1.1                          A bill for an act 
  1.2             relating to economic development; modifying the rural 
  1.3             challenge grant program; increasing the amount that 
  1.4             may be used to administer the contamination cleanup 
  1.5             grant program; eliminating a report and obsolete 
  1.6             references; amending Minnesota Statutes 2002, sections 
  1.7             17.101, subdivision 1; 115C.08, subdivision 4; 
  1.8             116J.415, subdivisions 1, 2, 4, 5, 7, 11; 116J.955, 
  1.9             subdivision 2; 116J.966, subdivision 1; 116L.04, 
  1.10            subdivision 1a; repealing Minnesota Statutes 2002, 
  1.11            sections 13.598, subdivision 2; 116J.411, subdivision 
  1.12            3; 116J.415, subdivisions 6, 9, 10; 116J.9665. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 2002, section 17.101, 
  1.15  subdivision 1, is amended to read: 
  1.16     Subdivision 1.  [DEPARTMENTAL DUTIES.] For the purposes of 
  1.17  expanding, improving, and developing production and marketing of 
  1.18  products of Minnesota agriculture, the commissioner shall 
  1.19  encourage and promote the production and marketing of these 
  1.20  products by means of:  
  1.21     (a) advertising Minnesota agricultural products; 
  1.22     (b) assisting state agricultural commodity organizations; 
  1.23     (c) developing methods to increase processing and marketing 
  1.24  of agricultural commodities including commodities not being 
  1.25  produced in Minnesota on a commercial scale, but which may have 
  1.26  economic potential in national and international markets; 
  1.27     (d) investigating and identifying new marketing technology 
  1.28  and methods to enhance the competitive position of Minnesota 
  1.29  agricultural products; 
  2.1      (e) evaluating livestock marketing opportunities; 
  2.2      (f) assessing and developing national and international 
  2.3   markets for Minnesota agricultural products; 
  2.4      (g) studying the conversion of raw agricultural products to 
  2.5   manufactured products including ethanol; 
  2.6      (h) hosting the visits of foreign trade teams to Minnesota 
  2.7   and defraying the teams' expenses; 
  2.8      (i) assisting Minnesota agricultural businesses desiring to 
  2.9   sell their products; 
  2.10     (j) conducting research to eliminate or reduce specific 
  2.11  production or technological barriers to market development and 
  2.12  trade; and 
  2.13     (k) other activities the commissioner deems appropriate to 
  2.14  promote Minnesota agricultural products, provided that the 
  2.15  activities do not duplicate programs or services provided by the 
  2.16  Minnesota trade division or the Minnesota world trade center. 
  2.17     Sec. 2.  Minnesota Statutes 2002, section 115C.08, 
  2.18  subdivision 4, is amended to read: 
  2.19     Subd. 4.  [EXPENDITURES.] (a) Money in the fund may only be 
  2.20  spent: 
  2.21     (1) to administer the petroleum tank release cleanup 
  2.22  program established in this chapter; 
  2.23     (2) for agency administrative costs under sections 116.46 
  2.24  to 116.50, sections 115C.03 to 115C.06, and costs of corrective 
  2.25  action taken by the agency under section 115C.03, including 
  2.26  investigations; 
  2.27     (3) for costs of recovering expenses of corrective actions 
  2.28  under section 115C.04; 
  2.29     (4) for training, certification, and rulemaking under 
  2.30  sections 116.46 to 116.50; 
  2.31     (5) for agency administrative costs of enforcing rules 
  2.32  governing the construction, installation, operation, and closure 
  2.33  of aboveground and underground petroleum storage tanks; 
  2.34     (6) for reimbursement of the environmental response, 
  2.35  compensation, and compliance account under subdivision 5 and 
  2.36  section 115B.26, subdivision 4; 
  3.1      (7) for administrative and staff costs as set by the board 
  3.2   to administer the petroleum tank release program established in 
  3.3   this chapter; 
  3.4      (8) for corrective action performance audits under section 
  3.5   115C.093; and 
  3.6      (9) for contamination cleanup grants, as provided in 
  3.7   paragraph (c). 
  3.8      (b) Except as provided in paragraph (c), money in the fund 
  3.9   is appropriated to the board to make reimbursements or payments 
  3.10  under this section. 
  3.11     (c) $6,200,000 is annually appropriated from the fund to 
  3.12  the commissioner of trade and economic development for 
  3.13  contamination cleanup grants under section 116J.554.  Of this 
  3.14  amount, the commissioner may spend up to $120,000 $180,000 
  3.15  annually for administration of the contamination cleanup grant 
  3.16  program.  The appropriation does not cancel and is available 
  3.17  until expended.  The appropriation shall not be withdrawn from 
  3.18  the fund nor the fund balance reduced until the funds are 
  3.19  requested by the commissioner of trade and economic 
  3.20  development.  The commissioner shall schedule requests for 
  3.21  withdrawals from the fund to minimize the necessity to impose 
  3.22  the fee authorized by subdivision 2.  Unless otherwise provided, 
  3.23  the appropriation in this paragraph may be used for: 
  3.24     (1) project costs at a qualifying site if a portion of the 
  3.25  cleanup costs are attributable to petroleum contamination; and 
  3.26     (2) the costs of performing contamination investigation if 
  3.27  there is a reasonable basis to suspect the contamination is 
  3.28  attributable to petroleum. 
  3.29     <b>[EFFECTIVE DATE.]</b> This section is effective June 30, 2003. 
  3.30     Sec. 3.  Minnesota Statutes 2002, section 116J.415, 
  3.31  subdivision 1, is amended to read: 
  3.32     Subdivision 1.  [ORGANIZATION.] The commissioner shall make 
  3.33  challenge grants to regional organizations, for the purpose of 
  3.34  providing financial assistance to encourage private investment, 
  3.35  to provide jobs for low-income persons, and to promote economic 
  3.36  development in the rural areas of the state. 
  4.1      Sec. 4.  Minnesota Statutes 2002, section 116J.415, 
  4.2   subdivision 2, is amended to read: 
  4.3      Subd. 2.  [FUNDING REGIONS.] The commissioner shall divide 
  4.4   the state outside of the metropolitan area as defined in section 
  4.5   473.121, subdivision 2, into six regions.  A region's boundaries 
  4.6   must be coterminous with the boundaries of one or more of the 
  4.7   development regions established under section 462.385.  The 
  4.8   commissioner shall designate up to $1,000,000 for each region, 
  4.9   to be awarded over a period of three years allocate all funds 
  4.10  remaining in each regional subaccount of the rural 
  4.11  rehabilitation account, as established under section 166J.955, 
  4.12  to each respective regional organization.  The money designated 
  4.13  to each region must be used for revolving loans assistance 
  4.14  authorized in this section.  
  4.15     Sec. 5.  Minnesota Statutes 2002, section 116J.415, 
  4.16  subdivision 4, is amended to read: 
  4.17     Subd. 4.  [REVOLVING LOAN FUND.] A regional organization 
  4.18  shall establish a commissioner certified revolving loan fund to 
  4.19  provide loans to new and expanding businesses in rural Minnesota 
  4.20  to promote economic development in rural Minnesota.  Eligible 
  4.21  business enterprises include technologically innovative 
  4.22  industries, value-added manufacturing, agriprocessing, 
  4.23  information industries, and agricultural marketing.  Loan 
  4.24  applications given preliminary approval by the organization must 
  4.25  be forwarded to the commissioner for final approval.  The amount 
  4.26  of state money allocated for each loan is appropriated from the 
  4.27  rural rehabilitation account established in section 116J.955 to 
  4.28  the organization's regional revolving loan fund when the 
  4.29  commissioner gives final approval for each loan.  The amount of 
  4.30  money appropriated from the rural rehabilitation account may not 
  4.31  exceed 50 percent for each loan.  The amount of nonpublic money 
  4.32  must equal at least 50 percent for each loan.  Funds may be used 
  4.33  to provide loans, loan guarantees, interest buy-downs, and other 
  4.34  forms of participation with private sources of financing, 
  4.35  provided that the financial assistance must be for a principal 
  4.36  amount that does not exceed one-half of the cost of the project 
  5.1   for which financing is sought. 
  5.2      Sec. 6.  Minnesota Statutes 2002, section 116J.415, 
  5.3   subdivision 5, is amended to read: 
  5.4      Subd. 5.  [LOAN ASSISTANCE CRITERIA.] The following 
  5.5   criteria apply to loans made under Projects supported through 
  5.6   the challenge grant program must be used principally to benefit 
  5.7   low-income persons by:  
  5.8      (1) loans must be made to businesses that are not likely to 
  5.9   undertake a project for which loans are sought without 
  5.10  assistance from the challenge grant program; 
  5.11     (2) a loan must be used for a project designed principally 
  5.12  to benefit low-income persons through the creation of job or 
  5.13  business opportunities for them; 
  5.14     (3) the minimum loan is $5,000 and the maximum is $200,000; 
  5.15     (4) a loan may not exceed 50 percent of the total cost of 
  5.16  an individual project; 
  5.17     (5) a loan may not be used for a retail development 
  5.18  project; and 
  5.19     (6) a business applying for a loan, except a 
  5.20  microenterprise loan under subdivision 6, must be sponsored by a 
  5.21  resolution of the governing body of the local governmental unit 
  5.22  within whose jurisdiction the project is located. 
  5.23     (1) creating new jobs or retaining existing jobs; 
  5.24     (2) increasing the local tax base; 
  5.25     (3) demonstrating that investment of public dollars induces 
  5.26  private funds; 
  5.27     (4) providing higher wage levels to the community or adding 
  5.28  value to current workforce skills; 
  5.29     (5) retaining existing business; or 
  5.30     (6) attracting out-of-state business. 
  5.31     Sec. 7.  Minnesota Statutes 2002, section 116J.415, 
  5.32  subdivision 7, is amended to read: 
  5.33     Subd. 7.  [REVOLVING FUND ADMINISTRATION.] (a) The 
  5.34  commissioner shall establish a minimum interest rate for loans 
  5.35  to ensure that necessary management costs are covered.  
  5.36     (b) Loan Repayment amounts equal to one-half of the 
  6.1   principal and interest must be deposited in the rural 
  6.2   rehabilitation revolving fund for challenge grants to the region 
  6.3   from which the money was originally designated.  The remaining 
  6.4   amount of the loan repayment may must be deposited in the 
  6.5   regional revolving loan fund for further distribution by the 
  6.6   regional organization, consistent with the loan criteria 
  6.7   specified in subdivisions 4 and 5. 
  6.8      (c) The first $1,000,000 of revolving loans for each region 
  6.9   must be matched by nonstate sources.  The matching requirement 
  6.10  does not apply to loans made under paragraph (b). 
  6.11     (d) Administrative expenses of each organization may be 
  6.12  paid out of the interest earned on loans and on interest earned 
  6.13  on money invested by the state board of investment under section 
  6.14  116J.413, subdivision 2. 
  6.15     Sec. 8.  Minnesota Statutes 2002, section 116J.415, 
  6.16  subdivision 11, is amended to read: 
  6.17     Subd. 11.  [REPORTING REQUIREMENTS.] An organization that 
  6.18  receives a challenge grant shall: 
  6.19     (1) submit an annual report to the commissioner by February 
  6.20  15 of each August 30 for the preceding fiscal year that includes 
  6.21  a description of projects supported by the challenge grant 
  6.22  program, an account of loans made, written off, and fully paid 
  6.23  during the calendar year, the source and amount of money 
  6.24  collected and distributed by the challenge grant program 
  6.25  regional revolving fund, and the program's assets and 
  6.26  liabilities, and an explanation of administrative 
  6.27  expenses funds' cash balance and loans receivable; and 
  6.28     (2) provide for an independent annual audit to be performed 
  6.29  in accordance with generally accepted accounting practices and 
  6.30  auditing standards and submit a copy of each annual audit report 
  6.31  to the commissioner. 
  6.32     Sec. 9.  Minnesota Statutes 2002, section 116J.955, 
  6.33  subdivision 2, is amended to read: 
  6.34     Subd. 2.  [EXPENDITURE OF ACCOUNT.] The commissioner may 
  6.35  use the rural rehabilitation account for the purposes that are 
  6.36  allowed under the Minnesota rural rehabilitation corporation's 
  7.1   charter and agreement with, as may be amended or modified by, 
  7.2   the United States Secretary of Agriculture as provided in Public 
  7.3   Law Number 499, 81st Congress, enacted May 3, 1950 and as 
  7.4   allowed under Laws 1987, chapter 386, article 1.  Not more than 
  7.5   three percent of the combined book value of the Minnesota rural 
  7.6   rehabilitation corporation's assets account and the regional 
  7.7   revolving funds may be used for administrative purposes in a 
  7.8   year without approval of the United States Secretary of 
  7.9   Agriculture.  Any funds used for administrative purposes may 
  7.10  only be drawn from money remaining in the Minnesota rural 
  7.11  rehabilitation account.  
  7.12     Sec. 10.  Minnesota Statutes 2002, section 116J.966, 
  7.13  subdivision 1, is amended to read: 
  7.14     Subdivision 1.  [GENERALLY.] (a) The commissioner shall 
  7.15  promote, develop, and facilitate trade and foreign investment in 
  7.16  Minnesota.  In furtherance of these goals, and in addition to 
  7.17  the powers granted by section 116J.035, the commissioner may:  
  7.18     (1) locate, develop, and promote international markets for 
  7.19  Minnesota products and services; 
  7.20     (2) arrange and lead trade missions to countries with 
  7.21  promising international markets for Minnesota goods, technology, 
  7.22  services, and agricultural products; 
  7.23     (3) promote Minnesota products and services at domestic and 
  7.24  international trade shows; 
  7.25     (4) organize, promote, and present domestic and 
  7.26  international trade shows featuring Minnesota products and 
  7.27  services; 
  7.28     (5) host trade delegations and assist foreign traders in 
  7.29  contacting appropriate Minnesota businesses and investments; 
  7.30     (6) develop contacts with Minnesota businesses and gather 
  7.31  and provide information to assist them in locating and 
  7.32  communicating with international trading or joint venture 
  7.33  counterparts; 
  7.34     (7) provide information, education, and counseling services 
  7.35  to Minnesota businesses regarding the economic, commercial, 
  7.36  legal, and cultural contexts of international trade; 
  8.1      (8) provide Minnesota businesses with international trade 
  8.2   leads and information about the availability and sources of 
  8.3   services relating to international trade, such as export 
  8.4   financing, licensing, freight forwarding, international 
  8.5   advertising, translation, and custom brokering; 
  8.6      (9) locate, attract, and promote foreign direct investment 
  8.7   and business development in Minnesota to enhance employment 
  8.8   opportunities in Minnesota; 
  8.9      (10) provide foreign businesses and investors desiring to 
  8.10  locate facilities in Minnesota information regarding sources of 
  8.11  governmental, legal, real estate, financial, and business 
  8.12  services; 
  8.13     (11) enter into contracts or other agreements with private 
  8.14  persons and public entities, including agreements to establish 
  8.15  and maintain offices and other types of representation in 
  8.16  foreign countries, to carry out the purposes of promoting 
  8.17  international trade and attracting investment from foreign 
  8.18  countries to Minnesota and to carry out this section, without 
  8.19  regard to section 16C.06; and 
  8.20     (12) market trade-related materials to businesses and 
  8.21  organizations, and the proceeds of which must be placed in a 
  8.22  special revolving account and are appropriated to the 
  8.23  commissioner to prepare and distribute trade-related materials.  
  8.24     (b) The programs and activities of the commissioner of 
  8.25  trade and economic development and the Minnesota trade division 
  8.26  may not duplicate programs and activities of the commissioner of 
  8.27  agriculture or the Minnesota world trade center. 
  8.28     (c) The commissioner shall notify the chairs of the senate 
  8.29  finance and house appropriations committees of each agreement 
  8.30  under this subdivision to establish and maintain an office or 
  8.31  other type of representation in a foreign country. 
  8.32     Sec. 11.  Minnesota Statutes 2002, section 116L.04, 
  8.33  subdivision 1a, is amended to read: 
  8.34     Subd. 1a.  [PATHWAYS PROGRAM.] The pathways program may 
  8.35  provide grants-in-aid for developing programs which assist in 
  8.36  the transition of persons from welfare to work and assist 
  9.1   individuals at or below 200 percent of the federal poverty 
  9.2   guidelines.  The program is to be operated by the board.  The 
  9.3   board shall consult and coordinate with program administrators 
  9.4   at the department of economic security to design and provide 
  9.5   services for temporary assistance for needy families recipients. 
  9.6      Pathways grants-in-aid may be awarded to educational or 
  9.7   other nonprofit training institutions for education and training 
  9.8   programs and services supporting education and training programs 
  9.9   that serve eligible recipients. 
  9.10     Preference shall be given to projects that: 
  9.11     (1) provide employment with benefits paid to employees; 
  9.12     (2) provide employment where there are defined career paths 
  9.13  for trainees; 
  9.14     (3) pilot the development of an educational pathway that 
  9.15  can be used on a continuing basis for transitioning persons from 
  9.16  welfare to work; and 
  9.17     (4) demonstrate the active participation of department of 
  9.18  economic security workforce centers, Minnesota state college and 
  9.19  university institutions and other educational institutions, and 
  9.20  local welfare agencies. 
  9.21     Pathways projects must demonstrate the active involvement 
  9.22  and financial commitment of private business.  Pathways projects 
  9.23  must be matched with cash or in-kind contributions on at least a 
  9.24  one-to-one ratio by participating private business. 
  9.25     A single grant to any one institution shall not exceed 
  9.26  $400,000. 
  9.27     The board shall annually, by March 31, report to the 
  9.28  commissioners of economic security and trade and economic 
  9.29  development on pathways programs, including the number of 
  9.30  recipients participating in the program, the number of 
  9.31  participants placed in employment, the salary and benefits they 
  9.32  receive, and the state program costs per participant. 
  9.33     Sec. 12.  [REPEALER.] 
  9.34     Minnesota Statutes 2002, sections 13.598, subdivision 2; 
  9.35  116J.411, subdivision 3; 116J.415, subdivisions 6, 9, and 10; 
  9.36  and 116J.9665, are repealed.