HF 2770

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:32pm

A bill for an act
relating to taxation; insurance; providing a credit for investment in start-up and
emerging Minnesota businesses; proposing coding for new law in Minnesota
Statutes, chapters 116J; 297I.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116J.665] MINNESOTA BUSINESS INVESTMENT COMPANY
CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Affiliate" means:
new text end

new text begin (1) any person who, directly or indirectly, beneficially owns, controls, or holds
power to vote 15 percent or more of the outstanding voting securities or other voting
ownership interest of a Minnesota business investment company or insurance company; or
new text end

new text begin (2) any person, 15 percent or more of whose outstanding voting securities or other
voting ownership interests are directly or indirectly beneficially owned, controlled, or held
with power to vote by a Minnesota business investment company or insurance company.
new text end

new text begin Notwithstanding this subdivision, an investment by a participating investor in a
Minnesota business investment company pursuant to an allocation of premium tax credits
under this section does not cause that Minnesota business investment company to become
an affiliate of that participating investor.
new text end

new text begin (c) "Allocation date" means the date on which credits under section 297I.23 are
allocated to the participating investors of a Minnesota business investment company
under this section.
new text end

new text begin (d) "Designated capital" means an amount of money that:
new text end

new text begin (1) is invested by a participating investor in a Minnesota business investment
company; and
new text end

new text begin (2) fully funds the purchase price of either or both participating investor's equity
interest in a Minnesota business investment company or a qualified debt instrument issued
by a Minnesota business investment company.
new text end

new text begin (e) "Minnesota business investment company" means a partnership, corporation,
trust, or limited liability company, organized on a for-profit basis, that:
new text end

new text begin (1) has its principal office located or is headquartered in Minnesota;
new text end

new text begin (2) has as its primary business activity the investment of cash in qualified businesses;
and
new text end

new text begin (3) is certified by the Department of Employment and Economic Development as
meeting the criteria in this section.
new text end

new text begin (f) "Participating investor" means any insurance company as defined in section
60A.02, subdivision 4, excluding health maintenance organizations, that contributes
designated capital pursuant to this section.
new text end

new text begin (g) "Person" means any natural person or entity, including, but not limited to, a
corporation, general or limited partnership, trust, or limited liability company.
new text end

new text begin (h)(1) "Qualified business" means a business that is independently owned and
operated and meets all of the following requirements:
new text end

new text begin (i) it is headquartered in Minnesota, its principal business operations are located in
this state, and at least 80 percent of its employees are located in Minnesota;
new text end

new text begin (ii) it has no more than 100 employees;
new text end

new text begin (iii) it is not engaged in:
new text end

new text begin (A) professional services provided by accountants, doctors, or lawyers;
new text end

new text begin (B) banking or lending;
new text end

new text begin (C) real estate development;
new text end

new text begin (D) insurance;
new text end

new text begin (E) oil and gas exploration;
new text end

new text begin (F) direct gambling activities;
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new text begin (G) retail sales; or
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new text begin (H) making loans to or investments in a Minnesota business investment company
or an affiliate; and
new text end

new text begin (iv) it is not a franchise of and has no financial relationship with a Minnesota business
investment company or any affiliate of a Minnesota business investment company prior to
a Minnesota business investment company's first qualified investment in the business;
new text end

new text begin (2) a business classified as a qualified business at the time of the first qualified
investment in the business remains classified as a qualified business and may receive
continuing qualified investments from any Minnesota business investment company.
Continuing investments constitute qualified investments even though the business may not
meet the definition of a qualified business at the time of the continuing investments.
new text end

new text begin (i) "Qualified debt instrument" means a debt instrument issued by a Minnesota
business investment company which meets all of the following criteria:
new text end

new text begin (1) it is issued at par value or a premium; and
new text end

new text begin (2) it has an original maturity date of at least four years from the date of issuance,
and a repayment schedule which is not faster than a level principal amortization over
four years.
new text end

new text begin (j) "Qualified distribution" means any distribution or payment made by a Minnesota
business investment company in connection with any of the following:
new text end

new text begin (1) costs and expenses of forming, syndicating, and organizing the Minnesota
business investment company, including fees paid for professional services, and the costs
of financing and insuring the obligations of a Minnesota business investment company,
provided no payment is made to a participating investor;
new text end

new text begin (2) an annual management fee not to exceed one percent of designated capital on
an annual basis to offset the costs and expenses of managing and operating a Minnesota
business investment company;
new text end

new text begin (3) reasonable and necessary fees in accordance with industry custom for ongoing
professional services, including, but not limited to, legal and accounting services related
to the operation of a Minnesota business investment company, not including lobbying or
governmental relations;
new text end

new text begin (4) any increase or projected increase in federal or state taxes, including penalties
and related interest of the equity owners of a Minnesota business investment company
resulting from the earnings or other tax liability of a Minnesota business investment
company to the extent that the increase is related to the ownership, management, or
operation of a Minnesota business investment company.
new text end

new text begin (5) Payments of principal and interest to holders of qualified debt instruments issued
by a Minnesota business investment company may be made without restriction whatsoever.
new text end

new text begin (k) "Qualified investment" means the investment of money by a Minnesota
business investment company in a qualified business for the purchase of any debt,
debt participation, equity, or hybrid security of any nature and description whatsoever,
including a debt instrument or security that has the characteristics of debt but that provides
for conversion into equity or equity participation instruments such as options or warrants.
Any repayment of a qualified investment prior to one year from the date of issuance shall
result in the amount of the qualified investment being reduced by 50 percent for purposes
of the cumulative investment requirement in subdivision 8, paragraph (d).
new text end

new text begin (l) "State premium tax liability" means any liability incurred by an insurance
company under chapter 297I or in the case of a repeal or a rate reduction by the state of
the liability imposed by chapter 297I, any other tax liability imposed upon an insurance
company by the state, other than the tax imposed on taxpayers under section 290.05.
new text end

new text begin Subd. 2. new text end

new text begin Certification. new text end

new text begin (a) The department must provide a standardized format for
applying for the business investment credit under section 297I.23, and for certification as a
Minnesota business investment company.
new text end

new text begin (b) An applicant for certification as a Minnesota business investment company
is required to:
new text end

new text begin (1) file an application with the department that includes, without limitation, a
statement that the applicant has read and understands the requirements of this chapter;
new text end

new text begin (2) pay a nonrefundable application fee of $7,500 at the time of filing the application;
new text end

new text begin (3) submit as part of its application an audited balance sheet that contains an
unqualified opinion of an independent certified public accountant issued not more than 35
days before the application date that states that the applicant has an equity capitalization
of $500,000 or more in the form of unencumbered cash, marketable securities, or other
liquid assets; and
new text end

new text begin (4) have at least two principals or persons, at least one of which is primarily located
in Minnesota, employed or engaged to manage the funds who each have a minimum of
five years of money management experience in the venture capital or business industry.
new text end

new text begin (c) The department may certify partnerships, corporations, trusts, or limited liability
companies, organized on a for-profit basis, which submit an application to be designated as
a Minnesota business investment company if the applicant is located, headquartered, and
licensed or registered to conduct business in Minnesota, has as its primary business activity
the investment of cash in qualified businesses, and meets the other criteria in this section.
new text end

new text begin (d) The department must review the organizational documents of each applicant
for certification and the business history of each applicant and determine whether the
applicant has satisfied the requirements of this section.
new text end

new text begin (e) Within 45 days after the receipt of an application, the department must issue the
certification or refuse the certification and communicate in detail to the applicant the
grounds for refusal, including suggestions for the removal of such grounds.
new text end

new text begin (f) The department must begin accepting applications to become a Minnesota
business investment company as defined under section 297I.23 by August 1, 2010.
new text end

new text begin (g) All certification fees collected by the department under this chapter are
appropriated to the commissioner to be used for personnel and administrative expenses
related to administering the program.
new text end

new text begin Subd. 3. new text end

new text begin Requirements. new text end

new text begin (a) A participating investor or affiliate of a participating
investor must not, directly or indirectly:
new text end

new text begin (1) beneficially own, whether through rights, options, convertible interest, or
otherwise, 15 percent or more of the voting securities or other voting ownership interest of
a Minnesota business investment company;
new text end

new text begin (2) manage a Minnesota business investment company; or
new text end

new text begin (3) control the direction of investments for a Minnesota business investment
company.
new text end

new text begin (b) A Minnesota business investment company may obtain one or more guaranties,
indemnities, bonds, insurance policies, or other payment undertakings for the benefit
of its participating investors from any entity, except that in no case can more than one
participating investor of a Minnesota business investment company on an aggregate
basis with all affiliates of the participating investor be entitled to provide the guaranties,
indemnities, bonds, insurance policies, or other payment undertakings in favor of the
participating investors of a Minnesota business investment company and its affiliates in
this state.
new text end

new text begin (c) This subdivision does not preclude a participating investor, insurance company,
or other party from exercising its legal rights and remedies, including, without limitation,
interim management of a Minnesota business investment company, in the event that a
Minnesota business investment company is in default of its statutory obligations or its
contractual obligations to the participating investor, insurance company, or other party, or
from monitoring a Minnesota business investment company to ensure its compliance with
this section or disallowing any investments that have not been approved by the department.
new text end

new text begin (d) The department may contract with an independent third party to review,
investigate, and certify that the applications comply with this section.
new text end

new text begin Subd. 4. new text end

new text begin Aggregate limitations on investment tax credits; allocation. new text end

new text begin (a)
The aggregate amount of investment tax credits to be allocated to all participating
investors of Minnesota business investment companies under this section shall not exceed
$100,000,000. No Minnesota business investment company, on an aggregate basis with its
affiliates, may file credit allocation claims that exceed $100,000,000.
new text end

new text begin (b) Credits must be allocated to participating investors in the order that the credit
allocation claims are filed with the department, provided that all credit allocation
claims filed with the department on the same day must be treated as having been filed
contemporaneously. Any credit allocation claims filed with the department prior to the
initial credit allocation claim filing date are deemed to have been filed on the initial credit
allocation claim filing date. The department must set the initial credit allocation claim
filing date not less than 120 days and not greater than 150 days after the department
begins accepting applications for certification.
new text end

new text begin (c) In the event that two or more Minnesota business investment companies file
credit allocation claims with the department on behalf of their respective participating
investors on the same day, and the aggregate amount of credit allocation claims exceeds
the aggregate limit of investment tax credits under this section or the lesser amount of
credits that remain unallocated on that day, then the department must allocate the credits
among the participating investors who filed on that day on a pro rata basis with respect
to the amounts claimed. The pro rata allocation for any one participating investor is the
product obtained by multiplying a fraction, the numerator of which is the amount of the
credit allocation claim filed on behalf of a participating investor and the denominator of
which is the total of all credit allocation claims filed on behalf of all participating investors
on that day, by the aggregate limit of credits under this section or the lesser amount of
credits that remain unallocated on that day.
new text end

new text begin (d) Within ten business days after the department receives a credit allocation claim
filed by a Minnesota business investment company on behalf of one or more of its
participating investors, the department must notify the Minnesota business investment
company of the amount of credits allocated to each of the participating investors of that
Minnesota business investment company. In the event a Minnesota business investment
company does not receive an investment of designated capital from each participating
investor required to earn the amount of credits allocated to the participating investor
within ten business days of the Minnesota business investment company's receipt of notice
of allocation, then it shall notify the department on or before the next business day, and
the credits allocated to the participating investor of the Minnesota business investment
company are forfeited. The department must then reallocate those forfeited credits among
the participating investors of the other Minnesota business investment companies on a pro
rata basis with respect to the credit allocation claims filed on behalf of the participating
investors. The commissioner is authorized, but not required, to levy a fine of not more than
$50,000 on any participating investor that does not invest the full amount of designated
capital required to fund the credits allocated to it by the department in accordance with the
credit allocation claim filed on its behalf.
new text end

new text begin (e) No participating investor, on an aggregate basis with its affiliates, may file an
allocation claim for more than 25 percent of the maximum amount of investment tax
credits authorized under this subdivision, regardless of whether the claim is made in
connection with one or more Minnesota business investment companies.
new text end

new text begin Subd. 5. new text end

new text begin Requirements for continuance of certification. new text end

new text begin (a) To maintain its
certification, a Minnesota business investment company must make qualified investments
as follows:
new text end

new text begin (1) within two years after the allocation date, a Minnesota business investment
company must invest an amount equal to at least 35 percent of its designated capital in
qualified investments; and
new text end

new text begin (2) within three years after the allocation date, a Minnesota business investment
company must invest an amount equal to at least 50 percent of its designated capital
in qualified investments.
new text end

new text begin (b) Prior to making a proposed qualified investment in a specific business, a
Minnesota business investment company must request from the department a written
determination that the proposed investment qualifies as a qualified investment in a
qualified business. The department must notify a Minnesota business investment company
within ten business days from the receipt of a request of its determination and an
explanation thereof. If the department fails to notify the Minnesota business investment
company of its determination within the ten-business-day period, the proposed investment
is deemed a qualified investment in a qualified business. If the department determines that
the proposed investment does not meet the definition of a qualified investment or qualified
business, or both, the department may nevertheless consider the proposed investment a
qualified investment and, if necessary, the business a qualified business, if the department
determines that the proposed investment furthers state economic development.
new text end

new text begin (c) All designated capital not invested in qualified investments by a Minnesota
business investment company shall be held or invested in such manner as the Minnesota
business investment company, in its discretion, deems appropriate. Designated capital
and proceeds of designated capital returned to a Minnesota business investment company
after being originally invested in qualified investments may be invested again in qualified
investments and the investment shall count toward the requirements of paragraph (a) with
respect to making investments of designated capital in qualified investments.
new text end

new text begin (d) If, within four years after its allocation date, a Minnesota business investment
company has not invested at least 60 percent of its designated capital in qualified
investments, the Minnesota business investment company must not be permitted to pay
management fees.
new text end

new text begin (e) If, within six years after its allocation date, a Minnesota business investment
company has not invested at least 100 percent of its designated capital in qualified
investments, the Minnesota business investment company must not be permitted to pay
management fees.
new text end

new text begin (f) A Minnesota business investment company may not invest more than 15 percent
of its designated capital in any one qualified business without the specific approval
of the department.
new text end

new text begin (g) For purposes of calculating the investment percentage thresholds of paragraph
(a), the cumulative amount of all qualified investments made by a Minnesota business
investment company from the allocation date must be considered.
new text end

new text begin Subd. 6. new text end

new text begin Minnesota business investment company reporting requirements. new text end

new text begin (a)
Each Minnesota business investment company must report the following to the department
in the form designated by the commissioner:
new text end

new text begin (1) as soon as practicable after the receipt of designated capital:
new text end

new text begin (i) the name of each participating investor from which the designated capital was
received, including such participating investor's insurance tax identification number;
new text end

new text begin (ii) the amount of each participating investor's investment of designated capital; and
new text end

new text begin (iii) the date on which the designated capital was received;
new text end

new text begin (2) on an annual basis, on or before January 31 of each year:
new text end

new text begin (i) the amount of the Minnesota business investment company's designated capital
that remains to be invested in qualified investments at the end of the immediately
preceding taxable year;
new text end

new text begin (ii) whether or not the Minnesota business investment company has invested more
than 15 percent of its total designated capital in any one business;
new text end

new text begin (iii) all qualified investments that the Minnesota business investment company has
made in the previous taxable year, including the number of employees of each qualified
business in which it has made investments at the time of such investment, and as of
December 1 of the preceding taxable year; and
new text end

new text begin (iv) for any qualified business where the Minnesota business investment company
no longer has an investment, the Minnesota business investment company must provide
employment figures for that company as of the last day before the investment was
terminated;
new text end

new text begin (3) other information that the department may reasonably request that helps the
department ascertain the impact of the Minnesota business investment company program
both directly and indirectly on the economy of the state including, but not limited to, the
number of jobs created by qualified businesses that have received qualified investments;
new text end

new text begin (4) within 90 days of the close of its fiscal year, annual audited financial statements
of the Minnesota business investment company, which must include the opinion of an
independent certified public accountant; and
new text end

new text begin (5) an agreed upon procedures report or equivalent regarding the operations of the
Minnesota business investment company.
new text end

new text begin (b) A Minnesota business investment company must pay to the department an
annual, nonrefundable certification fee of $5,000 on or before April 1, or $10,000 if later.
No annual certification fee is required if the payment date for the fee is within six months
of the date a Minnesota business investment company is first certified by the department.
new text end

new text begin (c) Upon satisfying the requirements of subdivision 5, paragraph (a), clause (2),
a Minnesota business investment company must provide the notice to the department
and the department shall, within 60 days of receipt of the notice, either confirm that the
Minnesota business investment company has satisfied the requirements of subdivision
5, paragraph (a), clause (2), as of such date or provide notice of noncompliance and an
explanation of any existing deficiencies. If the department does not provide notification
within 60 days, the Minnesota business investment company is deemed to have met the
requirements of subdivision 5, paragraph (a), clause (2).
new text end

new text begin Subd. 7. new text end

new text begin Distributions. new text end

new text begin (a) A Minnesota business investment company may
make qualified distributions at any time. In order for a Minnesota business investment
company to make a distribution other than a qualified distribution to its equity holders,
the cumulative amount of all qualified investments of the Minnesota business investment
company must equal or exceed 100 percent of its designated capital.
new text end

new text begin (b) The state shall receive ten percent of the net profits on qualified investments.
For purposes of this paragraph, "net profits on qualified investments" means the amount
of money returned to the Minnesota business investment company in exchange for or
repayment of its qualified investments in qualified businesses in excess of the amount
invested by the Minnesota business investment company in qualified investments. The
net profits on qualified investments are the aggregate of all of the Minnesota business
investment company's qualified investments where gains on qualified investments are
netted against losses on qualified investments.
new text end

new text begin Subd. 8. new text end

new text begin Decertification. new text end

new text begin (a) The department shall conduct an annual review of
each Minnesota business investment company to determine if a Minnesota business
investment company is abiding by the requirements of certification and to ensure that no
investment has been made in violation of this section. The cost of the annual review
must be paid by each Minnesota business investment company according to a reasonable
fee schedule adopted by the department.
new text end

new text begin (b) Any material violation of this section, including any material misrepresentation
made to the department in connection with the application process, is grounds for
decertification of a Minnesota business investment company and the disallowance of
credits under section 297I.23, provided that in all instances the department shall provide
notice to the Minnesota business investment company of the grounds of the proposed
decertification and the opportunity to cure the violation before any decertification becomes
effective.
new text end

new text begin (c) The department shall send written notice of decertification to the commissioner
of revenue and to the address of each participating investor whose tax credit may be
subject to recapture or forfeiture, using the address shown on the last filing submitted
to the department.
new text end

new text begin (d) Once a Minnesota business investment company has invested an amount
cumulatively equal to 100 percent of its designated capital in qualified investments,
provided that the Minnesota business investment company has met all other requirements
under this section as of such date, the Minnesota business investment company is no
longer subject to regulation by the department or the reporting requirements under
subdivision 6. Upon receiving certification by a Minnesota business investment company
that it has invested an amount equal to 100 percent of its designated capital, the department
shall notify a Minnesota business investment company within 60 days that it has or has not
met the requirements, with a reason for the determination if it has not. If the department
does not provide notification of deregulation within 60 days, the Minnesota business
investment company is deemed to have met the requirements and is deemed to no longer
be subject to regulation by the department.
new text end

new text begin Subd. 9. new text end

new text begin Registration requirements. new text end

new text begin All investments by participating investors
for which tax credits are awarded under this section must be registered or specifically
exempt from registration.
new text end

new text begin Subd. 10. new text end

new text begin Rulemaking. new text end

new text begin The commissioner's actions in establishing procedures and
requirements and in making determinations and certifications to administer this section are
not a rule for purposes of chapter 14, are not subject to the Administrative Procedure Act
contained in chapter 14, and are not subject to section 14.386.
new text end

new text begin Subd. 11. new text end

new text begin Reports to governor and legislature. new text end

new text begin The department shall make
an annual report to the governor and the chairs and ranking minority members of the
committees having jurisdiction over taxes and economic development. The report must
include:
new text end

new text begin (1) the number of Minnesota business investment companies holding designated
capital;
new text end

new text begin (2) the amount of designated capital invested in each Minnesota business investment
company;
new text end

new text begin (3) the cumulative amount that each Minnesota business investment company has
invested as of January 1, 2011, and the cumulative total each year thereafter;
new text end

new text begin (4) the cumulative amount of follow-on capital that the investments of each
Minnesota business investment company have created in terms of capital invested in
qualified businesses at the same time or subsequent to investments made by a Minnesota
business investment company in such businesses by sources other than Minnesota
business investment companies;
new text end

new text begin (5) the total amount of investment tax credits applied under this section for each year;
new text end

new text begin (6) the performance of each Minnesota business investment company with regard to
the requirements for continued certification;
new text end

new text begin (7) the classification of the companies in which each Minnesota business investment
company has invested according to industrial sector and size of company;
new text end

new text begin (8) the gross number of jobs created by investments made by each Minnesota
business investment company and the number of jobs retained;
new text end

new text begin (9) the location of the companies in which each Minnesota business investment
company has invested;
new text end

new text begin (10) those Minnesota business investment companies that have been decertified,
including the reasons for decertification; and
new text end

new text begin (11) other related information as necessary to evaluate the effect of this section on
economic development.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [297I.23] MINNESOTA BUSINESS INVESTMENT COMPANY CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin (a) A participating investor as defined under section
116J.665, subdivision 1, is allowed a credit against the tax imposed in this chapter equal to
80 percent of the participating investor's investment of designated capital in a Minnesota
business investment company. Beginning January 1, 2014, in tax years 2014 to 2017,
a participating investor may claim an amount equal to 20 percent of the participating
investor's investment of designated capital.
new text end

new text begin (b) The credit for any taxable year must not exceed the liability for tax. If the
amount of the credit determined under this section for any taxable year exceeds the
liability for tax, the excess is an investment tax credit carryover to each of the succeeding
taxable years and must be carried forward to each succeeding taxable year until the entire
carryforward has been credited against the participating investor's liability for tax under
this chapter. Credits may be used in connection with both estimated and return payments
of a participating investor's state premium tax liability.
new text end

new text begin (c) A participating investor claiming a credit under this section is not required to pay
any additional retaliatory tax levied by Minnesota as a result of claiming the credit.
new text end

new text begin (d) A participating investor is not required to reduce the amount of tax pursuant to
the state premium tax liability included by the participating investor in connection with
ratemaking for any insurance contract written in this state because of a reduction in the
participating investor's tax liability based on the tax credit allowed under this section.
new text end

new text begin (e) Decertification of a Minnesota business investment company under section
116J.665 may result in the disallowance and the recapture of the credit allowed under this
section. The amount disallowed and recaptured must be assessed as follows:
new text end

new text begin (1) decertification of a Minnesota business investment company within two years
of the allocation date of tax credits and prior to meeting the requirements of section
116J.665, subdivision 5, paragraph (a), clause (1), shall result in the disallowance of all
of the credits allowed under this section;
new text end

new text begin (2) decertification of a Minnesota business investment company after two years
of the allocation date of tax credits, but prior to meeting the requirements of section
116J.665, subdivision 5, paragraph (a), clause (1), results in the disallowance of one-half
of all the credits allowed under this section; and
new text end

new text begin (3) decertification of Minnesota business investment company that has already met
the requirements of section 116J.665, subdivision 5, paragraph (a), clause (1), does not
cause the disallowance of any credits allowed under this section nor the recapture of any
portion of the credits that was previously taken.
new text end

new text begin Subd. 2. new text end

new text begin Transfers. new text end

new text begin A participating investor must not transfer, agree to transfer,
sell, or agree to sell the credit under this section until 180 days from the date on which
the participating investor invested designated capital. After 180 days from the date of
investment, a participating investor, or subsequent transferee, may transfer credits to
another person who is subject to tax and must notify the department in the form prescribed
by the commissioner within 30 days of the transfer. A person must not transfer a credit
more than once in a 12-month period. No person is entitled to a refund for the interest
created under this subdivision. A credit acquired by transfer is subject to the limitations
prescribed in this section. Any transfer or sale of the credits does not affect the time
schedule for claiming the credit. Any tax credits recaptured under this section remain the
liability of the participating investor that actually applied the credit towards its tax liability.
new text end

new text begin Subd. 3. new text end

new text begin Repayment of tax benefits received. new text end

new text begin (a) Decertification of a Minnesota
small business investment company or revocation of credits under section 116J.665,
results in the disallowance to certified investors of any credits for that tax year or future
tax years and the participating investor is required to repay any credits claimed for the
previous year. Repayment must be made within 60 days of the decertification or the
revocation of the certification.
new text end

new text begin (b) The provisions of chapters 270C and 297I relating to audit, assessment, refund,
collection, and appeals are applicable to the credits claimed and repayment required under
this section. The commissioner may impose civil penalties as provided in section 297I.85,
and additional tax and penalties are subject to interest at the rate provided in section
270C.40, from the date payment was due.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2010.
new text end