SF 2083

as introduced - 92nd Legislature (2021 - 2022) Posted on 07/16/2021 01:45pm

A bill for an act
relating to economic development; establishing the Launch Minnesota program.

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

Section 1. new text begin LAUNCH MINNESOTA.
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new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin Launch Minnesota is established within the Business
and Community Development Division of the Department of Employment and Economic
Development to encourage and support the development of new private sector technologies
and support the science and technology policies under Minnesota Statutes, section 3.222.
Launch Minnesota must provide entrepreneurs and emerging technology-based companies
business development assistance and financial assistance to spur growth.
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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 defined in this subdivision
have the meanings given.
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new text begin (b) "Advisory board" means the board established under subdivision 9.
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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) "Department" means the Department of Employment and Economic Development.
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new text begin (e) "Entrepreneur" means a Minnesota resident who is involved in establishing a business
entity and secures resources directed to its growth while bearing the risk of loss.
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new text begin (f) "Greater Minnesota" means the area of Minnesota located outside of the metropolitan
area as defined in Minnesota Statutes, section 473.121, subdivision 2.
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new text begin (g) "Innovative technology" or "business" means a new novel business model or product;
a derivative product incorporating new elements into an existing product; a new use for a
product; a new process or method for the manufacture, use, or assessment of any product
or activity, patentability, and scalability. Innovative technology or business model does not
include locally based retail, lifestyle, or business services. The business must not be engaged
in real estate development; insurance; banking; lending; lobbying; political consulting;
information technology consulting; wholesale or retail trade; leisure; hospitality;
transportation; construction; ethanol production from corn; or professional services provided
by attorneys, accountants, business consultants, physicians, or health care consultants.
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new text begin (h) "Institution of higher education" has the meaning given in Minnesota Statutes, section
136A.28, subdivision 6.
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new text begin (i) "Minority group member" means a United States citizen who is Asian, Pacific Islander,
Black, Hispanic, or Native American.
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new text begin (j) "Research and development" means any activity that is:
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new text begin (1) a systematic, intensive study directed toward greater knowledge or understanding
of the subject studies;
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new text begin (2) a systematic study directed specifically toward applying new knowledge to meet a
recognized need; or
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new text begin (3) a systematic application of knowledge toward the production of useful materials,
devices, systems, and methods, including design, development, and improvement of
prototypes and new processes to meet specific requirements.
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new text begin (k) "Start-up" means a business entity that has been in operation for less than ten years,
has operations in Minnesota, and is in the development stage defined as devoting substantially
all of its efforts to establishing a new business and either of the following conditions exists:
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new text begin (1) planned principal operations have not commenced; or
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new text begin (2) planned principal operations have commenced, but have generated less than
$1,000,000 in revenue.
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new text begin (l) "Technology-related assistance" means the application and utilization of technological
information and technologies to assist in the development and production of new
technology-related products or services or to increase the productivity or otherwise enhance
the production or delivery of existing products or services.
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new text begin (m) "Trade association" means a nonprofit membership organization organized to promote
businesses and business conditions and having an election under section 501(c)(3) or
501(c)(6) of the Internal Revenue Code.
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new text begin (n) "Veteran" has the meaning given in Minnesota Statutes, section 197.447.
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new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The commissioner, by and through Launch Minnesota, shall:
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new text begin (1) support innovation and initiatives designed to accelerate the growth of innovative
technology and business start-ups in Minnesota;
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new text begin (2) in partnership with other organizations, offer classes and instructional sessions on
how to start a high-tech and innovative start-up;
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new text begin (3) promote activities for entrepreneurs and investors regarding the state's growing
innovation economy;
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new text begin (4) hold events and meetings that gather key stakeholders in the state's innovation sector;
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new text begin (5) conduct outreach and education on innovation activities and related financial programs
available from the department and other organizations, particularly for underserved
communities;
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new text begin (6) interact and collaborate with statewide partners including but not limited to businesses,
nonprofits, trade associations, and higher education institutions;
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new text begin (7) administer an advisory board to assist with direction, grant application review,
program evaluation, report development, and partnerships;
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new text begin (8) accept grant applications under subdivisions 5, 6, and 7 and work with the advisory
board to review and prioritize the applications and provide recommendations to the
commissioner; and
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new text begin (9) perform other duties at the commissioner's discretion.
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new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin (a) The commissioner shall employ an executive director in
the unclassified service, one staff member to support Launch Minnesota, and one staff
member in the business and community development division to manage grants. The
executive director shall:
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new text begin (1) assist the commissioner and the advisory board in performing the duties of Launch
Minnesota; and
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new text begin (2) comply with all state and federal program requirements, and all state and federal
securities and tax laws and regulations.
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new text begin (b) Launch Minnesota may occupy and lease physical space in a private co-working
facility that includes office space for staff and space for community engagement for training
entrepreneurs. The physical space leased under this paragraph is exempt from the
requirements in Minnesota Statutes, section 16B.24, subdivision 6.
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new text begin (c) At least three times per month, Launch Minnesota staff shall communicate with
organizations in greater Minnesota that have received a grant under subdivision 7. To the
extent possible, Launch Minnesota shall form partnerships with organizations located
throughout the state.
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new text begin (d) Launch Minnesota must accept grant applications under this section and provide
funding recommendations to the commissioner and the commissioner shall distribute grants
based in part on the recommendations.
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new text begin Subd. 5. new text end

new text begin Application process. new text end

new text begin (a) The commissioner shall establish the application form
and procedures for grants.
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new text begin (b) Upon receiving recommendations from Launch Minnesota, the commissioner is
responsible for evaluating all applications using evaluation criteria which shall be developed
by Launch Minnesota in consultation with the advisory board.
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new text begin (c) For grants under subdivision 6, priority shall be given if the applicant is a business
owner or entrepreneur who is a minority group member and a lesser priority shall be given
if the applicant is:
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new text begin (1) a business or entrepreneur located in greater Minnesota; or
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new text begin (2) a business owner or entrepreneur who is a woman or veteran.
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new text begin (d) For grants under subdivision 7, priority shall be given if the applicant is planning to
serve business owners or entrepreneurs who are minority group members and a lesser priority
shall be given if the applicant is planning to serve:
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new text begin (1) businesses or entrepreneurs located in greater Minnesota; or
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new text begin (2) business owners or entrepreneurs who are women or veterans.
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new text begin (e) Department staff, and not Launch Minnesota staff, are responsible for awarding
funding, disbursing funds, and monitoring grantee performance for all grants awarded under
this section.
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new text begin (f) Grantees must provide 50 percent in matching funds and grant payments must be
provided on a reimbursement basis after review of submitted receipts by the department.
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new text begin (g) Grant applications must be accepted on a regular periodic basis by Launch Minnesota
and must be reviewed by Launch Minnesota and the advisory board before being submitted
to the commissioner with their recommendations.
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new text begin Subd. 6. new text end

new text begin Innovation grants. new text end

new text begin (a) The commissioner shall distribute innovation grants
under this subdivision.
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new text begin (b) The commissioner shall provide a grant of up to $35,000 to an eligible business or
entrepreneur for research and development expenses, direct business expenses, and the
purchase of technical assistance or services from public higher education institutions and
nonprofit entities. Research and development expenditures may include but are not limited
to proof of concept activities, intellectual property protection, prototype designs and
production, and commercial feasibility. Expenditures funded under this subdivision are not
eligible for the research and development tax credit under Minnesota Statutes, section
290.068. Direct business expenses may include rent, equipment purchases, and supplier
invoices. Taxes imposed by federal, state, or local government entities may not be reimbursed
under this paragraph. Technical assistance or services must be purchased to assist in the
development or commercialization of a product or service to be eligible. Each business or
entrepreneur may receive only one grant per biennium under this paragraph.
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new text begin (c) The commissioner shall provide a grant of up to $35,000 in Phase 1 or $50,000 in
Phase 2 to an eligible business or entrepreneur that, as a registered client of the Small
Business Innovation Research (SBIR) program, has been awarded a first time Phase 1 or
Phase 2 award pursuant to the SBIR or Small Business Technology Transfer ( STTR)
programs after July 1, 2019. Each business or entrepreneur may receive only one grant per
biennium under this paragraph. Grants under this paragraph are not subject to the
requirements of subdivision 2, paragraph (l), but do require a recommendation from Launch
Minnesota advisory board.
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new text begin Subd. 7. new text end

new text begin Entrepreneur education grants. new text end

new text begin (a) The commissioner shall make entrepreneur
education grants to institutions of higher education and other organizations to provide
educational programming to entrepreneurs and provide outreach to and collaboration with
businesses, federal and state agencies, institutions of higher education, trade associations,
and other organizations working with entrepreneurs to advance innovative, technology, and
businesses throughout Minnesota.
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new text begin (b) Applications for entrepreneur education grants under this subdivision must be
submitted to the commissioner and evaluated by department staff other than Launch
Minnesota. The evaluation criteria must be developed by Launch Minnesota, in consultation
with the advisory board and the commissioner, and priority must be given to an applicant
who demonstrates activity assisting business owners or entrepreneurs residing in greater
Minnesota or who are women, veterans, or minority group members.
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new text begin (c) Department staff other than Launch Minnesota staff are responsible for awarding
funding, disbursing funds, and monitoring grantee performance under this subdivision.
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new text begin (d) Grantees may use the grant funds to deliver the following services:
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new text begin (1) development and delivery to innovate technology businesses of industry-specific or
innovative product- or process-specific counseling on issues of business formation, market
structure, market research and strategies, securing first mover advantage or overcoming
barriers to entry, protecting intellectual property, and securing debt or equity capital. This
counseling is to be delivered in a classroom setting or using distance media presentations;
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new text begin (2) outreach and education to businesses and organizations on the small business
investment tax credit program under Minnesota Statutes, section 116J.8737, the MNvest
crowd-funding program under Minnesota Statutes, section 80A.461, and other state programs
that support innovative technology business creation especially in underserved communities;
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new text begin (3) collaboration with institutions of higher education, local organizations, federal and
state agencies, the Small Business Development Center, and the Small Business Assistance
Office to create and offer educational programming and ongoing counseling in greater
Minnesota that is consistent with those services offered in the metropolitan area; and
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new text begin (4) events and meetings with other innovation-related organizations to inform
entrepreneurs and potential investors about Minnesota's growing information economy.
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new text begin Subd. 8. new text end

new text begin Report. new text end

new text begin Launch Minnesota shall report by December 31, 2022, and again by
December 31, 2023, to the chairs and ranking minority members of the committees of the
house of representatives and senate having jurisdiction over economic development policy
and finance. Each report shall include information on the work completed, including awards
made by the department under this section and progress toward transferring some activities
of Launch Minnesota to an entity outside of state government.
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new text begin Subd. 9. new text end

new text begin Advisory board. new text end

new text begin (a) The commissioner shall establish an advisory board to
advise the executive director regarding the activities of Launch Minnesota, make the
recommendations described in this section, and develop and initiate a strategic plan for
transferring some activities of Launch Minnesota to a new or existing public-private
partnership or nonprofit organization outside of state government.
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new text begin (b) The advisory board shall consist of ten members and is governed by Minnesota
Statutes, section 15.059. A minimum of seven members must be from the private sector
representing business and at least two members but no more than three members must be
from government and higher education. At least three of the members of the advisory board
shall be from greater Minnesota and at least three members shall be minority group members.
Appointees shall represent a range of interests, including entrepreneurs, large businesses,
industry organizations, investors, and both public and private small business service
providers.
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new text begin (c) The advisory board shall select a chair from its members. The executive director
shall provide administrative support to the committee.
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new text begin (d) The commissioner, or a designee, shall serve as an ex-officio, nonvoting member of
the advisory board.
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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 January 1, 2024.
new text end