SF 280

as introduced - 90th Legislature (2017 - 2018) Posted on 01/24/2017 08:26am

A bill for an act
relating to economic development; creating a new markets grant program;
authorizing rulemaking; 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.952] NEW MARKETS GRANT PROGRAM.
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new text begin Subdivision 1. new text end

new text begin Grant program established. new text end

new text begin The commissioner shall award new markets
grants for qualified low-income community investments as specified under this section.
The commissioner shall adopt rules to establish criteria for determining grant eligibility.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in paragraphs (b) to (i)
have the meanings given them.
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new text begin (b) "Applicant" means a qualified community development entity as defined in paragraph
(h).
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new text begin (c) "Commissioner" means the commissioner of employment and economic development.
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new text begin (d) "Greater Minnesota" means the area of the state that excludes the metropolitan area,
as defined in section 473.121, subdivision 2.
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new text begin (e) "Internal Revenue Code" has the meaning given in section 290.01, subdivision 31.
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new text begin (f) "Low-income communities" as defined in section 45D of the Internal Revenue Code
and applied to any term or requirement used in this section or an incorporated provision of
federal law includes the area of any home rule charter or statutory city that:
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new text begin (1) is located in greater Minnesota;
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new text begin (2) has a population, as defined in section 477A.011, subdivision 3, of 500 or more; and
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new text begin (3) has net tax capacity of property, classified as class 3 under section 273.13, of less
than $500 per capita for property taxes assessed in 2015, payable in 2016, including the
city's distribution net tax capacity and excluding its contribution net tax capacity under
chapter 276A.
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new text begin (g) "Qualified active low-income community business" has the meaning given in United
States Code, title 26, section 45D, of the Internal Revenue Code. The term does not include:
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new text begin (1) any trade or business engaged in insurance, banking, lending, lobbying, political
consulting, or leisure; or
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new text begin (2) any trade or business activity consisting of the operation of any private or commercial
golf course, country club, suntan facility, hot-tub facility, massage parlor, racetrack, or other
facility used for gambling, or any store the principal business of which is the sale of alcoholic
beverages for consumption off premises.
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new text begin (h) "Qualified community development entity" has the meaning given in section 45D
of the Internal Revenue Code, provided that the entity has direct lending experience serving
businesses in disadvantaged communities in the state and a primary mission of economic
development.
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new text begin (i) "Qualified low-income community investment" means any capital or equity investment
in, or loan to, any qualified active low-income community business.
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new text begin Subd. 3. new text end

new text begin Grant awards. new text end

new text begin The commissioner shall award grants to qualified community
development entities based on a competitive review of applications received by the
commissioner using criteria established in subdivision 4.
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new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin (a) The commissioner shall develop an application form requiring
information necessary to evaluate the benefits to Minnesota from awarding the grants.
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new text begin (b) Prior to awarding grants to an applicant under this subdivision, the commissioner
shall consider the following:
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new text begin (1) whether the qualified community development entity has demonstrated experience
providing capital or technical assistance to disadvantaged businesses or communities in the
state;
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new text begin (2) the extent to which an applicant demonstrates direct experience in asset and risk
management and in fulfilling government compliance requirements;
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new text begin (3) the extent to which an applicant demonstrates a capitalization strategy that ensures
that the economic benefit of the grant allocation remains in the state;
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new text begin (4) the extent to which the applicant establishes standards for wages and benefits
exceeding federal poverty guidelines and includes a means by which to monitor and measure
ongoing compliance with those standards;
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new text begin (5) the financial contributions expected to be made to the project from nonstate sources;
and
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new text begin (6) any other criteria the commissioner deems necessary.
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new text begin Subd. 5. new text end

new text begin Annual reporting by community development entity. new text end

new text begin A community
development entity that has been awarded a grant must submit an annual report to the
commissioner within 180 days after the end of the fiscal year. The report must include
information on investments made in the preceding year, including but not limited to the
following:
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new text begin (1) the types of industries, identified by the North American Industry Classification
System Code, in which a qualified low-income community investment was made;
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new text begin (2) the names of the counties in which the qualified active low-income community
businesses are located that received qualified low-income community investments;
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new text begin (3) the number of jobs created and retained by qualified active low-income community
businesses receiving qualified low-income community investments, including verification
that the average wages and benefits paid to full-time employees, based on an hourly wage
for a 40-hour work week, meet or exceed 105 percent of the federal poverty income
guidelines for a family of four; and
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new text begin (4) other information and documentation required by the commissioner to verify continued
certification as a qualified community development entity under United States Code, title
26, section 45D, of the Internal Revenue Code.
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new text begin Subd. 6. new text end

new text begin Application fees; fund created. new text end

new text begin The qualified community development entity
must submit a nonrefundable application fee at the time the application is submitted equal
to the amount published in the Minnesota new markets grant program application. The
commissioner may allow up to 25 percent of the fee to be submitted up to 180 days following
the grant award and up to 25 percent of the fee to be submitted up to 270 days following
the grant award. Application fees shall be deposited in the new markets grant program
administration account in the special revenue fund.
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new text begin Subd. 7. new text end

new text begin Administrative fees. new text end

new text begin Upon the issuance of a qualified low-income community
investment by a qualified community development entity, an administrative fee in an amount
determined by the commissioner and published in the grant agreement must be deposited
in the new markets grant program administration account in the special revenue fund.
new text end

new text begin Subd. 8. new text end

new text begin Administrative expenses. new text end

new text begin Amounts in the new markets grant program
administration account are annually appropriated to the commissioner for administrative
expenses related to administering the new markets grant program in this section.
new text end

new text begin Subd. 9. new text end

new text begin Annual report. new text end

new text begin Beginning in 2020 and ending in 2023, the commissioner shall
annually, by January 15, report to the chairs and ranking minority members of the legislative
committees on economic development on the implementation of the grant program, including
an evaluation of the success and economic impact of the program in the state. The report
must include:
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new text begin (1) the number of women-owned and minority-owned businesses assisted by the grants;
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new text begin (2) the number of businesses located in greater Minnesota assisted by the grants and the
amount of that assistance;
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new text begin (3) the number of businesses located in the metropolitan area assisted by the grants and
the amount of that assistance;
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new text begin (4) the number of jobs created by the grants, including the number of women and
minorities obtaining jobs; and
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new text begin (5) the number of jobs created by the grants located in greater Minnesota and in the
metropolitan area.
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new text begin Subd. 10. new text end

new text begin Expiration. new text end

new text begin This section expires the earlier of July 1, 2024, or when the last
of the grant funds have been awarded. The commissioner must adopt rules for implementing
this section to allow grant awards to begin by January 1, 2018.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2018.
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Sec. 2. new text begin APPROPRIATION.
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new text begin $30,000,000 in fiscal year 2018 is appropriated from the general fund to the commissioner
of employment and economic development for the new markets grant program under
Minnesota Statutes, section 116J.952. This is a onetime appropriation and is available until
June 30, 2024. The commissioner may award grants of up to $10,000,000 per fiscal year.
new text end