1.1    .................... moves to amend H. F. No. ..... as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 290.06, is amended by adding a
1.4subdivision to read:
1.5    Subd. 34. Regional investment credit. (a) A credit is allowed against the tax
1.6imposed by this chapter for investment in a qualifying regional investment fund. The
1.7credit equals 25 percent of the taxpayer's investment made in the fund for the taxable
1.8year, but not to exceed the least of:
1.9    (1) the liability for tax under this chapter, including the applicable alternative
1.10minimum tax, but excluding the minimum fee under section 290.0922; and
1.11    (2) the amount of the certificate under paragraph (c) provided to the taxpayer by
1.12the fund.
1.13    (b) For purposes of this subdivision, the following requirements apply.
1.14    (1) A regional investment fund means a pooled investment fund that invests in
1.15qualifying small businesses located in the region of the state that is the focus of the fund
1.16and is organized as a limited liability company or other pass-through entity. A regional
1.17investment fund also means a fund that has no fewer than five separate investors and no
1.18investor owns more than 25 percent of the outstanding ownership interests in the fund. For
1.19purposes of determining the number of investors and the ownership interest of an investor
1.20under this clause, the ownership interests of an investor include those of:
1.21    (i) the investor's spouse, a child, and sibling; and
1.22    (ii) a corporation, partnership, or trust in which the investor has a controlling equity
1.23interest or in which the investor exercises management control.
1.24    A minimum of two-thirds of the governing body of the fund must be residents of
1.25the region. Investments in the fund may consist of equity investments or notes that pay
1.26interest or other fixed amounts, or any combination of both, as the fund's governing body
2.1determines appropriate. The fund must allocate at least 70 percent of the funds it invests
2.2to qualified small businesses within the region.
2.3    (2) To be a qualifying small business, a business must satisfy all of the following
2.5    (i) the business should strive to pay wages and benefits, measured on a full-time
2.6equivalent basis, to 75 percent or more of its employees equal to 175 percent of the federal
2.7poverty level for a family of four;
2.8    (ii) the business is engaged in, or is committed to engage in, manufacturing,
2.9agriculture, processing or assembling products, conducting research and development, or
2.10developing a new product or business process;
2.11    (iii) the business is not engaged in real estate development, insurance, banking,
2.12lending, lobbying, political consulting, or professional services provided by attorneys,
2.13accountants, or business consultants;
2.14    (iv) the business has its headquarters in Minnesota;
2.15    (v) at least 51 percent of the business's employees are employed in Minnesota;
2.16    (vi) the business has less than 50 employees;
2.17    (vii) the business has not received more than $1,000,000 in investments that have
2.18qualified for and received tax credits under this subdivision; and
2.19    (viii) the business is not part of a unitary business that employs more than 50
2.21    (c) Regional investment funds may apply to the commissioner of employment
2.22and economic development for certification as a qualified regional investment fund.
2.23The application must be in the form and made under the procedures specified by
2.24the commissioner of employment and economic development. The commissioner
2.25of employment and economic development may certify up to 15 funds and provide
2.26certificates entitling investors in the fund to credits under this subdivision of up to
2.27$600,000 for each fund. Of the 15 funds, the commissioner may designate no more than
2.28three funds that serve more than 15 Minnesota counties. In awarding certificates under
2.29this paragraph, the commissioner of employment and economic development shall seek to
2.30certify funds that are broadly dispersed across the entire state. No more than six of the
2.31certificates may be issued to funds that permit investments in businesses located in the
2.32metropolitan area, as defined in section 473.121, subdivision 2. The commissioner of
2.33employment and economic development may not issue a total amount of certificates for all
2.34funds of more than $6,000,000.
2.35    (d) The commissioner of employment and economic development shall enter an
2.36agreement with each fund awarded credit certificates under paragraph (c). This agreement
3.1must include the fund's agreement to comply with the requirements of this subdivision, as
3.2well as the specific manner in which the fund agrees to satisfy the requirement to allocate
3.3at least 70 percent of its investments to qualified small businesses within the region.
3.4The commissioner of employment and economic development shall define "region" for
3.5purposes of this section.
3.6    (e) The taxpayer must claim the credit in the same tax year in which the investment
3.7to the fund is made. The credit is allowed only for investments made to a fund that are
3.8made after the fund has been certified by the commissioner of employment and economic
3.9development under paragraph (c).
3.10    (f) Each fund must provide each investor a statement indicating the investor's share
3.11of the credit amount certified to the fund under paragraph (c) based on the order in which
3.12that investor's investment is made to the fund.
3.13    (g) If the amount of the credit under this subdivision for any taxable year exceeds
3.14the limitations under paragraph (a), clause (1), the excess is a credit carryover to each of
3.15the 15 succeeding taxable years. The entire amount of the excess unused credit for the
3.16taxable year must be carried first to the earliest of the taxable years to which the credit
3.17may be carried. The amount of the unused credit that may be added under this paragraph
3.18may not exceed the taxpayer's liability for tax less the credit for the taxable year.
3.19EFFECTIVE DATE.This section is effective July 1, 2007, for taxable years
3.20beginning after December 31, 2006, and only applies to investments made after the fund
3.21has been certified by the commissioner of employment and economic development."