1.1                          A bill for an act 
  1.2             relating to economic development; regulating rural 
  1.3             challenge grant program loan repayments; amending 
  1.4             Minnesota Statutes 1998, section 116J.415, subdivision 
  1.5             7. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 116J.415, 
  1.8   subdivision 7, is amended to read: 
  1.9      Subd. 7.  [REVOLVING FUND ADMINISTRATION.] (a) The 
  1.10  commissioner shall establish a minimum interest rate for loans 
  1.11  to ensure that necessary management costs are covered.  
  1.12     (b) Loan repayment amounts equal to one-half of the 
  1.13  principal and interest must be deposited in the rural 
  1.14  rehabilitation revolving fund for challenge grants to the region 
  1.15  from which the money was originally designated.  The remaining 
  1.16  amount of the loan repayment may be deposited in the regional 
  1.17  revolving loan fund for further distribution by the regional 
  1.18  organization, consistent with the loan criteria specified in 
  1.19  subdivisions 4 and 5. 
  1.20     (c) The first $1,000,000 of revolving loans for each region 
  1.21  must be matched by nonstate sources.  The matching requirement 
  1.22  does not apply to loans made under paragraph (b). 
  1.23     (d) Administrative expenses of each organization may be 
  1.24  paid out of the interest earned on loans and on interest earned 
  1.25  on money invested by the state board of investment under section 
  2.1   116J.413, subdivision 2.