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SF 1463

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:21am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to economic development; establishing an investment fund for eligible
organizations; authorizing loans; 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.417] GREATER MINNESOTA BUSINESS DEVELOPMENT
INVESTMENT FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Eligible organization. new text end

new text begin For the purposes of this section, "eligible
organization" means an organization established pursuant to section 116J.415 that
provides business financing to greater Minnesota businesses.
new text end

new text begin Subd. 2. new text end

new text begin Investment fund establishment. new text end

new text begin The commissioner shall establish an
investment fund from which fund investments can be made in eligible organizations. The
funds repaid by the eligible organizations must be returned to the fund for subsequent
reinvestment in eligible organizations.
new text end

new text begin Subd. 3. new text end

new text begin Authorized investments. new text end

new text begin The commissioner may make investments in
eligible organizations. The commissioner shall invest funds in the form of loans to eligible
organizations for the purpose of providing capital to new and expanding businesses in the
form of debt or equity, or both.
new text end

new text begin Subd. 4. new text end

new text begin Investment authorized. new text end

new text begin The commissioner may make investments in
eligible organizations under the following terms:
new text end

new text begin (1) the organization seeking an investment of funds must guarantee repayment of not
less than 100 percent of the funds invested in the eligible organization;
new text end

new text begin (2) the investments must be made in the form of a loan to the eligible organization
for a term of ten years, at an interest rate of one percent;
new text end

new text begin (3) during the ten-year term of the loan, the eligible organization must make annual
interest-only payments;
new text end

new text begin (4) at the end of the ten-year term, the eligible organization must make a payment in
the entire principal amount of the initial loan;
new text end

new text begin (5) the state investment by the commissioner in any eligible organization must
not exceed $2,000,000;
new text end

new text begin (6) the full amount of state investment must be advanced to the approved eligible
organization upon execution of a formal investment agreement, specifying the terms of the
loan, as well as reporting and other requirements outlined in subdivision 5;
new text end

new text begin (7) the eligible organization must maintain the funds in accounts that allow the funds
to be readily available for business investments;
new text end

new text begin (8) the eligible organization must make business investments totaling the entire
amount of funds loaned by the state within three years of the execution of the investment
agreement and subsequent transmittal of the funds; and
new text end

new text begin (9) an eligible organization that receives an investment under this section must
report annually, in a format prescribed by the commissioner, the nature and amount of
the business investments made, including, for each financing transaction involving funds
received pursuant to this section, all forms and amounts of financing provided by the
eligible organization from sources other than the investment fund established pursuant to
this section, along with the number of jobs created and private sector investment leveraged.
new text end

new text begin Subd. 5. new text end

new text begin Requirements for state investments. new text end

new text begin All investments are subject to an
investment agreement which must include:
new text end

new text begin (1) a description of the eligible organization, including business finance experience,
qualifications, and investment history;
new text end

new text begin (2) a description of the uses of investment proceeds by the eligible organization;
new text end

new text begin (3) an explanation of the investment objectives;
new text end

new text begin (4) a description of accounting and reporting standards to be used by the eligible
organization; and
new text end

new text begin (5) a copy of the most recent audited financial statements of the eligible organization.
new text end

Sec. 2. new text begin APPROPRIATION.
new text end

new text begin $12,000,000 is appropriated in fiscal year 2010 from the general fund to the
commissioner of employment and economic development to provide loans authorized
under section 1. This appropriation is available until expended.
new text end