Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1145 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to economic development; appropriating money for the GroundBreak
3	3	1.3 capital access and innovation fund; requiring a report.
4	4	1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
5	5	1.5 Section 1. GROUNDBREAK CAPITAL ACCESS AND INNOVATION FUND.
6	6	1.6 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
7	7	1.7the meanings given.
8	8	1.8 (b) "Commissioner" means the commissioner of employment and economic development.
9	9	1.9 (c) "Originating partner" means a community development financial institution or
10	10	1.10nonprofit organization engaged in business development or economic development.
11	11	1.11 (d) "Startup" means a business that is seeking seed funding to initiate or expand revenue.
12	12	1.12 (e) "Equity enhancements" means financial assistance that increases ownership.
13	13	1.13 (f) "GroundBreak" means a coalition of philanthropic, private, and civic partners working
14	14	1.14to expand access to flexible capital and traditional bank loans.
15	15	1.15 (g) "GroundBreak loan pool" is private capital for low-cost, long-term loans.
16	16	1.16 Subd. 2.Appropriation.$50,000,000 in fiscal year 2026 is appropriated from the general
17	17	1.17fund to the commissioner of employment and economic development for a grant to the
18	18	1.18Minneapolis Foundation to improve access to capital for entrepreneurship, commercial real
19	19	1.19estate development, and homeownership through forgivable business loans, commercial
20	20	1.20real estate equity enhancements, and forgivable down payment assistance loans. The base
21	21	1Section 1.
22	22	25-02489 as introduced02/03/25 REVISOR SS/LJ
23	23	SENATE
24	24	STATE OF MINNESOTA
25	25	S.F. No. 1145NINETY-FOURTH SESSION
26	26	(SENATE AUTHORS: MOHAMED, Pha, Champion, Housley and Gustafson)
27	27	OFFICIAL STATUSD-PGDATE
28	28	Introduction and first reading02/10/2025
29	29	Referred to Jobs and Economic Development 2.1for this appropriation is $25,000,000 in fiscal year 2028, $25,000,000 in fiscal year 2029,
30	30	2.2and $0 in fiscal year 2030.
31	31	2.3 Subd. 3.Forgivable startup business loans.(a) The Minneapolis Foundation shall
32	32	2.4provide capital to originating partners to make forgivable startup loans to eligible businesses
33	33	2.5using criteria and reporting requirements approved by the commissioner.
34	34	2.6 (b) To be eligible for a forgivable business loan under this subdivision, a business must:
35	35	2.7 (1) have primary business operations located in the state;
36	36	2.8 (2) be a startup business seeking capital to grow;
37	37	2.9 (3) lack access to startup capital through a traditional financial institution or other sources;
38	38	2.10 (4) submit a business plan; and
39	39	2.11 (5) complete a technical assistance program provided by an originating partner or obtain
40	40	2.12a letter of recommendation from an originating partner stating that the business plan is
41	41	2.13complete and has been reviewed and recommended for a loan.
42	42	2.14 (c) Forgivable loans may be used for inventory purchases, payroll, rent, technology,
43	43	2.15equipment, marketing, professional services, leasehold improvements, and other similar
44	44	2.16expenses related to business formation or growth.
45	45	2.17 (d) Forgivable loans under this subdivision shall not exceed $50,000.
46	46	2.18 (e) No business or individual may receive more than one forgivable loan under this
47	47	2.19subdivision.
48	48	2.20 (f) The originating partner shall forgive 100 percent of the loan after three years if the
49	49	2.21business uses funds for approved purposes.
50	50	2.22 (g) Preference shall be given to businesses that seek to hire at least one W-2 employee.
51	51	2.23 Subd. 4.Commercial real estate equity enhancements.(a) The Minneapolis Foundation
52	52	2.24shall provide capital to originating partners to provide equity enhancements for commercial
53	53	2.25real estate developments using criteria and reporting requirements approved by the
54	54	2.26commissioner.
55	55	2.27 (b) To be eligible for an equity enhancement under this subdivision, a project must:
56	56	2.28 (1) have primary business operations located in the state;
57	57	2.29 (2) have total project costs under $10,000,000; and
58	58	2.30 (3) submit a complete development plan.
59	59	2Section 1.
60	60	25-02489 as introduced02/03/25 REVISOR SS/LJ 3.1 (c) Preference shall be given to developments that secure at least 60 percent of senior
61	61	3.2debt through a traditional financial institution and up to 35 percent of junior debt through
62	62	3.3an originating partner that provides capital through the GroundBreak loan pool.
63	63	3.4 (d) Equity enhancements under this subdivision must not exceed $250,000.
64	64	3.5 Subd. 5.Forgivable down payment assistance loans.(a) The Minneapolis Foundation
65	65	3.6shall provide capital to originating partners for the Advancing Black Homeownership
66	66	3.7Community Fund Special Purpose Credit Program or a similar special purpose credit program
67	67	3.8for forgivable down payment assistance loans using criteria and reporting requirements
68	68	3.9approved by the commissioner.
69	69	3.10 (b) To be eligible for a forgivable loan under this subdivision, an applicant must qualify
70	70	3.11as an eligible borrower of an approved special purpose credit program under Code of Federal
71	71	3.12Regulations, title 12, section 1002.8, Regulation B, and:
72	72	3.13 (1) be a resident of the seven-county metropolitan area;
73	73	3.14 (2) have no present ownership interest in a principal residence during the previous
74	74	3.15three-year period; and
75	75	3.16 (3) have annual income equal to or less than the Start Up Income Limits for one to two
76	76	3.17person households published by the Minnesota Housing Finance Agency.
77	77	3.18 (c) Forgivable loans under this subdivision must not exceed $25,000.
78	78	3.19 (d) The originating partner shall forgive 100 percent of the loan over five years subject
79	79	3.20to the following:
80	80	3.21 (1) a loan under this subdivision is forgivable at the rate of 20 percent per year. The
81	81	3.22prorated balance is repayable if the property converts to nonowner occupancy, is sold, is
82	82	3.23subjected to an ineligible refinance, an unauthorized transfer of title, or a completed
83	83	3.24foreclosure action within the loan term;
84	84	3.25 (2) recapture may be waived in the event of a financial or personal hardship with the
85	85	3.26approval of the originating partner; and
86	86	3.27 (3) recaptured funds must be returned to the program for redistribution to eligible
87	87	3.28borrowers.
88	88	3.29 (e) Forgivable loans under this subdivision may be combined with other state, federal,
89	89	3.30or local down payment assistance programs.
90	90	3Section 1.
91	91	25-02489 as introduced02/03/25 REVISOR SS/LJ 4.1 Subd. 6.Program administration.(a) The Minneapolis Foundation shall establish
92	92	4.2appropriate accounting practices for the purpose of tracking forgivable loans and equity
93	93	4.3enhancements.
94	94	4.4 (b) Up to five percent of a forgivable startup loan and commercial real estate equity
95	95	4.5enhancement under this section may be used by originating partners for administration and
96	96	4.6monitoring of the program, and up to an additional three percent may be used by the
97	97	4.7originating partner for technical assistance to applicants for help with language, culture,
98	98	4.8and technology.
99	99	4.9 (c) Up to ten percent of a forgivable down payment assistance loan under this section
100	100	4.10may be used for administration of the program.
101	101	4.11 (d) Any money appropriated in fiscal year 2026 not committed by June 30, 2029, must
102	102	4.12be returned to the commissioner and canceled back to the general fund.
103	103	4.13 Subd. 7.Reporting requirements.(a) By February 15, 2027, and annually until February
104	104	4.1415, 2030, the Minneapolis Foundation shall submit a report to the chairs and ranking minority
105	105	4.15members of the legislative committees with jurisdiction over economic development on the
106	106	4.16use of funds and program outcomes. This report shall include the following:
107	107	4.17 (1) the number of businesses, commercial real estate projects, and homeowners to which
108	108	4.18capital was provided;
109	109	4.19 (2) a description of businesses and commercial real estate projects supported by the
110	110	4.20program;
111	111	4.21 (3) aggregated demographic information as specified by the commissioner regarding
112	112	4.22each recipient; and
113	113	4.23 (4) the program's impact on job creation.
114	114	4.24 (b) The Minneapolis Foundation must establish and maintain a public website reporting
115	115	4.25on the use of funds and any relevant performance measures. Up to four percent of funds
116	116	4.26may be used by the Minneapolis Foundation for administration and monitoring of the
117	117	4.27program.
118	118	4.28 (c) By February 15, 2027, the Minneapolis Foundation must complete an independent
119	119	4.29audit of the use of funds under this section in accordance with standard accounting practices.
120	120	4Section 1.
121	121	25-02489 as introduced02/03/25 REVISOR SS/LJ