1.1 	A bill for an act
1.2 	relating to economic development; authorizing certain investments; creating a 
1.3 	program; appropriating money;proposing coding for new law in Minnesota 
1.4 	Statutes, chapter 116J.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. [116J.635] GREATER MINNESOTA BUSINESS DEVELOPMENT 
1.7 	INVESTMENTS.
1.8 		Subdivision 1.Authorized investments. The commissioner shall invest funds in 
1.9 	the form of long-term loans to qualified business development organizations that service 
1.10 	and are located in communities outside the seven-county metropolitan area as defined in 
1.11 	section 473.121, subdivision 2, to provide capital for business lending and investment by 
1.12 	the qualified organizations.
1.13 		Subd. 2.Qualified organizations. The commissioner is authorized to make 
1.14 	investments in the following organizations:
1.15 	(1) Minnesota-based community development financial institutions, as certified 
1.16 	by the United States Department of the Treasury, that provide business financing to 
1.17 	Minnesota businesses; and
1.18 	(2) other nongovernmental Minnesota-based organizations that provide debt 
1.19 	financing for, or equity investment in, Minnesota businesses and that satisfy the provisions 
1.20 	in subdivision 3.
1.21 		Subd. 3.Investments authorized. The commissioner may make investments in 
1.22 	organizations that conform to the following provisions:
2.1 	(1) the organizations seeking an investment of funds administered by the 
2.2 	commissioner must provide collateral or security for not less than 100 percent of the 
2.3 	funds invested in the organization; 
2.4 	(2) the minimum projected return on the state investment is determined based on 
2.5 	an evaluation of investment risk that takes into account the overall amount and quality 
2.6 	of the collateral or security offered to the commissioner by the organizations seeking the 
2.7 	state investment and a calculation of the economic benefits that will accrue to the state as 
2.8 	the result of job creation and tax revenue that will be generated through business activity 
2.9 	financed through the state investment. In no case may the projected return on investment 
2.10 	be less than one percent per annum; and 
2.11 	(3) the state investment by the commissioner in any qualifying organization may 
2.12 	not exceed $2,000,000.
2.13 		Subd. 4.Requirements for state investments. All investments are subject to an 
2.14 	investment agreement that must include:
2.15 	(1) a description of the certificate or note that the state receives for the investment;
2.16 	(2) a description of the business organization and the management experience and 
2.17 	qualifications of the manager for the organization seeking the investment;
2.18 	(3) a description of the fiduciary responsibility of the managing entity;
2.19 	(4) a description of the use of investment proceeds and the underwriting criteria to 
2.20 	be used by the organization in making investment decisions;
2.21 	(5) an explanation of the investment objectives;
2.22 	(6) a description of the manager's operating costs and expenses that would be 
2.23 	reimbursable from proceeds of the state investment;
2.24 	(7) collateral and security pledged to the state;
2.25 	(8) the basis and calculation of return on investment to the state;
2.26 	(9) a description of the distribution of gain and principal to the state;
2.27 	(10) a description of accounting and reporting standards;
2.28 	(11) a description of the liquidation plan and time frame for accomplishment of 
2.29 	investment objectives; and 
2.30 	(12) termination rights of the state and the qualifying organization.
2.31 		Subd. 5.Investment fund. The commissioner shall establish an investment fund 
2.32 	from which fund investments can be made in qualifying organizations. The funds repaid 
2.33 	by the qualifying organizations must be returned to the fund for subsequent reinvestment 
2.34 	in eligible organizations.

2.35 	Sec. 2. APPROPRIATION.
 3.1 	$12,000,000 is appropriated from the general fund to the commissioner of 
3.2 	employment and economic development to provide loans authorized under section 1.