SF 4114

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/18/2022 09:37am

A bill for an act
relating to economic development; creating the community wealth-building grant
program; creating the community wealth-building account; requiring reports;
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.9925] COMMUNITY WEALTH-BUILDING GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Commissioner" means the commissioner of employment and economic development.
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new text begin (c) "Community business" means a cooperative, an employee-owned business, or a
commercial land trust that is at least 51 percent owned by individuals from targeted groups.
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new text begin (d) "Partner organization" means a community development financial institution or
nonprofit corporation.
new text end

new text begin (e) "Program" means the community wealth-building grant program created under this
section.
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new text begin (f) "Targeted groups" means people who are Black, Indigenous, People of Color,
immigrants, low-income, women, veterans, or people with disabilities.
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new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin The commissioner shall establish a community wealth-building
grant program to award grants to partner organizations to fund low-interest loans to
community businesses. The program must encourage tax-base revitalization, private
investment, job creation for targeted groups, creation and strengthening of business
enterprises, assistance to displaced businesses, and promotion of economic development in
low-income areas.
new text end

new text begin Subd. 3. new text end

new text begin Grants to partner organizations. new text end

new text begin (a) The commissioner shall award grants to
partner organizations through a competitive grant process where applicants apply using a
form designed by the commissioner. In evaluating applications, the commissioner shall
consider whether the applicant:
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new text begin (1) has a board of directors that includes members experienced in business and community
development, operating community businesses, addressing racial income disparities, and
creating jobs for targeted groups;
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new text begin (2) has the technical skills to analyze projects;
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new text begin (3) is familiar with other available public and private funding sources and economic
development programs;
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new text begin (4) can initiate and implement economic development projects;
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new text begin (5) can establish a program and administer funds;
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new text begin (6) can work with job referral networks assisting targeted groups; and
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new text begin (7) has established relationships with communities of targeted groups.
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new text begin (b) The commissioner shall ensure that loans through the program will fund community
businesses statewide and shall make reasonable attempts to balance the amount of funding
available to community businesses inside and outside of the metropolitan area as defined
under section 473.121, subdivision 2.
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new text begin (c) Partner organizations that receive grants under this subdivision shall use up to ten
percent of their award to provide specialized technical and legal assistance, either directly
or through a partnership with organizations with expertise in shared ownership structures,
to community businesses and businesses in the process of transitioning to community
ownership.
new text end

new text begin (d) Grants under this subdivision are available for five years. The commissioner shall
review existing grant agreements every five years and may renew or terminate the agreement
based on that review and consideration of the criteria under paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Loans to community businesses. new text end

new text begin (a) A partner organization that receives a
grant under subdivision 3 shall establish a plan for making low-interest loans to community
businesses. The plan requires approval by the commissioner.
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new text begin (b) Under the plan:
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new text begin (1) the state contribution to each loan shall be no less than $50,000 and no more than
$2,500,000;
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new text begin (2) loans shall be made for projects that are unlikely to be undertaken unless a loan is
received under the program;
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new text begin (3) priority shall be given to loans to businesses in the lowest income areas;
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new text begin (4) the interest rate on a loan shall not be higher than the Wall Street Journal prime rate;
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new text begin (5) 50 percent of all repayments of principal on a loan under the program shall be repaid
to the community wealth-building account created under subdivision 5. The partner
organization may retain the remainder of loan repayments to service loans and provide
further technical assistance;
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new text begin (6) the partner organization may charge a loan origination fee of no more than one
percent of the loan value and may retain that origination fee; and
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new text begin (7) a partner organization may not make a loan to a project in which it has an ownership
interest.
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new text begin Subd. 5. new text end

new text begin Community wealth-building account. new text end

new text begin A community wealth-building account
is created in the special revenue fund in the state treasury. Money in the account is
appropriated to the commissioner for grants under this section.
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new text begin Subd. 6. new text end

new text begin Reports. new text end

new text begin (a) Grant recipients shall submit an annual report to the commissioner
by January 31 of each year they participate in the program. The report shall include:
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new text begin (1) an account of all loans made through the program the preceding calendar year and
the impact of those loans on community businesses and job creation for targeted groups;
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new text begin (2) information on the source and amount of money collected and distributed under the
program, its assets and liabilities, and an explanation of administrative expenses; and
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new text begin (3) an independent audit of grant funds performed in accordance with generally accepted
accounting practices and auditing standards.
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new text begin (b) By February 15 of each year beginning in 2024, the commissioner shall submit a
report to the chairs and ranking members of the legislative committees with jurisdiction
over workforce and economic development on program outcomes, including copies of all
reports received under paragraph (a).
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Sec. 2. new text begin COMMUNITY WEALTH-BUILDING PROGRAM; APPROPRIATION.
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new text begin $15,000,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of employment and economic development for deposit in the community wealth-building
account in the special revenue fund. Of this amount, up to five percent is for administration
and monitoring of the community wealth-building grant program under Minnesota Statutes,
section 116J.9925. For fiscal years 2024 and beyond, the base amount is $2,000,000.
new text end