SF 2063

as introduced - 90th Legislature (2017 - 2018) Posted on 03/14/2017 09:57am

A bill for an act
relating to economic development; capital improvements; creating a state research
and development authority; establishing a research and development fund;
authorizing the sale and issuance of state bonds; requiring reports; appropriating
money; proposing coding for new law in Minnesota Statutes, chapter 116W.

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

ARTICLE 1

RESEARCH AND DEVELOPMENT AUTHORITY

Section 1.

new text begin [116W.35] MINNESOTA RESEARCH AND DEVELOPMENT
AUTHORITY ACT.
new text end

new text begin Sections 116W.35 to 116W.58 may be cited as the "Minnesota Research and Development
Authority Act."
new text end

Sec. 2.

new text begin [116W.36] 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 Advisory commission. new text end

new text begin "Advisory commission" means the advisory commission
under section 116W.41.
new text end

new text begin Subd. 3. new text end

new text begin Authority. new text end

new text begin "Authority" means the Minnesota Research and Development
Authority under section 116W.37.
new text end

new text begin Subd. 4. 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 key sectors of the state's industrial base and maximize the economic
growth of the state through enhancement of Minnesota's:
new text end

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

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

new text begin (3) manufacturing capabilities; or
new text end

new text begin (4) workforce training and preparation.
new text end

new text begin Subd. 5. new text end

new text begin Key sectors. new text end

new text begin "Key sectors" means:
new text end

new text begin (1) health and life sciences;
new text end

new text begin (2) food science and technology;
new text end

new text begin (3) water, natural resources, and environmental science and technology;
new text end

new text begin (4) advanced manufacturing and technology;
new text end

new text begin (5) energy technology and production;
new text end

new text begin (6) computer science and information technology; and
new text end

new text begin (7) financial services.
new text end

new text begin The authority must periodically reassess whether the list of key sectors under this subdivision
should be modified and shall make recommendations to the legislature regarding proposed
modifications.
new text end

Sec. 3.

new text begin [116W.37] MINNESOTA RESEARCH AND DEVELOPMENT AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin The Minnesota Research and Development Authority
consists of the commissioner of employment and economic development, the commissioner
of management and budget, the commissioner of revenue, the commissioner of commerce,
the commissioner of agriculture, the president of the University of Minnesota, and the
chancellor of the Minnesota State Colleges and Universities system.
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 30, 2017. 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, the commissioners 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 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 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 required by the authority in carrying out its
responsibilities to manage and implement the funds and programs in sections 116W.35 to
116W.58, 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 sections 116.35 to 116W.58.
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 This section expires June 30, 2027.
new text end

Sec. 4.

new text begin [116W.38] INFORMATION TECHNOLOGY.
new text end

new text begin To the extent the projects or grants approved by the authority or other work of the
authority impact state information systems, these information systems are subject to the
jurisdiction of the Office of MN.IT Services under chapter 16E.
new text end

Sec. 5.

new text begin [116W.39] 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 Minnesota Research and Development Authority shall design,
coordinate, and administer a strategic research and development enhancement and investment
program to maximize the economic growth of the state and create and retain jobs in key
sectors of the state's economic and industrial base through development of the state's research
and development capabilities including, but not limited to, investment in physical plant,
laboratories, and other infrastructure; increased translational research activities; product
and process innovation and commercialization; expanded manufacturing capabilities; and
workforce training and preparation. The authority must:
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- 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, the Hormel Institute, 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 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 research and development enhancement
and investment 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) award 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 Entrepreneurship incubator laboratories. new text end

new text begin (a) The authority shall establish
at least three entrepreneurship incubator laboratories in Minnesota. An entrepreneurship
incubator laboratory is an organization designed to accelerate the growth and success of
new businesses and business ideas in key sectors through an array of business support
resources and services that include physical space, laboratory and other scientific equipment,
capital, coaching, common services, and a location and process for networking.
new text end

new text begin (b) The authority must work with private sector entities in establishing the
entrepreneurship incubator laboratories. The authority may expend money on the
entrepreneurship incubator laboratory only to the extent that a 100 percent match from a
nonpublic source is provided. Entities providing the nonpublic source match for an
entrepreneurship incubator laboratory shall become members of the advisory board for that
laboratory. The authority, the state of Minnesota, and private entities working in conjunction
with the state shall not require any proprietary interest in businesses or business ideas
generated within the entrepreneurship incubator laboratory as a condition of receiving
services.
new text end

new text begin (c) The authority, in consultation with the advisory board for each entrepreneurship
incubator laboratory, shall establish public criteria for applications to gain access to the
services of each entrepreneurship incubator laboratory.
new text end

new text begin (d) At least one entrepreneurship incubator laboratory shall be located in the 11-county
metropolitan area, as defined in section 200.02, subdivision 24, and at least two of the
incubator laboratories shall be located outside the 11-county metropolitan area. The authority
may work with existing entities who provide similar services to expand or support those
entities to meet the requirements of this section.
new text end

new text begin Subd. 5. 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. 6. 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 Minnesota research and development fund under section 116W.55, and is
appropriated to the authority to carry out its duties.
new text end

new text begin Subd. 7. 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. 8. new text end

new text begin Fees. new text end

new text begin The authority may establish and collect fees, subject to legislative approval,
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. 9. 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 research and development enhancement and investment 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 key sectors of the state's economic and industrial base through
enhancement of Minnesota's:
new text end

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

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

new text begin (3) expanded manufacturing capabilities; and
new text end

new text begin (4) workforce training and 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. 10. 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. 11. 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 on individuals as defined in section 13.02,
subdivision 12, and nonpublic data on individuals as defined in section 13.02, subdivision
9.
new text end

new text begin Subd. 12. 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. 6.

new text begin [116W.40] 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. 7.

new text begin [116W.41] 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) A Research and Development
Initiative Advisory Commission is established and is comprised of:
new text end

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

new text begin (2) two representatives of the Minnesota State Colleges and Universities, selected by
the chancellor, including a faculty member actively involved in research and development;
new text end

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

new text begin (4) the president or a designee of the Minnesota High Tech Association or its successor
organization;
new text end

new text begin (5) the executive director of the Hormel Institute or a designee;
new text end

new text begin (6) the president or a designee of the Medical Alley Association;
new text end

new text begin (7) the executive director of the Agricultural Utilization Research Institute or a designee;
new text end

new text begin (8) six chief executive officers or designees from research-oriented or technology-oriented
companies;
new text end

new text begin (9) four representatives from research-oriented or technology-oriented organizations;
new text end

new text begin (10) two representatives of organized labor;
new text end

new text begin (11) a venture capital representative;
new text end

new text begin (12) a representative of angel investors; and
new text end

new text begin (13) other members deemed appropriate by the authority in consultation with the
governor.
new text end

new text begin (b) A member must have experience in research and development in order to serve on
the commission.
new text end

new text begin (c) Members of the commission listed in clauses (6) to (11) 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 research and development enhancement and investment
plan to be presented to the chairs and ranking minority members of the legislative committees
and divisions with jurisdiction over economic development and higher education by January
15, 2018. The plan must include recommendations in strategic areas for research and
development investments, recommendations on additional programs to support research
and development-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.39.
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, and filling of vacancies are as provided under section 15.059, unless
specified otherwise. The executive director may provide compensation to members if funds
are available.
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, 2027.
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 September 1, 2017. The executive director
must provide administrative support and staff to the commission.
new text end

Sec. 8.

new text begin [116W.42] 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. The commissioner
must annually report to the committees of the legislature with responsibility for economic
development and management and budget on the use of appropriations under this section.
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. 9.

new text begin [116W.43] 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. 10.

new text begin [116W.44] 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:
new text end

new text begin (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
new text end

new text begin (2) in any way impair the rights and remedies of the parties to any loans or other
agreements or contracts of the authority.
new text end

new text begin 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. 11.

new text begin [116W.45] 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

ARTICLE 2

RESEARCH AND DEVELOPMENT PROGRAM

Section 1.

new text begin [116W.46] CITATION.
new text end

new text begin Sections 116W.46 to 116W.58 may be cited as the "Minnesota Research and Development
Program."
new text end

Sec. 2.

new text begin [116W.47] 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 sections 116W.46 to 116W.58, 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 Research and Development
Authority established under section 116W.37.
new text end

new text begin Subd. 3. new text end

new text begin College or university. new text end

new text begin "College or university" means an institution of
postsecondary education, public or private, that grants undergraduate or postgraduate
academic degrees and conducts significant research or development activities within key
sectors of the state's economic and industrial base.
new text end

new text begin Subd. 4. new text end

new text begin Commercialization. new text end

new text begin "Commercialization" means any of the full spectrum of
activities required for a new technology, product, or process to be developed from its basic
research or conceptual stage through applied research or development to the marketplace
including, without limitation, the steps leading up to and including licensure, sales, and
services.
new text end

new text begin Subd. 5. new text end

new text begin Commercialized research project. new text end

new text begin "Commercialized research project" means
research conducted within a college or university, nonprofit research institution, or by a
qualified research and development company that has shown advanced commercial potential
through license agreements, patents, or other forms of invention disclosure, and by which
a qualified research and development company has been or is being currently formed.
new text end

new text begin Subd. 6. new text end

new text begin Fund. new text end

new text begin "Fund" means the Minnesota research and development fund under
section 116W.55.
new text end

new text begin Subd. 7. new text end

new text begin Nonprofit research institution. new text end

new text begin "Nonprofit research institution" means an
entity with its principal place of business in Minnesota, that qualifies under section 501(c)
of the Internal Revenue Code, and that conducts significant research or development activities
in this state in key sectors of the state's economic and industrial base.
new text end

new text begin Subd. 8. new text end

new text begin Program. new text end

new text begin "Program" means the Minnesota research and development program.
new text end

new text begin Subd. 9. new text end

new text begin Qualified research and development company. new text end

new text begin "Qualified research and
development company" means a corporation, limited liability company, S corporation,
partnership, limited liability partnership, or sole proprietorship with fewer than 100
employees that is engaged in research and development or the production of products,
processes, or services for specific commercial or public purposes within key sectors of the
state's economic and industrial base.
new text end

Sec. 3.

new text begin [116W.48] COMMERCIALIZED RESEARCH PROGRAM.
new text end

new text begin (a) The authority may establish a commercialized research program to accelerate the
commercialization of research and development products, processes, or services from
colleges or universities, nonprofit research institutions, or qualified research and development
companies that leads to an increase in business activity and jobs in key sectors of the state's
economic and industrial base. The program must:
new text end

new text begin (1) provide research and development gap funding of up to $500,000 per research and
development project to assist in the commercialization and transfer of research and
development projects from a college or university or nonprofit research institution to a
qualified research and development company;
new text end

new text begin (2) provide funding of up to $250,000 for early stage development for qualified research
and development companies to conduct commercialized research projects; and
new text end

new text begin (3) provide funding of up to $500,000 for loans to provide start-up capital to early stage
companies in key sectors of the state's economic and industrial base.
new text end

new text begin (b) All activities under the commercialized research program require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) matching funds by the participating qualified research and development company,
college or university, or nonprofit research institution;
new text end

new text begin (3) that no more than 15 percent of the funds awarded by the authority may be used for
administrative costs; and
new text end

new text begin (4) a report by the participating qualified research and development company, college
or university, or nonprofit research institution that provides documentation of the use of
funds and outcomes of the award. The report must be submitted to the authority within one
calendar year of the date of the award.
new text end

Sec. 4.

new text begin [116W.49] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT
PROGRAM.
new text end

new text begin (a) The authority may establish a federal research and development support program to
increase and coordinate efforts to procure federal funding for research projects of primary
benefit to qualified research and development companies, colleges or universities, and
nonprofit research institutions. The program must:
new text end

new text begin (1) develop and execute a strategy to identify specific federal agencies and programs
that support the growth of research and development in key sectors of the state's economic
and industrial base; and
new text end

new text begin (2) provide grants to qualified research and development companies:
new text end

new text begin (i) to assist in the development of federal Small Business Innovation (SBIR) or Small
Business Technology Transfer (STTR) proposals; and
new text end

new text begin (ii) to match funds received through SBIR or STTR awards. No more than $1,500,000
may be awarded in a year for matching grants under this item.
new text end

new text begin (b) All activities under the federal research and development support program require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) matching funds by the participating qualified research and development company,
college or university, or nonprofit research institution;
new text end

new text begin (3) that no more than 15 percent of the funds awarded by the authority may be used for
administrative costs; and
new text end

new text begin (4) a report by the participating qualified research and development company, college
or university, or nonprofit research institution that provides documentation of the use of
funds and outcomes of the award. The report must be submitted to the authority within one
calendar year of the date of the award.
new text end

Sec. 5.

new text begin [116W.50] INDUSTRIAL TECHNOLOGY INNOVATION AND
COMPETITIVENESS PROGRAM.
new text end

new text begin (a) The authority may establish an industrial technology innovation and competitiveness
program to advance the technological capacity and competitiveness of existing and emerging
research and development industries. The program must:
new text end

new text begin (1) provide matching funds to programs and organizations that assist entrepreneurs in
starting and growing qualified research and development companies, including but not
limited to matching funds for mentoring programs, consulting and technical services, and
related activities;
new text end

new text begin (2) fund initiatives that retain engineering, science, technology, and mathematical
occupations in the state, including but not limited to internships, mentoring, and support of
industry and professional organizations; and
new text end

new text begin (3) fund initiatives that support the growth of targeted industry clusters in key sectors
and the competitiveness of existing qualified research and development companies in
developing and marketing new products and services.
new text end

new text begin (b) All activities under the industrial technology innovation and competitiveness program
shall require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
and
new text end

new text begin (2) a report by each award recipient providing documentation on the use of the funds
and outcomes of the award. The report must be submitted to the authority within one calendar
year from the date of the award.
new text end

Sec. 6.

new text begin [116W.51] CAPITAL INNOVATIONS PROGRAM.
new text end

new text begin (a) The authority may establish a capital innovations program to provide grants to
maintain and strengthen the state's position as a leader in key sectors of the economic and
industrial base throughout the state. Grants may be used to construct or improve infrastructure
for new research, development, and innovation activities at or conducted in partnership with
public and private institutions. The authority shall give priority to projects that restore,
develop or construct research, development, and innovation infrastructure throughout the
state. Preference must be given to projects that include at least a ... percent match of nonstate
funds.
new text end

new text begin (b) All activities under the capital innovations program require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) matching funds by award recipients;
new text end

new text begin (3) unless otherwise prohibited, up to 15 percent of the funds awarded by the authority
may be used for administrative costs; and
new text end

new text begin (4) a report by each award recipient that provides documentation of the use of funds and
outcomes of the award. The report must be submitted to the authority within one calendar
year of the date of the award.
new text end

Sec. 7.

new text begin [116W.52] MINNESOTA SCIENCE, TECHNOLOGY, ENGINEERING,
MATH, AND MANUFACTURING (STEMM) GRANT PROGRAM.
new text end

new text begin (a) The authority may establish a Minnesota science, technology, engineering, math,
and manufacturing (STEMM) grant program to provide equipment and supplies to support
STEMM education and training programs, including education and training in the
technological skills needed for manufacturing jobs, for students in grades 7 through 12 who
are enrolled in eligible schools located in Minnesota or receiving STEMM education and
training programs or services from nonprofit organizations. For the purposes of this section,
"eligible school" means a public school or nonpublic school that is accredited by an
accrediting agency recognized according to section 123B.445, or recognized by the
commissioner of education. The maximum grant award under this section may not exceed
$100,000 per eligible school. Applicants seeking funding in excess of $50,000 must
demonstrate the availability of nonpublic matching funds provided by an industry partner
or foundation.
new text end

new text begin (b) All activities under paragraph (a) require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) that no more than 15 percent of the funds awarded by the authority may be used for
administrative costs; and
new text end

new text begin (3) a report by the participating school or nonprofit organization that provides
documentation of the use of funds and outcomes of the award. The report must be submitted
to the authority within one calendar year of the date of the award.
new text end

Sec. 8.

new text begin [116W.53] HIGH SCHOOL OPPORTUNITY INTERNSHIP PROGRAM.
new text end

new text begin (a) The authority may establish a high school opportunity internship program to provide
opportunities for high school age students to observe and experience manufacturing,
laboratory, and other job environments in key sector industries. The authority must work
with eligible schools, host companies, and other organizations to implement the program.
new text end

new text begin (b) All activities under paragraph (a) require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) matching funds by the participating eligible school or nonprofit organization;
new text end

new text begin (3) that no more than 15 percent of the funds awarded by the authority may be used for
administrative costs; and
new text end

new text begin (4) a report by the participating schools, host companies, or nonprofit organization that
provides documentation of the use of funds and outcomes of the award. The report must be
submitted to the authority within one calendar year of the date of the award.
new text end

Sec. 9.

new text begin [116W.54] CHALLENGE INTERNSHIP PROGRAM.
new text end

new text begin (a) The authority may establish a grant program to promote science, technology,
engineering, math, and manufacturing internship opportunities for young adults aged 18 to
25. The program shall match young adults with paid internships within STEMM disciplines
at companies operating in key sector industries throughout the state. Host companies may
receive up to 50 percent of wages paid to an intern. The authority must develop an evaluation
of the internship program that includes information about postinternship employment.
new text end

new text begin (b) All activities under paragraph (a) require:
new text end

new text begin (1) written criteria set by the authority for the application, award, and use of the funds;
new text end

new text begin (2) that no more than 15 percent of the funds awarded by the authority may be used for
administrative costs; and
new text end

new text begin (3) a report by each award recipient that provides documentation of the use of funds and
outcomes of the award. The report must be submitted to the authority within one calendar
year of the date of the award.
new text end

Sec. 10.

new text begin [116W.55] MINNESOTA RESEARCH AND DEVELOPMENT FUND.
new text end

new text begin (a) A Minnesota research and development fund is created in the state treasury. The
fund is a direct-appropriated special revenue fund. 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 fund 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 a designee.
new text end

new text begin (b) Funds available to the authority under this section may be expended by the authority
for any purpose authorized under this chapter.
new text end

Sec. 11.

new text begin [116W.56] MINNESOTA RESEARCH AND DEVELOPMENT
AUTHORITY; POWERS UNDER FUND.
new text end

new text begin Subdivision 1. new text end

new text begin General powers. new text end

new text begin The authority shall have all of the powers necessary
to carry out the purposes and provisions of sections 116W.35 to 116W.58 including but not
limited to those provided under section 116W.39 and the following:
new text end

new text begin (1) the authority may make awards in the form of grants or loans, and charge and receive
a reasonable interest for the loans, or take an equity position in the form of stock, a
convertible note, or other securities in consideration of an award. Interests, revenues, or
other proceeds received as a result of a transaction authorized by use of the fund shall be
deposited to the corpus of the fund and used in the same manner as the corpus of the fund;
new text end

new text begin (2) in awarding money from the fund, priority shall be given to proposals from applicants
that have demonstrable economic benefit to the state in terms of the formation of a new
private sector business entity, the creation of jobs, or the attraction of federal and private
funding;
new text end

new text begin (3) in awarding money from the fund, priority shall be given to proposals from applicants
that:
new text end

new text begin (i) promote collaboration between any combination of colleges or universities, nonprofit
research institutions, and private industry;
new text end

new text begin (ii) enhance existing research superiority by attracting new research entities, research
talent, or resources to the state; and
new text end

new text begin (iii) create new research superiority that attracts significant researchers and resources
from outside the state;
new text end

new text begin (4) subject to the limits in this clause, money within the fund may be used for reasonable
administrative expenses by the authority including staffing and direct operational expenses,
and professional fees for accounting, legal, and other technical services required to carry
out the intent of the program and administration of the fund. Administrative expenses may
not exceed five percent of the first $5,000,000 in the fund and two percent of any amount
in excess of $5,000,000;
new text end

new text begin (5) before making an award, the authority shall enter into a written agreement with the
entity receiving the award that specifies the uses of the award; and
new text end

new text begin (6) if the award recipient has not used the award received for the purposes intended, as
of the date provided in the agreement, the recipient shall repay that amount and any interest
applicable under the agreement to the authority. All repayments must be deposited to the
corpus of the fund.
new text end

new text begin Subd. 2. new text end

new text begin Rules. new text end

new text begin The authority may adopt rules to implement the programs authorized
under this chapter.
new text end

Sec. 12.

new text begin [116W.57] REPAYMENT.
new text end

new text begin An entity must repay all or a portion of the amount of any award, grant, loan, or financial
assistance of any type paid by the authority under sections 116W.40 and 116W.48 to
116W.54, if the entity relocates outside the state or ceases operation in Minnesota within
four years from the date the authority provided the financial award. If the entity relocates
outside of this state or ceases operation in Minnesota within three years of the financial
award, the entity must repay 100 percent of the award. If the entity relocates or ceases
operation in Minnesota after a period of three years, but before four years from the date of
the financial award, the entity must repay 75 percent of the financial award.
new text end

Sec. 13.

new text begin [116W.58] EXPIRATION.
new text end

new text begin Sections 116W.46 to 116W.56 expire on the expiration date of the authority under section
116W.37, subdivision 7. Section 116W.57 expires four years from the date of the expiration
of the authority. Any unused money in the fund shall be deposited in the general fund.
new text end

Sec. 14. new text begin BOND SALE.
new text end

new text begin To provide the money appropriated in section 16 from the bond proceeds fund, the
commissioner of management and budget shall sell and issue bonds of the state in an amount
up to $500,000,000 in the manner, upon the terms, and with the effect prescribed by
Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article
XI, sections 4 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15. new text begin REPORTS TO LEGISLATURE.
new text end

new text begin (a) The Minnesota Research and Development Authority under Minnesota Statutes,
section 116W.37, must consult with state agencies and other stakeholders in order to create
a comprehensive inventory of all government, nonprofit, academic, and other programs in
the state of Minnesota that aim to enhance research and development efforts or
entrepreneurship. The Minnesota Research and Development Authority shall submit a
detailed report to the legislature before February 1, 2018, identifying all such programs and
the gaps in coverage by existing programs, as well as making recommendations for how to
effectively fill those gaps.
new text end

new text begin (b) The University of Minnesota and the Minnesota State Colleges and Universities
system shall submit a detailed report and proposal to the legislature before February 1, 2018,
for how unpublished research and development benchmarks, including patent applications,
patents granted, and engagement in entrepreneurial activities, could be counted toward
tenure decisions.
new text end

Sec. 16. new text begin BOND APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin $500,000,000 is appropriated from the bond proceeds
fund to the Minnesota Research and Development Authority to make grants to eligible
public entities under the capital innovations program under Minnesota Statutes, section
116W.51, to predesign, design, acquire land or an interest in land, construct, reconstruct,
renovate, furnish, equip, and make other related publicly owned infrastructure improvements.
new text end

new text begin Subd. 2. new text end

new text begin Schedule. new text end

new text begin This appropriation is for $50,000,000 each year in fiscal years 2018
through 2027.
new text end

new text begin Subd. 3. new text end

new text begin Cancellation. new text end

new text begin The appropriation under this section is not subject to Minnesota
Statutes, section 16A.642.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 17. new text begin APPROPRIATION.
new text end

new text begin $500,000,000 in fiscal year 2018 is appropriated from the general fund to the
commissioner of management and budget for deposit into the Minnesota research and
development fund. Of the money appropriated, $20,000,000 shall be used to create three
entrepreneurship incubator laboratories under Minnesota Statutes, section 116W.39, one in
the metropolitan area and two in greater Minnesota, but only to the extent that a 100 percent
match from nonpublic sources is provided. Nonpublic matching funds may not be provided
in exchange for a proprietary interest in a laboratory. This appropriation is available until
expended.
new text end