HF 3389

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 03/18/2010 11:09am

A bill for an act
relating to economic development; creating the Minnesota Science and
Technology Authority; appropriating money; amending Laws 2009, chapter 78,
article 1, section 3, subdivision 2; proposing coding for new law as Minnesota
Statutes, chapter 116W; repealing Minnesota Statutes 2008, section 116J.657.

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

Section 1.

new text begin [116W.01] MINNESOTA SCIENCE AND TECHNOLOGY
AUTHORITY ACT.
new text end

new text begin This chapter may be cited as the "Minnesota Science and Technology Authority Act."
new text end

Sec. 2.

new text begin [116W.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin For the purposes of this chapter, the terms in this
section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Authority. new text end

new text begin "Authority" means the Minnesota Science and Technology
Authority.
new text end

new text begin Subd. 3. new text end

new text begin Eligible recipient. new text end

new text begin "Eligible recipient" means an entity primarily operating
to create and retain jobs in the state's industrial base and maximize the economic growth
of the state through:
new text end

new text begin (1) high-technology research and development capabilities;
new text end

new text begin (2) product and process innovation and commercialization;
new text end

new text begin (3) high-technology manufacturing capabilities;
new text end

new text begin (4) science and technology business environment; or
new text end

new text begin (5) science and technology workforce preparation.
new text end

new text begin Subd. 4. new text end

new text begin Advisory commission. new text end

new text begin "Advisory commission" means the advisory
commission under section 116W.051.
new text end

Sec. 3.

new text begin [116W.03] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin The Minnesota Science and Technology Authority
consists of the commissioner of employment and economic development, the
commissioner of management and budget, the commissioner of revenue, the commissioner
of commerce, and the commissioner of agriculture.
new text end

new text begin Subd. 2. new text end

new text begin Chair; other officers. new text end

new text begin The commissioner of employment and economic
development shall serve as the chair and chief executive officer of the authority. The
authority shall rotate the position of vice chair annually among its members. The
commissioner of employment and economic development shall convene the first meeting
of the authority no later than July 1, 2010. In the absence of the chair or vice chair at
meetings of the authority members may elect a chair for the meeting, and may elect other
officers as necessary from its members.
new text end

new text begin Subd. 3. new text end

new text begin Delegation. new text end

new text begin In addition to any powers to delegate that members of the
authority have as commissioners, they may delegate to the chair, vice chair, or executive
director their responsibilities as members of the authority for reviewing and approving
financing of eligible projects, projects that have been authorized by law, or programs
specifically authorized by resolution of the authority.
new text end

new text begin Subd. 4. new text end

new text begin Actions. new text end

new text begin (a) A majority of the authority, excluding vacancies, constitutes a
quorum to conduct its business, to exercise its powers, and for all other purposes.
new text end

new text begin (b) The authority may conduct its business by any technological means available,
including teleconference calls or interactive video, that allows for an interaction between
members. If a meeting is conducted under this paragraph, a specific location must be
available for the public to attend the meeting and at least one member must be present at
that location.
new text end

new text begin Subd. 5. new text end

new text begin Executive director; staffing. new text end

new text begin The authority shall employ an executive
director in the unclassified service. The initial executive director must be the individual in
the position of director of the Office of Science and Technology as of January 1, 2010,
under section 116J.657. The executive director is responsible for hiring staff necessary to
assist the executive director to carry out the duties and responsibilities of the authority.
The executive director shall perform duties that the authority may require in carrying out
its responsibilities to manage and implement the funds and programs in this chapter, and
comply with all state and federal program requirements, and state and federal securities
and tax laws and regulations. The executive director shall assist the advisory board in
fulfilling its duties under this chapter.
new text end

new text begin Subd. 6. new text end

new text begin Administrative services. new text end

new text begin The authority shall enter into agreements for
administrative and professional services and technical support.
new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin The authority is permanent and the provisions of section
15.059, subdivision 5, do not apply.
new text end

Sec. 4.

new text begin [116W.04] POWERS AND DUTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Duties. new text end

new text begin The Science and Technology Authority shall:
new text end

new text begin (1) coordinate public and private efforts to procure federal funding for collaborative
research and development projects of primary benefit to small-sized and medium-sized
businesses;
new text end

new text begin (2) promote contractual relationships between Minnesota businesses that are
recipients of federal grants and prime contractors, and Minnesota-based subcontractors;
new text end

new text begin (3) work with Minnesota nonprofit institutions including the University of
Minnesota, Minnesota State Colleges and Universities, and the Mayo Clinic in promoting
collaborative efforts to respond to federal funding opportunities;
new text end

new text begin (4) develop a framework for Minnesota companies to establish sole-source
relationships with federal agencies;
new text end

new text begin (5) provide grants or other forms of financial assistance to eligible recipients for
purposes of this chapter;
new text end

new text begin (6) coordinate workshops, assistance with business proposals, licensing, intellectual
property protection, commercialization, and government auditing with the University of
Minnesota and Minnesota State Colleges and Universities; and
new text end

new text begin (7) develop and implement a comprehensive science and technology economic
development strategy for the state.
new text end

new text begin Subd. 2. new text end

new text begin Technology matchmaking. new text end

new text begin The authority must assist businesses in
identifying qualified suppliers and vendors through a program to serve as a conduit for
Minnesota-based companies to network with firms able to support their success. Firms
outside Minnesota can participate in the technology matchmaking network if one of the
participating companies is located in Minnesota.
new text end

new text begin Subd. 3. new text end

new text begin Commercialization assistance. new text end

new text begin The authority must provide
commercialization assistance to Minnesota firms that have received a Phase I Small
Business Innovation Research (SBIR) or a Phase I Small Business Technology Transfer
(STTR) award and are submitting a Phase II proposal. Local service providers must assist
the applicant with developing and reviewing the required commercialization plan prior to
Phase II submission. The authority may provide SBIR Phase I proposal technical review.
new text end

new text begin Subd. 4. new text end

new text begin Power to sue; enter contracts. new text end

new text begin The authority may sue and be sued. The
authority may make and enter into contracts, leases, and agreements necessary to perform
its duties and exercise its powers.
new text end

new text begin Subd. 5. new text end

new text begin Gifts; grants. new text end

new text begin The authority may apply for, accept, and disburse gifts,
grants, loans, or other property from the United States, the state, private sources, or
any other source for any of its purposes. Money received by the authority under this
subdivision must be deposited in the state treasury and is appropriated to the authority to
carry out its duties.
new text end

new text begin Subd. 6. new text end

new text begin Contract for services. new text end

new text begin The authority may retain or contract for the
services of accountants, financial advisors, and other consultants or agents needed to
perform its duties and exercise its powers.
new text end

new text begin Subd. 7. new text end

new text begin Fees. new text end

new text begin The authority may set and collect fees for costs incurred by the
authority, the Department of Employment and Economic Development, the Department of
Management and Budget, the Department of Revenue, the Department of Commerce, the
Department of Labor and Industry, and the Department of Agriculture, including costs
for personnel, professional, and administrative services.
new text end

new text begin Subd. 8. new text end

new text begin Reports. new text end

new text begin (a) The authority shall report by February 1 each year to the
chairs and ranking minority members of the legislative committees and divisions with
jurisdiction over finance and economic development on its progress to design, coordinate,
and administer a strategic science and technology program for the state to promote the
welfare of the people of the state, maximize the economic growth of the state, and create
and retain jobs in the state's industrial base through enhancement of Minnesota's:
new text end

new text begin (1) high-technology research and development capabilities;
new text end

new text begin (2) product and process innovation and commercialization;
new text end

new text begin (3) high-technology manufacturing capabilities;
new text end

new text begin (4) science and technology business environment; and
new text end

new text begin (5) science and technology workforce preparation.
new text end

new text begin (b) The report must include a complete operating and financial statement covering
the authority's operations during the year, including amounts of income from all sources.
Books and records of the authority are subject to audit by the legislative auditor in the
manner prescribed for state agencies.
new text end

new text begin Subd. 9. new text end

new text begin Consultative and technical services. new text end

new text begin The authority may provide general
consultative and technical services to assist eligible projects and enter into agreements or
other transactions concerning the receipt or provision of those services.
new text end

new text begin Subd. 10. new text end

new text begin Financial information. new text end

new text begin Financial information, including credit reports,
financial statements, and net worth calculations, received or prepared by the authority
regarding financial assistance, is private data with regard to data on individuals as defined
in section 13.02, subdivision 12, and nonpublic data with regard to data not on individuals
as defined in section 13.02, subdivision 9.
new text end

new text begin Subd. 11. new text end

new text begin General. new text end

new text begin The authority shall have all powers necessary and appropriate to
fulfill its responsibilities under this chapter.
new text end

Sec. 5.

new text begin [116W.05] PROJECT FINANCIAL ASSISTANCE.
new text end

new text begin Subdivision 1. new text end

new text begin Determination of financial assistance. new text end

new text begin The authority shall assist
eligible recipients in identifying grants or other sources of financial assistance available to
finance projects and may assist eligible recipients in applying for and obtaining grants and
other forms of assistance.
new text end

new text begin Subd. 2. new text end

new text begin Financial feasibility review. new text end

new text begin (a) The authority shall review the proposed
financing for each project submitted to the authority to determine whether: (1) the
proposed project and financing plan is an eligible use of the money; and (2) the proposal is
in compliance with applicable state and federal tax and securities laws and regulations.
Grants in excess of $50,000 must be approved by the authority. Grants of $50,000 or less
may be authorized by the executive director. All grant approvals or disapprovals must
be completed within 30 days of submission to the authority. Grants approved by the
executive director must be reviewed by the authority each month.
new text end

new text begin (b) Unless a project is specifically authorized by law, the authority may reject the
proposed financing for a project meeting the requirements in paragraph (a) if there are not
sufficient funds available or if a majority of members believe the financing of the project
would not be in the best interests of the state or would be detrimental to the authority's
funds or programs. A determination to reject a proposed project must not be made in
an arbitrary and capricious manner and must be supported by substantive evidence and
documented by a resolution of the authority stating its findings.
new text end

Sec. 6.

new text begin [116W.051] ADVISORY COMMISSION.
new text end

new text begin Subdivision 1. new text end

new text begin Advisory commission membership. new text end

new text begin A Science and Technology
Initiative Advisory Commission of 17 members is established and is comprised of:
new text end

new text begin (1) two representatives of the University of Minnesota, selected by the president of
the university, including a faculty member actively involved in science and technology
research;
new text end

new text begin (2) a representative of Minnesota State Colleges and Universities, selected by the
chancellor;
new text end

new text begin (3) the chief executive officer of the Mayo Clinic or a designee;
new text end

new text begin (4) six chief executive officers or designees from science-oriented or
technology-oriented companies;
new text end

new text begin (5) four representatives from science-oriented and technology-oriented
organizations;
new text end

new text begin (6) one representative of organized labor;
new text end

new text begin (7) a venture capital representative; and
new text end

new text begin (8) a representative of angel investors.
new text end

new text begin A member must have experience in science or technology in order to serve on
the commission.
new text end

new text begin Members of the commission listed in clauses (4) to (8) shall be appointed by the
authority.
new text end

new text begin Subd. 2. new text end

new text begin Advisory commission duties. new text end

new text begin The advisory commission must assist the
authority in developing a comprehensive science and technology economic development
plan to be presented to the chairs and ranking minority members of the legislative
committees and divisions with jurisdiction over economic development by January
15, 2011. The plan must include recommendations in strategic areas for science and
technology investments, recommendations on additional programs to support science and
technology focused economic development activities in the state, selection of specific
programs and grantees for support from program funds authorized by the advisory
commission and ongoing assessment of the effectiveness of programmatic elements
according to metrics to be developed by the authority in consultation with the advisory
commission. The advisory commission may also advise and assist the authority in
fulfilling its duties under section 116W.04.
new text end

new text begin Subd. 3. new text end

new text begin Membership terms; vacancies; compensation. new text end

new text begin The membership terms,
removal of members, filling of vacancies and compensation of members are as provided
under section 15.059. The compensation required under this section must be paid by
the authority.
new text end

new text begin Subd. 4. new text end

new text begin Expiration. new text end

new text begin The advisory commission expires June 30, 2013.
new text end

new text begin Subd. 5. new text end

new text begin Convening of meetings; staffing. new text end

new text begin The executive director of the authority
must convene the first meeting of the commission by August 1, 2010. The executive
director must provide administrative support and staff to the commission.
new text end

Sec. 7.

new text begin [116W.20] MONEY OF THE AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Functions of commissioner of management and budget. new text end

new text begin Except
as otherwise provided in this section, money of the authority must be paid to the
commissioner of management and budget as agent of the authority and the commissioner
shall not commingle the money with other money. The money in the accounts of the
authority must be paid out only on warrants drawn by the commissioner of management
and budget on requisition of the executive director of the authority or of another officer or
employee as the authority authorizes. Deposits of the authority's money must, if required
by the commissioner or the authority, be secured by obligations of the United States or of
the state of a market value equal at all times to the amount of the deposit and all banks and
trust companies are authorized to give security for the deposits. All money paid to the
commissioner as agent of the authority is appropriated to the authority.
new text end

new text begin Subd. 2. new text end

new text begin System of accounts. new text end

new text begin The commissioner of management and budget shall
prescribe a system of accounts.
new text end

Sec. 8.

new text begin [116W.21] NONLIABILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Nonliability of individuals. new text end

new text begin No member of the authority, staff of
the authority, or other person executing other agreements or contracts of the authority is
liable personally or is subject to any personal liability or accountability by reason of their
issuance, execution, delivery, or performance.
new text end

new text begin Subd. 2. new text end

new text begin Nonliability of state. new text end

new text begin The state is not liable on loans or other agreements
or contracts of the authority issued or entered into under this chapter and the loans or
other agreements or contracts of the authority are not a debt of the state. The loans or
other agreements or contracts of the authority must contain on their face a statement
to that effect.
new text end

Sec. 9.

new text begin [116W.23] STATE PLEDGE AGAINST IMPAIRMENT OF CONTRACTS.
new text end

new text begin The state pledges and agrees with parties to any loans or other agreements or
contracts of the authority that the state will not: (1) limit or alter the rights vested in the
authority to fulfill the terms of any agreements made with the parties to any loans or other
agreements or contracts of the authority; or (2) in any way impair the rights and remedies
of the parties to any loans or other agreements or contracts of the authority. The authority
may include this pledge and agreement of the state in any agreement with the parties in
any loans or other agreements or contracts of the authority.
new text end

Sec. 10.

new text begin [116W.24] RESERVES; FUNDS; ACCOUNTS.
new text end

new text begin The authority may establish reserves, funds, or accounts necessary to carry out the
purposes of the authority or to comply with any agreement made by or any resolution
passed by the authority.
new text end

Sec. 11.

Laws 2009, chapter 78, article 1, section 3, subdivision 2, is amended to read:

Subd. 2. Business and Community Development

8,980,000

8,980,000

Appropriations by Fund
General	7,941,000	7,941,000
Remediation	700,000	700,000
Workforce Development	339,000	339,000

(a) $700,000 the first year and $700,000 the
second year are from the remediation fund for
contaminated site cleanup and development
grants under Minnesota Statutes, section
116J.554. This appropriation is available
until expended.

(b) $200,000 each year is from the general
fund for a grant to WomenVenture for
women's business development programs
and for programs that encourage and assist
women to enter nontraditional careers in the
trades; manual and technical occupations;
science, technology, engineering, and
mathematics-related occupations; and green
jobs. This appropriation may be matched
dollar for dollar with any resources available
from the federal government for these
purposes with priority given to initiatives
that have a goal of increasing by at least ten
percent the number of women in occupations
where women currently comprise less than 25
percent of the workforce. The appropriation
is available until expended.

(c) $105,000 each year is from the general
fund and $50,000 each year is from the
workforce development fund for a grant to
the Metropolitan Economic Development
Association for continuing minority business
development programs in the metropolitan
area. This appropriation must be used for the
sole purpose of providing free or reduced
fee business consulting services to minority
entrepreneurs and contractors.

(d)(1) $500,000 each year is from the
general fund for a grant to BioBusiness
Alliance of Minnesota for bioscience
business development programs to promote
and position the state as a global leader
in bioscience business activities. This
appropriation is added to the department's
base. These funds may be used to create,
recruit, retain, and expand biobusiness
activity in Minnesota; implement the
destination 2025 statewide plan; update
a statewide assessment of the bioscience
industry and the competitive position of
Minnesota-based bioscience businesses
relative to other states and other nations;
and develop and implement business and
scenario-planning models to create, recruit,
retain, and expand biobusiness activity in
Minnesota.

(2) The BioBusiness Alliance must report
each year by February 15 to the committees
of the house of representatives and the senate
having jurisdiction over bioscience industry
activity in Minnesota on the use of funds;
the number of bioscience businesses and
jobs created, recruited, retained, or expanded
in the state since the last reporting period;
the competitive position of the biobusiness
industry; and utilization rates and results of
the business and scenario-planning models
and outcomes resulting from utilization of
the business and scenario-planning models.

(e)(1) Of the money available in the
Minnesota Investment Fund, Minnesota
Statutes, section 116J.8731, to the
commissioner of the Department of
Employment and Economic Development,
up to $3,000,000 is appropriated in fiscal year
2010 for a loan to an aircraft manufacturing
and assembly company, associated with the
aerospace industry, for equipment utilized
to establish an aircraft completion center
at the Minneapolis-St. Paul International
Airport. The finishing center must use the
state's vocational training programs designed
specifically for aircraft maintenance training,
and to the extent possible, work to recruit
employees from these programs. The center
must create at least 200 new manufacturing
jobs within 24 months of receiving the
loan, and create not less than 500 new
manufacturing jobs over a five-year period
in Minnesota.

(2) This loan is not subject to loan limitations
under Minnesota Statutes, section 116J.8731,
subdivision 5. Any match requirements
under Minnesota Statutes, section 116J.8731,
subdivision 3, may be made from current
resources. This is a onetime appropriation
and is effective the day following final
enactment.

(f) $65,000 each year is from the general
fund for a grant to the Minnesota Inventors
Congress, of which at least $6,500 must be
used for youth inventors.

(g) $200,000 the first year deleted text begin and $200,000
the second year are deleted text end new text begin is new text end for the Office of
Science and Technology. This is a onetime
appropriation.

(h) $500,000 the first year and $500,000 the
second year are for a grant to Enterprise
Minnesota, Inc., for the small business
growth acceleration program under
Minnesota Statutes, section 116O.115. This
is a onetime appropriation and is available
until expended.

(i)(1) $100,000 each year is from the
workforce development fund for a grant
under Minnesota Statutes, section 116J.421,
to the Rural Policy and Development
Center at St. Peter, Minnesota. The grant
shall be used for research and policy
analysis on emerging economic and social
issues in rural Minnesota, to serve as a
policy resource center for rural Minnesota
communities, to encourage collaboration
across higher education institutions, to
provide interdisciplinary team approaches
to research and problem-solving in rural
communities, and to administer overall
operations of the center.

(2) The grant shall be provided upon the
condition that each state-appropriated
dollar be matched with a nonstate dollar.
Acceptable matching funds are nonstate
contributions that the center has received and
have not been used to match previous state
grants. Any funds not spent the first year are
available the second year.

(j) Notwithstanding Minnesota Statutes,
section 268.18, subdivision 2, $414,000 of
funds collected for unemployment insurance
administration under this subdivision is
appropriated as follows: $250,000 to Lake
County for ice storm damage; $64,000 is for
the city of Green Isle for reimbursement of
fire relief efforts and other expenses incurred
as a result of the fire in the city of Green Isle;
and $100,000 is to develop the construction
mitigation pilot program to make grants for
up to five projects statewide available to local
government units to mitigate the impacts of
transportation construction on local small
business. These are onetime appropriations
and are available until expended.

(k) Up to $10,000,000 is appropriated
from the Minnesota minerals 21st century
fund to the commissioner of Iron Range
resources and rehabilitation to make a grant
or forgivable loan to a manufacturer of
windmill blades at a facility to be located
within the taconite tax relief area defined in
Minnesota Statutes, section 273.134.

(l) $1,000,000 is appropriated from the
Minnesota minerals 21st century fund to
the Board of Trustees of the Minnesota
State Colleges and Universities for a grant
to the Northeast Higher Education District
for planning, design, and construction of
classrooms and housing facilities for upper
division students in the engineering program.

(m)(1) $189,000 each year is appropriated
from the workforce development fund for
grants of $63,000 to eligible organizations
each year to assist in the development of
entrepreneurs and small businesses. Each
state grant dollar must be matched with $1
of nonstate funds. Any balance in the first
year does not cancel but is available in the
second year.

(2) Three grants must be awarded to
continue or to develop a program. One
grant must be awarded to the Riverbend
Center for Entrepreneurial Facilitation
in Blue Earth County, and two to other
organizations serving Faribault and Martin
Counties. Grant recipients must report to the
commissioner by February 1 of each year
that the organization receives a grant with the
number of customers served; the number of
businesses started, stabilized, or expanded;
the number of jobs created and retained; and
business success rates. The commissioner
must report to the house of representatives
and senate committees with jurisdiction
over economic development finance on the
effectiveness of these programs for assisting
in the development of entrepreneurs and
small businesses.

Sec. 12. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund in fiscal year 2011 to the Minnesota
Science and Technology Authority for the purposes of Minnesota Statutes, chapter 116W.
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 116J.657, new text end new text begin is repealed.
new text end

Sec. 14. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 13 are effective July 1, 2010.
new text end