1.1                          A bill for an act 
  1.2             relating to economic development; modifying and 
  1.3             requesting a legislative audit of the economic 
  1.4             recovery grant program; amending Minnesota Statutes 
  1.5             1994, section 116J.873, subdivision 3, and by adding a 
  1.6             subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 116J.873, 
  1.9   subdivision 3, is amended to read: 
  1.10     Subd. 3.  [GRANT EVALUATION.] The commissioner shall 
  1.11  accept, review, and evaluate applications for grants to local 
  1.12  units of government made in accordance with rules adopted for 
  1.13  economic development grants in the small cities development 
  1.14  program.  Projects must be evaluated based on the existence of 
  1.15  the following conditions: 
  1.16     (1) whether assistance is necessary to provide equity to 
  1.17  business owners who do not have the capacity to invest in a 
  1.18  project; 
  1.19     (2) whether there is an inability to secure sufficient 
  1.20  financing from other public or private sources at market 
  1.21  interest rates or on favorable market terms; 
  1.22     (3) whether assistance is necessary to attract out-of-state 
  1.23  businesses or to retain existing business within the state; and 
  1.24     (4) whether there are excessive public infrastructure or 
  1.25  improvement costs beyond the means of the affected community and 
  1.26  private participants in the project. 
  2.1      A grant or loan cannot be made based solely on a finding 
  2.2   that the condition in clause (3) exists.  A finding must be made 
  2.3   that a condition in clause (1), (2), or (4) also exists. 
  2.4      Applications recommended for funding shall be submitted to 
  2.5   the commissioner. 
  2.6      Sec. 2.  Minnesota Statutes 1994, section 116J.873, is 
  2.7   amended by adding a subdivision to read: 
  2.8      Subd. 5.  [SPORTS FACILITY.] An economic recovery grant or 
  2.9   loan cannot be used for a project related to a sports facility.  
  2.10  For the purpose of this subdivision, "sports facility" means a 
  2.11  building that has a professional sports team as a principal 
  2.12  tenant. 
  2.13     Sec. 3.  [LEGISLATIVE AUDITOR; ECONOMIC RECOVERY GRANT 
  2.14  PROGRAM.] 
  2.15     The legislative audit commission is requested to direct the 
  2.16  legislative auditor to conduct an evaluation of the economic 
  2.17  recovery grant program under Minnesota Statutes, section 
  2.18  116J.873.  The evaluation must include an audit of loans and 
  2.19  grants made under the program and the criteria used in selecting 
  2.20  projects for grants and loans.  The legislative auditor shall 
  2.21  report the results of the evaluation to the legislature by 
  2.22  January 15, 1996.