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298.292 POLICY.
    Subdivision 1. Purposes. The legislature is cognizant of the severe economic dislocations
and widespread unemployment that result when a single industry on which an area is largely
dependent, experiences a drastic reduction in activity. The Douglas J. Johnson economic
protection trust fund is hereby created to be devoted to economic rehabilitation and diversification
of industrial enterprises where these conditions ensue as the result of the decline of such a single
industry. Priority shall be given to using the Douglas J. Johnson economic protection trust fund
for the following purposes:
(1) projects and programs that are designed to create and maintain productive, permanent,
skilled employment, including employment in technologically innovative businesses;
(2) projects and programs to encourage diversification of the economy and to promote the
development of minerals, alternative energy sources utilizing indigenous fuels, forestry, small
business, and tourism; and
(3) projects and programs for which technological and economic feasibility have been
demonstrated.
    Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust fund
may be used for the following purposes:
(1) to provide loans, loan guarantees, interest buy-downs and other forms of participation
with private sources of financing, but a loan to a private enterprise shall be for a principal amount
not to exceed one-half of the cost of the project for which financing is sought, and the rate of
interest on a loan to a private enterprise shall be no less than the lesser of eight percent or an
interest rate three percentage points less than a full faith and credit obligation of the United States
government of comparable maturity, at the time that the loan is approved;
(2) to fund reserve accounts established to secure the payment when due of the principal
of and interest on bonds issued pursuant to section 298.2211;
(3) to pay in periodic payments or in a lump sum payment any or all of the interest on
bonds issued pursuant to chapter 474 for the purpose of constructing, converting, or retrofitting
heating facilities in connection with district heating systems or systems utilizing alternative
energy sources; and
(4) to invest in a venture capital fund or enterprise that will provide capital to other entities
that are engaging in, or that will engage in, projects or programs that have the purposes set forth
in subdivision 1. No investments may be made in a venture capital fund or enterprise unless at
least two other unrelated investors make investments of at least $500,000 in the venture capital
fund or enterprise, and the investment by the Douglas J. Johnson economic protection trust fund
may not exceed the amount of the largest investment by an unrelated investor in the venture
capital fund or enterprise. For purposes of this subdivision, an "unrelated investor" is a person or
entity that is not related to the entity in which the investment is made or to any individual who
owns more than 40 percent of the value of the entity, in any of the following relationships: spouse,
parent, child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of
the value of all interests in it. For purposes of determining the limitations under this clause,
the amount of investments made by an investor other than the Douglas J. Johnson economic
protection trust fund is the sum of all investments made in the venture capital fund or enterprise
during the period beginning one year before the date of the investment by the Douglas J. Johnson
economic protection trust fund.
Money from the trust fund shall be expended only in or for the benefit of the taconite
assistance area defined in section 273.1341.
History: 1977 c 423 art 10 s 26; 2Sp1982 c 2 s 5; 1983 c 46 s 1; 1983 c 357 s 2; 1Sp1985 c
14 art 10 s 22; 1987 c 386 art 8 s 2; 1Sp2001 c 5 art 6 s 30; 2003 c 127 art 11 s 9,12; 1Sp2003 c
21 art 11 s 26