SF 367

1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing for a regional 
  1.3             investment credit; amending Minnesota Statutes 2002, 
  1.4             section 290.06, by adding a subdivision. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2002, section 290.06, is 
  1.7   amended by adding a subdivision to read: 
  1.8      Subd. 29.  [REGIONAL INVESTMENT CREDIT.] (a) A credit is 
  1.9   allowed against the tax imposed by this chapter for investment 
  1.10  in a qualifying regional angel investment network fund.  The 
  1.11  credit equals 25 percent of the taxpayer's investment made in 
  1.12  the fund for the taxable year, but not to exceed the lesser of: 
  1.13     (1) the liability for tax under this chapter, including the 
  1.14  applicable alternative minimum tax; or 
  1.15     (2) the amount of the certificate under paragraph (c) 
  1.16  provided to the taxpayer by the fund. 
  1.17     (b) For purposes of this subdivision, a regional angel 
  1.18  investment network fund means a pool investment fund that: 
  1.19     (1) is organized as a limited liability company and 
  1.20  consists of members who are accredited investors within the 
  1.21  meaning of Regulation D of the Securities and Exchange 
  1.22  Commission, Code of Federal Regulations, title 17, section 
  1.23  230.501(a); and 
  1.24     (2) primarily makes equity investments in emerging and 
  1.25  expanding small businesses as defined by the Small Business 
  2.1   Administration that are located in local communities in 
  2.2   Minnesota outside of the metropolitan area as defined in section 
  2.3   473.121, subdivision 2, and does not make investments in 
  2.4   residential real estate. 
  2.5      (c) Regional angel investment network funds may apply to 
  2.6   the commissioner of trade and economic development for 
  2.7   certification as a qualifying regional angel investment network 
  2.8   fund.  The application must be in the form and made under 
  2.9   procedures specified by the commissioner of trade and economic 
  2.10  development.  The commissioner of trade and economic development 
  2.11  may certify up to ten qualifying funds and provide certificates 
  2.12  entitling investors in the funds to credits under this 
  2.13  subdivision of up to $250,000 for each fund.  The commissioner 
  2.14  of trade and economic development must not issue a total amount 
  2.15  of certificates for all funds of more than $2,500,000.  In 
  2.16  awarding certificates under this paragraph, the commissioner of 
  2.17  trade and economic development shall generally award them to 
  2.18  qualified applicants in the order in which the applications are 
  2.19  received, but shall also seek to certify funds that are broadly 
  2.20  dispersed across the entire state outside of the metropolitan 
  2.21  area, as defined in section 473.121, subdivision 2. 
  2.22     (d) The commissioner of revenue may require a taxpayer to 
  2.23  provide a copy of the credit certificate under paragraph (c) to 
  2.24  verify the taxpayer's entitlement to a credit under this 
  2.25  subdivision. 
  2.26     (e) If the amount of the credit under this subdivision for 
  2.27  any taxable year exceeds the limitation under paragraph (a), 
  2.28  clause (1), the excess is a credit carryover to each of the 15 
  2.29  succeeding taxable years.  The entire amount of the excess 
  2.30  unused credit for the taxable year must be carried first to the 
  2.31  earliest of the taxable years to which the credit may be carried 
  2.32  and then to each successive year to which the credit may be 
  2.33  carried.  The amount of the unused credit which may be added 
  2.34  under this paragraph may not exceed the taxpayer's liability for 
  2.35  tax less the credit for the taxable year. 
  2.36     [EFFECTIVE DATE.] This section is effective the day 
  3.1   following final enactment and for taxable years beginning after 
  3.2   December 31, 2002.  It applies to investments made after the 
  3.3   fund has been certified by the commissioner of trade and 
  3.4   economic development under this section.