SF3664

Purpose

• Repeal and replace certain unfunded programs of the Department of Employment and Economic Development.
• Reorient economic development funding toward redevelopment projects with clear public benefits and toward green economy initiatives.
• Update and align several Minnesota statutes and related rules to support redevelopment, job creation, environmental benefits, and regional growth.

Key Provisions and What They Do

• Priority for Redevelopment Grants (116J.575 Subd 1a)

  • When grant applications exceed available money, prioritize projects that deliver high public benefits at public cost.
  • Public benefits include: job creation, bioscience development, environmental benefits, efficient use of public transit and infrastructure, affordable housing, and multiuse development that rebuilds communities.
  • Priority factors (not ranked): contamination cleanup, redevelopment tied to tax increment financing (TIF), redevelopment potential in the municipality, proximity to public transit (metro area), bioscience expansion, affordable housing, green economy promotion, and consideration of transportation and environmental impact.
  • The commissioner may weigh factors as appropriate and may consider other factors that affect the overall return to public benefits.
  • Requirement to distribute grants across the state: at least 50% of money should go to sites outside the metropolitan area if there are qualifying projects; grants should go to both metro and nonmetro sites.

• Eligible Projects and Evaluation (116J.8731 Subd 4)

  • Evaluation is based on multiple conditions, not just one: 1) Creation of new jobs, retention of existing jobs, or improvements in wages/skills. 2) Increase in the tax base. 3) Evidence that public dollars attract private funds. 4) Demonstrated high costs of infrastructure or improvements that exceed the community’s or participants’ ability to pay. 5) Higher wage levels or added value to the local workforce. 6) Support for microenterprises (small businesses). 7) Whether assistance helps retain or attract out-of-state business. 8) Whether the project promotes/advances the green economy.
  • A grant or loan cannot be approved based on a single criterion; multiple criteria must be shown.

• Green Economy and Coordinated Policy

  • The bill emphasizes “green economy” activities, defined (see Appendix) to include renewable energy, energy efficiency, greenhouse gas reductions, water quality, biofuels, and green chemistry.
  • Establishes coordination efforts among state agencies to promote green enterprise and speed approvals for green economy projects.
  • Examples of green economy uses include leveraging energy savings, reducing emissions, and improving environmental quality as part of economic development.

• Clean Water Revolving Fund Enhancements (446A.07 Subd 8 and 9)

  • Uses of the Clean Water Revolving Fund (CWRF) include debt refinancing for treatment works, guarantees or insurance to improve credit access, revenue security for debt service, and administration costs.
  • New subsidy provisions:
  • Up to 25% of project costs (maximum $1,000,000) for green infrastructure, water/energy efficiency, or other environmentally innovative activities.
  • Up to 50% of project costs (maximum $3,000,000) for projects addressing emerging contaminants.
  • Payments must follow state and federal law, with specific financial safeguards (e.g., cost estimates, binding commitments to use funds for the project, and securing funds via loans or bonds).

• Economic Response and Other Programs (Sec. 3 and related)

  • The bill continues or expands programs related to economic development, including a framework for supportive assistance tied to green economy goals.
  • Provisions related to tourism-related loan programs and other supports, as defined in the statutes, may be referenced here as part of the overall economic development toolkit.

• Repeals and Rule Revisions (Sec. 5)

  • Repeals several older Minnesota statutes related to economic development and environmental policy (116J.437, 116J.438, 116J.617, 116J.658, 116J.872).
  • Repeals Minnesota Rules part 3300.0500 subparts 1, 2a, 3, 4, 5, and 6.
  • The repeal reflects a shift away from older, unfunded programs toward the revised set of tools described above.

• Fast-Action Economic Response Team

  • Establishes or continues a fast-action team within the department to contact at-risk businesses or those considering expansion or relocation within 24 hours.
  • Aims to speed up support and decision-making for businesses facing strategic decisions.

• Definitions and Organizational Guidance (Appendix)

  • Includes a formal definition of “green economy” and describes how it fits into the coordinated economic development framework.
  • Sets expectations for coordinated participation among state agencies, public universities, and private sector partners to advance science, technology, and economic growth.

Significant Changes to Existing Law

• Shifts funding emphasis from old, unfunded programs to redeveloped sites with measurable public benefits and to green economy projects.
• Expands and clarifies criteria for grant/loan decisions to require multiple benefits (jobs, tax base, private leverage, affordability, etc.).
• Broadens the role and funding support for green infrastructure, water quality, and emerging contaminants through the Clean Water Revolving Fund with specific cost-sharing subsidies.
• Repeals several older statutes and rules, consolidating policy under revised guidelines and definitions (notably around green economy and redevelopment).
• Introduces a fast-action economic response mechanism to speed outreach to businesses.

Quick Implications

• More emphasis on brownfield/redevelopment projects that combine housing, transit access, and environmental benefits.
• Increased use of state funds to leverage private investment, with attention to rural/nonmetro distribution.
• Greater focus on environmental quality and green economy activities within economic development.

Relevant Terms - public benefits - redevelop/ redevelopment - job creation / job retention - bioscience development - green economy - tax increment financing (TIF) - affordable housing - public transit / proximity to transit - contamination remediation / brownfield - environmental benefits / green infrastructure - emerging contaminants - Clean Water Revolving Fund (CWRF) - energy efficiency - renewable energy - greenhouse gas emissions reduction - microenterprises - private funds leverage / private investment - out-of-state business attraction - revolving fund / grants and loans - loan guarantees - fast-action economic response team - Minnesota Green Enterprise Assistance - coordinated economic development and environmental policy