Purpose of the Bill

The bill aims to modify and extend the requirements for the Small Business Investment Credit in Minnesota. It seeks to expand eligibility criteria, extend credit allocations, and make the investment process more accessible for small businesses, particularly those in high-technology fields and greater Minnesota areas.

Main Provisions

• Certification Process: Businesses seeking certification as a "qualified small business" or a "qualified greater Minnesota small business" must apply to the commissioner, pay a $150 fee, and meet specific conditions. Certification applications must be available online by November 1 of the preceding year.

• Eligibility Criteria:

  • Businesses must have their headquarters in Minnesota and fulfill other employment and payroll requirements within the state.
  • Businesses are required to engage in innovative activities, particularly in high-tech fields like aerospace, biotechnology, or renewable energy.
  • Exclusion from certification includes businesses involved in specific industries, such as real estate development, insurance, and banking.
  • Businesses must employ fewer than 25 employees and pay an annual wage that meets a specified threshold relative to poverty guidelines.
  • New amendments increase the previous limit on private equity investments from $4 million to $15 million.

• Qualified Investment Criteria: Investments must occur after certification, and businesses must not issue publicly traded securities within 180 days of investment.

• Greater Minnesota Business Requirements: Additional specifications for businesses headquartered in greater Minnesota, including workforce and payroll criteria, aimed at supporting economic development outside metropolitan areas.

Significant Changes

• Increased Equity Limit: The maximum private equity a business can have before becoming ineligible has been increased from $4 million to $15 million.
• Investment Restrictions: Further conditions have been laid out concerning the issue of public securities and liquidation events within a specified period post-investment to maintain eligibility.

Relevant Terms

• Small Business Investment Credit
• Qualified Small Business
• Qualified Greater Minnesota Small Business
• High-Technology Field
• Private Equity Cap Increase
• Commissioner Certification
• Proprietary Technology