Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 295-H.F.No. 1088 
           An act relating to economic development; establishing 
          the regional seed capital program; authorizing 
          economic development authorities to provide seed 
          capital to small businesses; amending Minnesota 
          Statutes 1990, section 469.101, by adding a 
          subdivision; proposing coding for new law in Minnesota 
          Statutes, chapter 116O. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  [116O.122] [SEED CAPITAL FUND.] 
    Subdivision 1.  [ESTABLISHMENT.] The corporation shall, in 
consultation with private venture and seed capital companies and 
other public and private organizations as appropriate, implement 
a centrally managed seed capital fund to invest in early stage 
companies and small companies in Minnesota through equity or 
equity-type investments.  The seed capital fund may receive 
contributions from the corporation, as well as from local, 
state, or federal government, private foundations, or other 
sources.  Total investments by the seed capital fund in 
seven-county metropolitan area based companies must not exceed 
20 percent of the total amount invested.  Investments which 
contribute to the 20 percent metropolitan area limitation are 
those which will primarily enhance the operations of a 
metropolitan based facility.  Investments that benefit a Greater 
Minnesota facility of a metropolitan based company are not 
subject to the limitation.  Investments by the seed capital fund 
must be matched by other sources of capital at a ratio to be 
determined by the corporation.  The seed capital fund shall 
identify sources of technical, management, and marketing 
assistance for companies funded by the seed capital program and 
make appropriate referrals.  The seed capital fund shall 
establish a procedure for liquidating private investments. 
    Subd. 2.  [REGIONAL SEED CAPITAL REPORT.] By February 15, 
the board shall submit to the legislature and governor an annual 
report on the activities of the seed capital program. 
    Sec. 2.  Minnesota Statutes 1990, section 469.101, is 
amended by adding a subdivision to read: 
    Subd. 23.  [SUPPLYING SMALL BUSINESS CAPITAL.] 
Notwithstanding any contrary law, the authority may participate 
with public or private corporations or other entities, whose 
purpose is to provide seed or venture capital to small 
businesses that have facilities located or to be located in the 
district.  For that purpose the authority may use not more than 
.... percent of available annual net income or $.... annually, 
whichever is less, to invest in equities or acquire equity-type 
investments.  These investments can be made directly in eligible 
corporations or entities or acquired through participation in a 
public or private seed or venture capital fund.  The 
participation by the authority may not exceed in any year 25 
percent of the total amount of funds provided for venture or 
seed capital purposes by all of the participants.  The 
corporation, entity, or fund shall report in writing each six 
months to the commissioners of the authority all investments and 
other action taken by it since the last report.  Funds 
contributed to the corporation or entity must be invested pro 
rata with each contributor of capital taking proportional risks 
on each investment.  As used in this subdivision, the term 
"small business" has the meaning given it in section 645.445, 
subdivision 2. 
    Presented to the governor May 30, 1991 
    Signed by the governor June 3, 1991, 4:25 p.m.