Opinion ID: 1578403
Heading Depth: 1
Heading Rank: 3

Heading: The Authority and the Act

Text: 1. The Minnesota Energy and Economic Development Authority (hereinafter the Authority) is a public agency of the State of Minnesota created by Minn.Laws 1983 ch. 289 (codified as Minn.Stat. §§ 116J.875 to 116J.926 and hereinafter referred to as the Act). The Authority is the legal successor to the Minnesota Small Business Finance Agency created by Minn.Laws 1980 ch. 547 as amended. 2. The members and governing body of the Authority consist of the Commissioner of the Department of Energy and Economic Development (hereinafter the Department) and ten individuals appointed by the Governor. (Minn.Stat. § 116J.89, subd. 8 (Supp.1983)). 3. The Governor appoints the Chairman of the Authority (Minn.Stat. § 116J.89, subd. 8 (Supp.1983)). In August, 1983, Mark B. Dayton, the Commissioner of the Department, was duly appointed as Chairman of the Authority. 4. The Commissioner of the Department is required to appoint staff as necessary for the administration of the Authority. (Minn.Stat. § 116J.89, subd. 10 (Supp. 1983)). The Financial Management Division of the Department provides staff, performs credit checks, financial analysis and other duties as required by the Authority. Affidavit of M. Jean Laubach. 5. The Act was passed to promote the welfare and prosperity of the State by maintaining and increasing the career and job opportunities of its citizens; by reducing, controlling, and preventing environmental pollution and waste of resources; and by protecting and enhancing the tax base on which state and local governments depend for the financing of public services. (Minn.Stat. § 116J.89, subd. 2 (1982), as amended by Minn.Laws 1983 ch. 289 § 74). 6. The Authority is empowered to issue bonds, implement loan programs, insure loans and provide financial assistance as a partnership between the public and private sectors, for the public purposes of: (a) providing financial assistance to eligible small businesses for projects on sufficiently favorable terms to assist and encourage the establishment, maintenance and growth of small businesses and employment opportunities in Minnesota; (b) providing financial assistance to eligible small businesses for projects which will help prevent, reduce, abate or control noise, air or water pollution or contamination; and (c) providing financial assistance to promote the conservation of energy, the reduction of the uses of conventional fuels as a source of energy, and the development of alternative and renewable energy resources. (Minn.Stat. §§ 116J.875, 116J.89 and 116J.921). 7. The Authority is empowered by the Act to issue and sell bonds and to use the proceeds to make loans to eligible small businesses for business development projects, pollution control projects and qualified energy projects (Minn.Stat. §§ 116J.90, 116J.91 and 116J.925). 8. Neither the State of Minnesota nor any agency or political subdivision of the State is liable on any bonds issued by the Authority, and such bonds do not constitute a debt or loan of credit of the State. Therefore, neither the full faith and credit nor the taxing power of the State is pledged to the repayment of such bonds. (Minn.Stat. § 116J.89, subd. 3.) 9. Minn.Stat. § 116J.89, subd. 1c creates the economic development fund and provides that all money in the fund is appropriated to the Authority to accomplish the Authority's business development and pollution control purposes. Minn.Laws 1983 ch. 301 § 28 appropriated $15,000,000 to the economic development fund. 10. Minn.Stat. § 116J.925, subd. 3 creates the energy development fund and provides that the Authority may use the fund in connection with bonds issued to make loans for qualified energy projects. Minn. Laws 1983 ch. 301 § 28 appropriated $1,800,000 to the energy development fund. 11. The Authority is empowered by the Act to issue and sell bonds and to use the proceeds to make loans to eligible small businesses for business development projects (Minn.Stat. §§ 116J.90 and 116J.91). 12. The Authority is empowered by the Act to insure loans made to eligible borrowers by private lending institutions for qualified energy projects (Minn.Stat. § 116J.924). Minn.Stat. § 116J.924, subd. 2 creates the energy loan insurance fund and provides that the Authority may use the fund in connection with insurance of such loans. Minn.Laws 1983 ch. 301 § 28 appropriated $7,500,000 to the energy loan insurance fund. 13. In an effort to meet the needs of Minnesota businesses for financing, the Authority established three pilot programs pursuant to Minn.Stat. §§ 116J.875 to 116J.926 (1982 & Supp.1983). These programs are: the Business Loan Bond Insurance Pilot Program, the Energy Development Loan Pilot Program; and the Energy Loan Insurance Pilot Program. Dayton Aff.