HF3732

Purpose

• This bill would reorganize Minnesota’s economic development programs by repealing several older, unfunded or outdated initiatives and replacing them with updated rules for awarding grants and loans. The focus is on redeveloping communities, supporting a “green economy,” boosting bioscience and technology, and improving public infrastructure and housing. It also tightens how funds from state lending programs are used and how projects are evaluated.

Main Provisions

• Redevelopment grants and site selection (116J.575 Subd.1a):
  • When grant applications exceed available money, priority goes to sites that give the highest public benefits at public cost. Public benefits include job creation, bioscience development, environmental benefits, efficient use of transit and infrastructure, affordable housing, multiuse community development, crime and blight reduction, and strengthening the property tax base.
  • Factors to consider include: contamination cleanup needs, compliance with current tax increment financing (TIF) rules for redevelopment, redevelopment potential in the area, proximity to public transit (especially in the metro), bioscience expansion, and multi-jurisdiction considerations that include housing and environmental impact.
  • The commissioner may weigh factors as appropriate and may consider other factors that affect the overall public benefits. Money should be distributed to sites inside and outside the metro area, and at least 50% should go to sites outside the metro if there are qualifying applications outside the metro.
• Project eligibility and evaluation (116J.8731 Subd.4):
  • Eligible projects must show: creation or retention/improvement of jobs (measured by wages/skills/education), a higher tax base, ability to attract private funds with public dollars, ability to cover unusually high infrastructure or improvement costs beyond what the community and private participants can bear, higher wage levels or value-added to the workforce, support for microenterprises, ability to retain or attract out-of-state business, and advancement of the green economy.
  • Grants or loans cannot be approved based only on one or two conditions; multiple conditions must be present.
• Clean Water Revolving Fund uses and subsidies (446A.07 Subd.8 and Subd.9):
  • Expands uses of the Clean Water Revolving Fund, including debt refinancing for treatment works, credit improvements, and providing loan guarantees or set-asides for similar funds.
  • Adds subsidies and affordability provisions, including:
  • Up to 25% of project costs for green infrastructure, water, or energy efficiency improvements (up to $1,000,000).
  • Up to 50% of project costs for projects addressing emerging contaminants (up to $3,000,000).
  • Payments from the fund must follow state and federal rules, with requirements for financing commitments and project cost estimates.
• Repeals and repealed programs (Sec.5 and Appendix):
  • Repeals several older statutes related to economic development, green enterprise assistance, tourism loans, science/technology initiatives, and rapid-response economic programs.
  • Repeals Minnesota Rules part 3300.0500 (rules governing youth employment programs and related procedures), along with related definitions and programs described in the appendix.
  • The effect is to remove certain legacy programs and align state policy with the new priorities described above.

Changes to Existing Law

• Amended priorities for grant giving (116J.575 Subd.1a) and project evaluation (116J.8731 Subd.4) to emphasize redevelopment, green economy, and public benefits, with explicit geographic distribution rules (favoring outside the metro when possible).
• Expanded authority and uses of the Clean Water Revolving Fund (446A.07 Subd.8) to include green infrastructure, emerging contaminants, and broader financing tools (debt refinancing, guarantees, set-asides).
• Updated payment and cost-coverage requirements (446A.07 Subd.9) to ensure project cost estimates, financing plans, and enforceable commitments before money is disbursed.
• Eliminates outdated programs and rules by repealing sections and related rule parts (Sec.5), signaling a shift away from older state programs toward the new framework.

Repeals and Replaced Programs

• Repealed or replaced:
  • 116J.437, 116J.438, 116J.617 subdivisions 1–4, 116J.658, 116J.872.
  • Minnesota Rules part 3300.0500 subparts 1–6.
  • Several named programs and activities including Minnesota Green Enterprise Assistance, Tourism Loan Program, Minnesota Science and Technology Economic Development Project, and related fast-action economic response activities.
• The appendix lists what those repealed programs covered, including coordination between economic development and environmental policy, green enterprise assistance, tourism loans, and science/tech development efforts.

Implementation and Impact

• The bill shifts how public benefits are weighed in grant decisions, with a stronger emphasis on environmentally sustainable development, bioscience, and affordable housing.
• It creates and expands funding mechanisms and subsidies for green infrastructure and emerging contaminants, potentially increasing investments in water quality and environmental projects.
• By repealing several older programs, the bill reduces duplicative or outdated efforts and directs resources toward the updated priorities and a broader geographic reach.

Relevant Terms - public benefits - redevelopment - grant priority factors - bioscience development - green economy - proximity to public transit - affordable housing - blight reduction - crime reduction - tax base - tax increment financing (TIF) - private funds leverage - job creation and retention - higher wages - microenterprises - out-of-state investment - Clean Water Revolving Fund - green infrastructure - emerging contaminants - subsidies and cost sharing - revolving fund - loan guarantees - set-asides - repeals of old programs - Minnesota Green Enterprise Assistance - Tourism Loan Program - science and technology development - environmental policy coordination