          A bill for an act
  1.2             relating to economic development; establishing a 
  1.3             microenterprise support program; changing the minimum 
  1.4             grant amount for certain other programs; appropriating 
  1.5             money; amending Minnesota Statutes 1994, sections 
  1.6             116M.18, subdivision 4; and 116N.08, subdivision 5; 
  1.7             proposing coding for new law in Minnesota Statutes, 
  1.8             chapter 116J. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  [116J.991] [MICROENTERPRISE SUPPORT PROGRAM.] 
  1.11     (a) The commissioner of trade and economic development 
  1.12  shall establish and implement a microenterprise support 
  1.13  program.  Within the limits of the appropriation for the 
  1.14  program, the commissioner shall make grants to nonprofit 
  1.15  organizations and state certified community development 
  1.16  corporations to engage in providing technical assistance and 
  1.17  lending to small, beginning businesses.  A micro loan under this 
  1.18  section must not exceed $10,000 for a single business entity or 
  1.19  entities with common ownership. 
  1.20     (b) Nonprofit organizations and state certified community 
  1.21  development corporations must apply for grants under this 
  1.22  section following procedures established by the commissioner.  
  1.23  The applications must include: 
  1.24     (1) the local need for microenterprise support; 
  1.25     (2) proposed criteria for business eligibility; 
  1.26     (3) proposals for identifying and serving eligible 
  1.27  businesses; 
  2.1      (4) description of technical assistance to be provided to 
  2.2   eligible businesses; and 
  2.3      (5) proposals to coordinate technical assistance with 
  2.4   financial assistance. 
  2.5      (c) The commissioner shall establish evaluation procedures 
  2.6   for the microenterprise support activities carried out with 
  2.7   grants provided under this section.  The evaluation shall 
  2.8   determine if the microenterprise support program should be 
  2.9   extended and expanded.  The commissioner shall report to the 
  2.10  legislature on the microenterprise support program by February 
  2.11  1, 1997.  The report shall contain an evaluation of the results, 
  2.12  recommendations to continue or change the program 
  2.13  recommendations on suggested program changes, and a suggested 
  2.14  level of funding. 
  2.15     Sec. 2.  Minnesota Statutes 1994, section 116M.18, 
  2.16  subdivision 4, is amended to read: 
  2.17     Subd. 4.  [BUSINESS LOAN CRITERIA.] (a) The criteria in 
  2.18  this subdivision apply to loans made under the urban challenge 
  2.19  grant program.  
  2.20     (b) Loans must be made to businesses that are not likely to 
  2.21  undertake a project for which loans are sought without 
  2.22  assistance from the urban challenge grant program.  
  2.23     (c) A loan must be used for a project designed to benefit 
  2.24  persons in low-income areas through the creation of job 
  2.25  opportunities for them.  Among loan applicants, priority must be 
  2.26  given on the basis of the number of permanent jobs created or 
  2.27  retained by the project and the proportion of nonpublic money 
  2.28  leveraged by the loan.  Priority must also be given for loans to 
  2.29  the lowest income areas.  
  2.30     (d) The minimum loan is $5,000 $1,000 and the maximum is 
  2.31  $150,000. 
  2.32     (e) With the approval of the commissioner, a loan may be 
  2.33  used to provide up to 50 percent of the private investment 
  2.34  required to qualify for a grant from the economic recovery 
  2.35  account.  
  2.36     (f) A loan must be matched by at least an equal amount of 
  3.1   new private investment.  
  3.2      (g) A loan may not be used for a retail development project.
  3.3      (h) The business must agree to work with job referral 
  3.4   networks that focus on minority applicants from low-income areas.
  3.5      Sec. 3.  Minnesota Statutes 1994, section 116N.08, 
  3.6   subdivision 5, is amended to read: 
  3.7      Subd. 5.  [LOAN CRITERIA.] The following criteria apply to 
  3.8   loans made under the challenge grant program:  
  3.9      (a) Loans must be made to businesses that are not likely to 
  3.10  undertake a project for which loans are sought without 
  3.11  assistance from the challenge grant program.  
  3.12     (b) A loan must be used for a project designed principally 
  3.13  to benefit low-income persons through the creation of job 
  3.14  opportunities for them.  Among loan applicants, priority must be 
  3.15  given on the basis of the number of permanent jobs created or 
  3.16  retained by the project and the proportion of nonstate money 
  3.17  leveraged by the revolving loan.  
  3.18     (c) The minimum loan is $5,000 $1,000 and the maximum is 
  3.19  $100,000. 
  3.20     (d) With the approval of the commissioner, a loan may be 
  3.21  used to provide up to 50 percent of the private investment 
  3.22  required to qualify for a grant from the economic recovery 
  3.23  account. 
  3.24     (e) A loan may not exceed 50 percent of the total cost of 
  3.25  an individual project.  
  3.26     (f) A loan may not be used for a retail development project.
  3.27     (g) A business applying for a loan must be sponsored by a 
  3.28  resolution of the governing body of the local governmental unit 
  3.29  within whose jurisdiction the project is located. 
  3.30     Sec. 4.  [MATCHING REQUIREMENT.] 
  3.31     Grants to private, nonprofit organizations and state 
  3.32  certified community development corporations under section 1 
  3.33  must be matched on a one-to-one basis by nonstate funds. 
  3.34     Sec. 5.  [APPROPRIATION.] 
  3.35     $....... is appropriated from the general fund to the 
  3.36  commissioner of trade and economic development for grants to 
  4.1   private, nonprofit organizations for microenterprise support 
  4.2   activities under section 1.  The appropriation does not lapse 
  4.3   but is available until expended.