8.0. EDSR 11-12-2002 - Laserfiche WebLink

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DTED revises Minnesota Investment Fund proposal Andrea Hedtke • With a potential state budget deficit Over the summer,DTED held to replenish its funding base,while also in excess of$3 billion,programs that a series of meetings with various preserving local capacity to operate are dependent on the state general interested parties,including local local revolving loan funds.Addition- fund are at risk.One of these at-risk government representatives,to discuss ally,a business's loan repayments would programs is the Minnesota Investment potential changes to the MIF program. be returned to the local government Fund(MIF).This grant program, At these meetings,a number of grantee and to the state simultaneously administered by the Dept.of Trade positive comments were made in (currently,the grantee receives the and Economic Development(DTED), support of the activities that local entirety of its share before returning provides financial assistance to new governments have been able to any funds to the state).Finally,"forgiv- or expanding businesses.Grants are undertake with revolving loan funds able"loans would be limited to awarded to local units of government, created and replenished with retained exceptional circumstances authorized which,in turn,make loans for specific funds.Accordingly,DTED has revised by the Commissioner. business projects or to finance public its proposal. DTED is also proposing to infrastructure improvements. The new proposal would still increase the flexibility of the MIF. Local government grantees allow local government grantees to While the goal of job creation would appreciate the fact that the law retain a portion of the repayment remain a primary criterion for assistance, currently allows the first$100,000 dollars,but it would also allow DTED the program would permit the use of repaid by a business to be retained by to recapture the balance of the repay- funds for projects that emphasize the local government.These retained ment dollars to create a permanent productivity investments that may by funds are used to create and replenish state revolving fund dedicated to more focused on company competi- local revolving loan funds.During the making additional MIF grants. tiveness and support job retention. 2002 legislative session,in an effort to Essentially,the new proposal substitutes Further,DTED is proposing to ensure the long-term viability of the a 20 percent amount for the current increase the maximum levels of • MIF,DTED sought legislation that $100,000 amount.For loans made assistance per job in order to target would have redirected the $100,000 after July 1,2003,20 percent of a dollars where they are most needed. amounts currently retained by local business'loan repayment would be The League is interested in your governments to a state revolving loan retained by the local government feedback on this new proposal.If you fund in order to recapitalize the MIF grantee and 80 percent would be have any comments or questions, program.Some local units of govern- returned to DTED. please contact Andrea Hedtke®LJ 0 0 ment expressed concern with this The underlying rationale is that I I IAl IOU®UUm000MI Immm initial proposal. this will ensure that the MIF has funds ® 0®®4 i October 23, 2002 Page 7