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HF 1105

as introduced - 89th Legislature (2015 - 2016) Posted on 02/19/2015 01:50pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/19/2015

Current Version - as introduced

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A bill for an act
relating to economic development; modifying the urban challenge grants
program; appropriating money; amending Minnesota Statutes 2014, sections
116M.14, by adding a subdivision; 116M.18, subdivisions 1, 2, 3, 4, 8.

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

Section 1.

Minnesota Statutes 2014, section 116M.14, is amended by adding a
subdivision to read:


new text begin Subd. 6. new text end

new text begin Low-income person. new text end

new text begin "Low-income person" means a person who has an
annual income, adjusted for family size, of not more than 80 percent of the area median
family income for the seven-county metropolitan area.
new text end

Sec. 2.

Minnesota Statutes 2014, section 116M.18, subdivision 1, is amended to read:


Subdivision 1.

Eligibility rules.

The board shall make urban challenge grants
deleted text beginfor use in low-income areasdeleted text endnew text begin for use in the seven-county metropolitan areanew text end to nonprofit
corporations to encourage private investment, to provide jobs for minority persons and
others in low-income areas, to create and strengthen minoritynew text begin and low-income persons'new text end
business enterprises, and to promote economic development in a low-income area. The
board shall adopt rules to establish criteria for determining loan eligibility.

Sec. 3.

Minnesota Statutes 2014, section 116M.18, subdivision 2, is amended to read:


Subd. 2.

Challenge grant eligibility; nonprofit corporation.

The board may enter
into agreements with nonprofit corporations to fund and guarantee loans the nonprofit
corporation makes in low-income areas under subdivision 4new text begin and to low-income personsnew text end. A
corporation must demonstrate that:

(1) its board of directors includes citizens experienced in development, minority
business enterprises, and creating jobs in low-income areas;

(2) it has the technical skills to analyze projects;

(3) it is familiar with other available public and private funding sources and
economic development programs;

(4) it can initiate and implement economic development projects;

(5) it can establish and administer a revolving loan account; and

(6) it can work with job referral networks which assist minority and other persons in
low-income areas.

Sec. 4.

Minnesota Statutes 2014, section 116M.18, subdivision 3, is amended to read:


Subd. 3.

Revolving loan fund.

(a) The board shall establish a revolving loan fund to
make grants to nonprofit corporations for the purpose of making loans and loan guarantees
to new and expanding businesses in a low-income areanew text begin, andnew text end to promote deleted text beginminoritydeleted text end
business enterprises and job creation for minority and deleted text beginother persons in low-income areasdeleted text endnew text begin
low-income persons throughout the seven-county metropolitan area
new text end.

(b) Eligible business enterprises include, but are not limited to, technologically
innovative industries, value-added manufacturing, and information industries. Loan
applications given preliminary approval by the nonprofit corporation must be forwarded to
the board for approval. The commissioner must give final approval for each loan or loan
guarantee made by the nonprofit corporation. The amount of the state funds contributed to
any loan or loan guarantee may not exceed 50 percent of each loan.

Sec. 5.

Minnesota Statutes 2014, section 116M.18, subdivision 4, is amended to read:


Subd. 4.

Business loan criteria.

(a) The criteria in this subdivision apply to loans
made or guaranteed by nonprofit corporations under the urban challenge grant program.

(b) Loans or guarantees must be made to businesses that are not likely to undertake
a project for which loans are sought without assistance from the urban challenge grant
program.

deleted text begin (c) A loan or guarantee must be used for a project designed to benefit persons in
low-income areas through the creation of job or business opportunities for them. Priority
must be given for loans to the lowest income areas.
deleted text end

deleted text begin (d)deleted text endnew text begin (c)new text end The minimum state contribution to a loan or guarantee is $5,000 and the
maximum is $150,000.

deleted text begin (e)deleted text endnew text begin (d)new text end The state contribution must be matched by at least an equal amount of new
private investment.

deleted text begin (f)deleted text endnew text begin (e)new text end A loan may not be used for a retail development project.

deleted text begin (g)deleted text endnew text begin (f)new text end The business must agree to work with job referral networks that focus on
minority applicants from low-income areas.

Sec. 6.

Minnesota Statutes 2014, section 116M.18, subdivision 8, is amended to read:


Subd. 8.

Reporting requirements.

A nonprofit corporation that receives a
challenge grant shall:

(1) submit an annual report to the board by September 30 of each year that includes a
description of projects supported by the urban challenge grant program, an account of loans
made during the calendar year, the program's impact on minority business enterprises and
job creation for minority persons andnew text begin low-incomenew text end persons deleted text beginin low-income areasdeleted text end, the source
and amount of money collected and distributed by the urban challenge grant program, the
program's assets and liabilities, and an explanation of administrative expenses; and

(2) provide for an independent annual audit to be performed in accordance with
generally accepted accounting practices and auditing standards and submit a copy of each
annual audit report to the board.

Sec. 7. new text beginAPPROPRIATION.
new text end

new text begin (a) $350,000 in fiscal year 2016 and $350,000 in fiscal year 2017 are from the
general fund to the commissioner of employment and economic development for the
department's business development pilot program.
new text end

new text begin (b) $500,000 in fiscal year 2016 and $500,000 in fiscal year 2017 are from the
general fund to the commissioner of employment and economic development for the urban
initiative loan program in Minnesota Statutes, section 116M.18.
new text end