as introduced - 93rd Legislature (2023 - 2024) Posted on 03/15/2024 09:20am
A bill for an act
relating to economic development; appropriating money for the GroundBreak
capital access fund; requiring a report.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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$70,000,000 in fiscal year 2025 is appropriated from
the general fund to the commissioner of employment and economic development for a grant
to the Minneapolis Foundation for the GroundBreak capital access fund program to improve
access to capital for entrepreneurs and commercial developers of color, focusing particularly
on Black wealth builders. The Minneapolis Foundation must secure matching funds prior
to the release of state funds appropriated under this section.
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Money may be used for forgivable loans, low-cost loans, loan
guarantees, or equity enhancements. Distribution of money shall occur through approved
partners, including nonprofit organizations and Community Development Financial
Institutions (CDFIs) meeting the GroundBreak program criteria and priorities.
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(a) The Minneapolis Foundation and GroundBreak
partners shall establish criteria, procedures, and requirements for determining eligibility,
evaluating funding applications, and administering the program.
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(b) The Minneapolis Foundation shall submit the developed criteria, procedures, and
requirements to the commissioner of employment and economic development for review
and approval.
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(a) To qualify for funding from the GroundBreak
capital access fund, an applicant must:
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(1) be a resident of Minnesota;
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(2) submit a business plan for consideration and:
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(i) have no revenue or less than a year of revenue for a forgivable start-up loan;
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(ii) have over a year of revenue for an early-stage business loan with a guarantee; or
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(iii) have over two years of revenue for a growth-stage business loan with a guarantee;
and
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(b) Neighborhood commercial developments under $15,000,000 may qualify for:
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(1) equity enhancements up to two percent of the project cost or $250,000 maximum;
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(2) commercial mortgage loans with a guarantee for the first 60 percent of total project
costs; and
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(3) a low-cost loan to provide junior debt for up to 35 percent of total project costs.
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(a) The Minneapolis Foundation shall establish
appropriate accounting practices for the purpose of tracking loans, equity investments, and
loan repayments for reinvestment into the program.
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(b) Interest rates on loans shall not exceed the prime rate published by the Wall Street
Journal.
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(a) By February 15, 2025, and annually until February
15, 2027, the Minneapolis Foundation shall submit a report to the chairs and ranking minority
members of the legislative committees with jurisdiction over jobs and economic development
on the use of grant money and program outcomes. This report shall include the following:
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(1) the number of businesses to which a loan or equity investment was made;
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(2) a description of businesses supported by the program;
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(3) demographic information as specified by the commissioner regarding each recipient;
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(4) an account of loans and equity investments made during the calendar year; and
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(5) the program's impact on job creation and retention.
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(b) The Minneapolis Foundation must establish and maintain a public website reporting
on the use of money and any relevant performance measures. Up to three percent of money
can be used by the Minneapolis Foundation for administration and monitoring of the program.
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(c) By February 15, 2026, the Minneapolis Foundation must complete an independent
audit of the use of money under this section in accordance with standard accounting practices.
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(d) This is a onetime appropriation and is available until June 30, 2026.
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