Law spends $23.85 million to fund job training, economic development programs

The Department of Employment and Economic Development has an extra $23.85 million to spend on job training and economic development programs in fiscal year 2025.

A new law appropriates $12.16 million from the Workforce Development Fund for employment and training programs and $11.69 million from the General Fund for business and community development programs.

All appropriation provisions give varying degrees of direction to organizations specifying how they must spend their fiscal year 2025 money.

A $5 million fiscal year 2024 appropriation was returned to the General Fund. A 2023 law provided Bloomington to host the World Exposition in 2027; however, Serbia won the bid to host the event.

It also makes policy changes, some aimed at modifying how the department manages programs it operates, including grants it distributes to organizations.

Sponsored by Rep. Hodan Hassan (DFL-Mpls) and Senate President Bobby Joe Champion (DFL-Mpls), the law takes effect July 1, 2024, unless otherwise noted.

HF5205/SF5289*/CH120

Workforce Development Fund spending

The Workforce Development Fund is a special revenue account funded by levies on employers on all taxable wages to provide for employment and training programs throughout the state.

The 10 highest employment and training appropriations called for in the law are:

• $1 million to African Immigrants Community Services for workforce development for new Americans;

• $1 million to Change Starts with Community for a violence prevention program;

• $1 million to the city of Brooklyn Park to develop a biotech innovation district;

• $1 million to the Minnesota Black Chamber of Commerce for technical support to Black-owned small businesses;

• $1 million to WomenVenture for supporting child care providers by providing business training, mentorship, services, and educational materials;

• $700,000 for the Shakopee Chamber Foundation for the Shakopee area workforce development scholarship pilot program;

• $597,000 for infrastructure and associated costs for the Taste of Minnesota;

• $500,000 for the Arrowhead Economic Opportunity Agency to expand workforce development opportunities in the region;

• $500,000 for the Metro Youth Diversion Center to enhance workforce development opportunities for youth with a focus on underrepresented East African students; and

• $500,000 for the Riverside Plaza Tenant Association to address employment, economic, and technology access disparities for low-income unemployed or underemployed individuals through training in health care, technology, and construction or skilled trades industries. (Art. 1, Sec. 2)

A Center for Nursing Equity and Excellence is created at the University of Minnesota to address nursing workforce needs. It is funded with a one-time $250,000 fiscal year 2025 appropriation from the Workforce Development Fund. (Art. 2, Sec. 10)

General Fund spending

Appropriations from the General Fund are earmarked for grants to business and community development programs. The largest in the law are:

• $2.5 million for Launch Minnesota for innovation grants to assist eligible Minnesota entrepreneurs or start-up businesses with their operating needs;

• $1 million to the Entrepreneur Fund to capitalize its revolving loan funds to address unmet financing needs in northeast Minnesota of for-profit business startups, expansions, and ownership transitions;

• $1 million to the New American Development Center to provide small businesses and entrepreneurs with technical assistance, financial education, training, and lending;

• $500,000 to the Asian Economic Development Association for asset building and financial empowerment for entrepreneurs and small-business owners, small-business development and technical assistance, and cultural placemaking;

• $489,000 to the Center for Community Resources for a financial literacy program;

• $400,000 to the Somali Museum of Minnesota for capacity building;

• $300,000 to Fortis Capital for a revolving loan fund to provide risk-mitigating capital for commercial development activities in underserved communities and entrepreneurs from disadvantaged groups statewide;

• $200,000 to the Coalition of Asian American Leaders to support outreach, training, technical assistance, peer network development, and direct financial assistance for Asian Minnesotan women entrepreneurs and Asian-owned businesses; and

• $200,000 to community butcher shops for relocation of such shops.

The law also appropriates General Fund money to support programs through Explore Minnesota Tourism: $2 million to the 2026 Special Olympics USA Games to provide food and housing to athletes; $1.25 million to the Minneapolis Downtown Council for infrastructure and associated costs for the Taste of Minnesota; $825,000 for Explore Minnesota Film; and $400,000 to Ka Joog for Somali community and cultural festivals and events.

Policy provisions

Effective July 1, 2025, a person applying for an individual license to practice as a cosmetologist, hair technician, manager, or instructor must successfully complete training on the properties of the hair and all hair types and textures, including coil, curl, or wave patterns, hair strand thicknesses, and volumes of hair; and have experience providing services to individuals with hair of all types and textures, including coil, curl, or wave patterns, hair strand thicknesses, and volumes of hair.

Among the 600 total hours of training for hair technicians in hair cutting and styling and chemical hair services must, beginning Aug. 1, 2025, include training in services to individuals who have all hair types and textures, including coil, curl, or wave patterns, hair strand thicknesses, and volumes of hair. (Art. 3, Secs. 1-2, 4)

The law also:

• transfers the duties of the Minnesota Film and TV to Explore Minnesota Film, which is established by the law as an office within Explore Minnesota;

• modifies the definition of “dislocated worker” is modified for purposes of access to dislocated worker services in the state’s dislocated worker program. One change is to expand services to the spouse of a member of the U.S. armed forces who is on active duty and who meets certain conditions;

• permits the Department of Employment and Economic Development to transfer up to $5 million (up from $2 million) of a fiscal year’s appropriation between the Minnesota Job Creation Fund program and Minnesota Investment Fund to meet business demand;

• modifies the uses and grant amounts for grants under the Innovative Business Development Public Infrastructure Grant Program;

• adds a representative of a school district facing revenue loss due to energy transition to the Energy Transition Advisory Committee;

• modifies duties, responsibilities, and scope of the Expanding Opportunity Fund and the Minnesota Emerging Entrepreneur programs;

• requires the Small Business Assistance Partnerships program to submit an annual report to the Legislature; and

• clarifies that the state’s independent living services are administered by the Vocational Rehabilitation Services Program. (Art. 2, Sec. 2; Art. 4, Sec. 1; Art. 5, Secs. 1-5; Art. 6, Secs. 1-3; Art. 7, Sec. 1; Art. 9, Secs. 3-4, 6; Art. 10, Sec. 1)

SF5289* / HF5205 / CH120