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Key: (1) language to be deleted (2) new language

    Laws of Minnesota 1993 

                        CHAPTER 177-S.F.No. 338 
           An act relating to economic development; creating 
          Minnesota Business Finance, Inc. to provide capital 
          for commercial borrowers through the Small Business 
          Administration; providing for powers and duties of a 
          board of directors and employees; transferring funds 
          from the certified development company established 
          under the department of trade and economic development 
          to the new corporation; providing for certain grants 
          and projects; appropriating money; amending Minnesota 
          Statutes 1992, section 13.99, by adding a subdivision; 
          proposing coding for new law as Minnesota Statutes, 
          chapter 116S; repealing Minnesota Statutes 1992, 
          sections 41A.065 and 116J.985. 
    Section 1.  Minnesota Statutes 1992, section 13.99, is 
amended by adding a subdivision to read: 
    Subd. 27a.  [MINNESOTA BUSINESS FINANCE, INC.] Certain data 
of Minnesota Business Finance, Inc., are classified under 
section 3. 
    Sec. 2.  [116S.01] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to this chapter. 
    Subd. 2.  [BOARD.] "Board" means the board of directors of 
Minnesota Business Finance, Inc.  
    Subd. 3.  [CORPORATION.] "Corporation" means Minnesota 
Business Finance, Inc.  
    Sec. 3.  [116S.02] [CORPORATION; MEMBERS; BOARD OF 
    Subdivision 1.  [PUBLIC CORPORATION.] Minnesota Business 
Finance, Inc. is a public corporation of the state and is not 
subject to the laws governing a state agency except as provided 
in this chapter.  The business of the corporation must be 
conducted under the name "Minnesota Business Finance, Inc." 
    Subd. 2.  [PURPOSE.] The purpose of the corporation is to 
engage in economic development activities throughout Minnesota 
and to provide access to capital for commercial borrowers 
throughout Minnesota primarily through the Small Business 
Administration section 503 program, United States Code, title 
15, section 697, as amended.  
     Subd. 3.  [BOARD OF DIRECTORS.] The corporation is governed 
by a board of 14 directors.  The membership terms, compensation, 
removal, and filling of vacancies of public members of the board 
are governed by section 15.0575 except that the terms of the 
public members are concurrent.  The membership of the board 
consists of the commissioner of trade and economic development 
or the commissioner's designee and 13 members who are: 
    (1) involved in economic development within the state of 
    (2) selected by the membership of the corporation in 
accordance with section 5, subdivision 3; and 
    (3) representative of government, private-sector lending 
institutions, community organizations, and business 
organizations as described in Code of Federal Regulation, title 
13, section 108.503-1(b)(2), as amended. 
    Subd. 4.  [BYLAWS.] The board of directors shall adopt 
bylaws and publish the bylaws and amendments to the bylaws in 
the State Register. 
    Subd. 5.  [PLACES OF BUSINESS.] The board shall locate and 
maintain the corporation's places of business within the state.  
board shall meet at least twice a year and may hold additional 
meetings upon giving notice in accordance with the bylaws of the 
corporation.  Except as provided in subdivision 7, board 
meetings are subject to section 471.705. 
    (b) A conference among directors by any means of 
communication through which the directors may simultaneously 
hear each other during the conference constitutes a board 
meeting if the number of directors participating in the 
conference is sufficient to constitute a quorum for the 
meeting.  Participation in a meeting by that means constitutes 
presence in person at the meeting.  
    Subd. 7.  [CLOSED MEETINGS; RECORDING.] The board of 
directors may by a majority vote in a public meeting decide to 
hold a closed meeting for purposes of discussing data described 
in subdivision 8 or security information, trade secret 
information, or labor relations information, as defined in 
section 13.37, subdivision 1.  The time and place of the closed 
meeting must be announced at the public meeting.  A written roll 
of members present at the closed meeting must be made available 
to the public after the closed meeting.  The proceedings of a 
closed meeting must be tape recorded.  The data on the tape are 
nonpublic data or private data on individuals as defined in 
section 13.02, subdivision 9 or 12, whichever is applicable. 
data, statistics, and information furnished to the corporation 
in connection with assistance or proposed assistance, including 
credit reports, financial statements, statements of net worth, 
income tax returns, either personal or corporate, and any other 
business and personal financial records are private data with 
regard to data on individuals under section 13.02, subdivision 
12, or as nonpublic data with regard to data not on individuals 
under section 13.02, subdivision 9. 
    Subd. 9.  [CONFLICT OF INTEREST.] A director, employee, or 
officer of the corporation may not participate in or vote on a 
decision of the board relating to an organization in which the 
director has either a direct or indirect financial interest or a 
conflict of interest as described in section 10A.07. 
    Subd. 10.  [TORT CLAIMS.] The corporation is a state agency 
for purposes of section 3.736. 
corporation is subject to chapter 13 and sections 15.17 and 
138.163 to 138.226. 
    Sec. 4.  [116S.03] [CORPORATE PERSONNEL.] 
    Subdivision 1.  [GENERALLY.] The board shall appoint and 
set the compensation for the executive director, who serves as 
chief executive officer of the corporation.  The executive 
director's compensation may not exceed 95 percent of the salary 
of the governor set under section 15A.082.  The board may 
designate the executive director as its general agent.  Subject 
to the approval of the board, the executive director shall 
employ staff consultants and other agents necessary to carry out 
the mission of the corporation.  
    Subd. 2.  [STATUS OF EMPLOYEES.] Employees, officers, and 
directors of the corporation are not state employees, but are 
covered by section 3.736 and, at the option of the board, may 
participate in the state retirement plan, the state deferred 
compensation plan for employees in the unclassified service, and 
an insurance plan administered by the commissioner of employee 
    Sec. 5.  [116S.04] [POWERS OF THE CORPORATION.] 
    Subdivision 1.  [GENERAL CORPORATE POWERS.] (a) The 
corporation has the powers granted to a nonprofit corporation by 
section 317A.161, except as otherwise provided in this chapter. 
    (b) Except as specified in section 3, subdivision 10, the 
state is not liable for the obligations of the corporation. 
    (c) Section 317A.161 applies to this chapter and the 
corporation in the same manner that it applies to business 
corporations established under chapter 317A. 
    (d) The corporation is a state agency for purposes of the 
following accounting and budgeting requirements: 
    (1) financial reports and other requirements under section 
    (2) the state budget system under sections 16A.095, 16A.10, 
and 16A.11; 
    (3) the state allotment and encumbrance, and accounting 
systems under sections 16A.14, subdivisions 2, 3, 4, and 5; and 
16A.15, subdivisions 2 and 3; and 
    (4) indirect costs under section 16A.127. 
    Subd. 2.  [DUTIES.] (a) The corporation must qualify as a 
state development company for purposes of United States Code, 
title 15, section 697, as amended, and must comply with 
applicable Small Business Administration organizational, 
operational, regulatory, and reporting requirements.  
    (b) The corporation must also comply with the requirements 
of the Small Business Administration's section 504 loan program, 
United States Code, title 15, section 697a, as amended.  
     Subd. 3.  [MEMBERSHIP.] The governor shall appoint at least 
25 members of the corporation, who must be representatives of 
government, private-sector lending institutions, community 
organizations, and business organizations, as described in Code 
of Federal Regulations, title 13, section 108.503-1(d), as 
amended.  The membership shall select the members of the board 
of directors in accordance with section 3, subdivision 3.  The 
board may submit names of persons for consideration by the 
governor in filling vacancies in the membership under this 
    Sec. 6.  [116S.05] [REGISTERED NAME.] 
    Notwithstanding section 317A.115, the secretary of state 
shall register the name "Minnesota Business Finance, Inc." on 
behalf of the corporation. 
    The Minnesota business finance account is an account in the 
special revenue fund.  Money in the account not needed for the 
immediate purposes of the corporation may be invested by the 
state board of investment in any way authorized by section 
11A.24.  Money in the account is appropriated to the corporation 
to be used as provided in this chapter.  
    Sec. 8.  [116S.07] [AUDITS.] 
    The corporation is subject to the auditing requirements of 
sections 3.971 and 3.972.  
    Sec. 9.  [116S.08] [ANNUAL REPORTS.] 
    The board shall submit annual reports to the chairs of the 
committee on commerce and economic development of the house of 
representatives and the committee on jobs, energy and community 
development of the senate and to the Small Business 
Administration on the activities of the corporation.  The board 
shall supply more frequent reports if requested.  
    Sec. 10.  [116S.09] [DISSOLUTION.] 
    In the event of dissolution of the corporation for any 
reason, the state, upon action by the governor, and after 
consultation with the legislative advisory commission, may 
require the liquidation of all holdings and investments and the 
return of the proceeds of that liquidation and any wholly-owned 
assets of the corporation to the state, in exchange for the 
assumption of all outstanding obligations of the corporation. 
    If the corporation is dissolved, or certain of its 
functions transferred to another entity, the assets and 
liabilities and property associated with the dissolved or 
transferred functions must return to the state or to the entity 
designated by laws. 
    Sec. 11.  [116S.10] [SUCCESSOR STATUS.] 
    (a) Minnesota Business Finance, Inc. is the legal successor 
in all respects of Opportunities Minnesota Incorporated 
established under section 116J.985, and all assets and 
liabilities are transferred to it.  The board of directors shall 
promptly upon appointment amend the relevant documents and file 
them with the secretary of state. 
    (b) The balance of the funds in the special revenue fund 
account currently allocated to Opportunities Minnesota 
Incorporated are transferred to the Minnesota business finance 
account for the purposes of sections 1 to 10.  
    The corporation must refer all small business 
administration 504 projects to a local certified development 
company if a local certified development company serves the area 
where the project is located.  If the local certified 
development company is unable to assist a business it must 
inform the business that it can apply for the project through 
the corporation. 
    The terms of the first members of the board of directors 
selected under section 3, subdivision 3, end on the first Monday 
in January, 1997. 
    Subdivision 1.  [PURPOSE.] The purpose of this section is 
to promote the industrial development of the state of Minnesota 
by fostering creation of collaborative flexible manufacturing 
networks to assist small manufacturers in joint purchase of 
products and services, in the production of new products beyond 
the capability of individual firms, and to promote use of 
quality management and quality assurance programs.  
    Subd. 2.  [AUTHORITY.] Minnesota Technology, Inc., may 
approve one grant of funds.  Any grant made to an eligible 
nonprofit organization as described in subdivision 3 shall be 
used for the purposes stated in subdivision 1.  
    Subd. 3.  [ELIGIBILITY.] The manufacturing collaborative 
network grant authorized under this section must be made to a 
nonprofit organization that has a dues-paying membership of more 
than 50 firms, each with fewer than 300 employees.  The board of 
directors governing the nonprofit organization must be elected 
solely by members that manufacture goods or that provide related 
value added services.  Membership of the nonprofit organization 
must include firms that produce a wide range of goods and 
    Subd. 4.  [MATCHING FUNDS REQUIREMENT.] The selected 
nonprofit organization must provide one dollar of nonpublic 
matching funds for each dollar granted under this section.  
    Subd. 5.  [REPORT TO THE LEGISLATURE.] The president of 
Minnesota Technology, Inc., must report to the legislature by 
January 15, 1994, on the progress of the grant recipient in 
forming manufacturing networks. 
    Sec. 15.  [REPEALER.] 
    Minnesota Statutes 1992, sections 41A.065 and 116J.985, are 
    Presented to the governor May 12, 1993 
    Signed by the governor May 14, 1993, 3:48 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes