HF4884

Purpose

This bill adds sunsetting funding and creates new programs to support Minnesota workers and small businesses. It aims to provide targeted job training, connect workers with in-demand industries, help struggling small businesses survive, and make small changes to existing laws related to economic development and infrastructure.

Main Provisions and Programs

• Pathways to Prosperity program (116L.981)

  • What it is: A new competitive grant program for government entities and nonprofits.
  • Purpose: Fund workforce training for adults facing barriers to employment, helping people prepare for long-term, family-sustaining careers in in-demand industries.
  • How it works: Grants are awarded through a competitive process with specific scoring criteria.
  • Key requirements for grantees:
  • Serve people facing barriers (e.g., long-term unemployed, justice-involved, limited English proficiency).
  • Align training with local labor markets.
  • Provide wraparound supports (housing, transportation, childcare, ESL/Adult basic education).
  • Offer individualized counseling and a pathway to credentials or certificates.
  • Include employer and postsecondary partners, with clear reporting.
  • Outcomes: Report performance with a goal that most participants complete and exit into a job or continue education; include metrics showing progress toward employment goals.

• Drive for Five program (116L.982)

  • What it is: A second major grant program to fill high-wage, high-demand job openings in specified industries.
  • Eligible industries: Technology, manufacturing, health care, education and professional services, and related sectors (with room to add others based on labor market data).
  • Eligible recipients: Nonprofits, government units, tribal governments, community action agencies, postsecondary institutions, labor organizations, etc.
  • How grants work: Competitive grants to organizations that train workers and connect them to jobs.
  • Uses of funds: Job skills training, career counseling, paid work-based learning, industry-recognized credentials, support services, and job placement/retention assistance.
  • Outcomes and priorities: Similar to Pathways to Prosperity, with a requirement that at least 60% of participants exit to unsubsidized employment at or above a designated wage, and a performance variance limit within 15%.
  • Priority: Favor grants that partner with Drive for Five industry sector training programs.

• Drive for Five Employer Engagement Team (116L.983)

  • What it is: A dedicated team of business service representatives inside the workforce system.
  • Role: Act as the main contact for local employers, match job seekers to openings, organize job fairs, and coordinate with area workforce boards to fill openings in small and mid-size companies.

• Emergency Relief Loans for Impacted Small Businesses (Article 4)

  • Purpose: Help small Minnesota businesses survive economic harm by providing loan participation through partner organizations.
  • How it works:
  • The state buys a 100% participation in loans made by partner organizations to eligible recipients.
  • Loan amounts: 2,500 to 25,000; term up to 39 months.
  • Terms: 0% interest, no required loan payments for the first 90 days, personal guarantees required from owners, no required matching funds from recipients.
  • Eligible uses: Ongoing operating costs like payroll, leases/mortgage, inventory, utilities, etc. Not for buying fixed assets or major renovations.
  • Forgiveness: After 18 consecutive on-time payments, up to 50% of the outstanding principal may be forgiven; the forgiven portion is not taxable in Minnesota.
  • Administration: Partner organizations handle underwriting, servicing, and monitoring; a fee of 8% is paid to the partner when the state purchases the loan participation.
  • Oversight and reporting: Partners must report quarterly on loan activity; the state will provide a final report to legislative leaders.
  • Expiration: The program lasts through December 31, 2033.

• Development restrictions expiration (amendment to 116J.435)

  • Change: If a public infrastructure project funded by a grant is not developed within ten years, the funded infrastructure may be used for other lawful projects, with notice to the commissioner.
  • Purpose: Provide flexibility to repurpose infrastructure investments if original plans stall.

• Onetime appropriations and related funding (Article 1)

  • Funding for Department of Employment and Economic Development (DEED):
  • A first-year onetime appropriation (FY2026) for emergency relief loans to businesses under Article 4.
  • A second-year onetime appropriation (FY2027) for workforce development grants and related services.
  • Purpose: Supply the new programs (Pathways to Prosperity, Drive for Five) and the emergency loan program.

• Administrative provisions

  • Grants and reporting: Clear plain-language reporting requirements for grant recipients; performance metrics aligned with program goals.
  • Partnership emphasis: Strong emphasis on partnerships among government, nonprofits, employers, and postsecondary institutions.

Significant Changes to Existing Law

• Creation of new statewide training and grant programs:
  • 116L.981 Pathways to Prosperity program (new)
  • 116L.982 Drive for Five (new)
  • 116L.983 Drive for Five Employer Engagement Team (new)
• Reforms to small business relief:
  • Emergency Relief Loans for Impacted Small Businesses (new) with state-backed loan participation and forgiveness features.
• Infrastructure flexibility:
  • Development restrictions expiration (Subd.8) to allow repurposing unneeded infrastructure investments.
• Statutory updates and repeals:
  • Amendments to Minnesota Statutes 2024 section 116J.435 (adding Subd. 8) and adding new sections to 116L and related provisions.
  • Repeal of Minnesota Statutes 2024 section 326B.33 subdivisions 5 and 6 (as referenced in the bill).
• Expiration timeline:
  • The new programs include explicit expiration dates and reporting deadlines, with the Emergency Relief Loans program set to expire in 2033.

Timeline and Availability

• Onetime funding in 2026 for emergency relief loans to assist small businesses.
• Onetime funding in 2027 for workforce development grants and related services.
• Programs and funding available through the 2033 expiration for the loan program; ongoing reporting to lawmakers.

Expected Impacts

• More targeted job training options for adults facing barriers to employment.
• Stronger link between training providers and actual job openings in in-demand industries.
• Safer roadway for small businesses to obtain working capital during economic difficulties.
• Increased employer engagement in workforce development and better alignment with labor market needs.
• Clear performance expectations and accountability for funded programs.

Relevant Terms - Pathways to Prosperity - Drive for Five - Drive for Five industry sector training - Drive for Five Employer Engagement Team - Emergency Relief Loans for Impacted Small Businesses - Minnesota Department of Employment and Economic Development (DEED) - competitive grants - wraparound services - unsubsidized employment - family-sustaining wage - high-wage high-demand industries - eligible recipient - employer partnership - paid work-based learning - industry-recognized credential - job placement and retention - quarterly reporting - performance metrics - loan participation - zero-interest loan - loan forgiveness - infrastructure development restrictions expiration - onetime appropriations - small business assistance - workforce development grants - eligibility and basic education supports (ESL/ABE)