1.1 .................... moves to amend H. F. No. 3149, the delete everything amendment
1.2(A08-1657), as follows:
1.3Page 26, after line 10, insert:
1.4 "Sec. 7. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
1.5to read:
1.6 Subd. 35. Investment tax credit. (a) A credit is allowed against the tax imposed
1.7by this chapter for a qualified taxpayer's investment in a qualified new business venture.
1.8The credit equals 25 percent of the taxpayer's investment made in the business, but may
1.9not exceed the least of:
1.10 (1) the liability for tax under this chapter, including the alternative minimum taxes in
1.11sections 290.091 and 290.0921;
1.12 (2) $25,000 for an individual not part of a partnership; or
1.13 (3) $300,000 for a pass-through entity or C corporation.
1.14 (b) For purposes of this subdivision, "qualified taxpayer" means:
1.15 (1) an accredited investor within the meaning of Regulation D of the Securities and
1.16Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
1.17part of a pass-through entity or not; and
1.18 (2) an accredited investor who does not own, control, or hold power to vote 20
1.19percent or more of the outstanding securities of the qualified business venture in which the
1.20eligible investment is proposed.
1.21 (c) For purposes of this paragraph, "commissioner" means the commissioner
1.22of employment and economic development. Qualified taxpayers must apply to the
1.23commissioner for certification. The application must be in the form and made under the
1.24procedures specified by the commissioner. The commissioner may provide certificates
1.25entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
1.26of credits for which the commissioner may issue certificates in each taxable year is
1.27$2,000,000 for qualified business ventures in a qualified high technology field, as defined
2.1in paragraph (g), $2,000,000 for qualified business ventures in biotechnology and medical
2.2devices, as defined in paragraph (h), and $2,000,000 for qualified business ventures in
2.3qualified green manufacturing, as defined in paragraph (i). In awarding certificates under
2.4this paragraph, the commissioner must award them to qualified taxpayers in the order in
2.5which the applications are received in each of the categories.
2.6 (d) Each pass-through entity must provide each investor a statement indicating the
2.7investor's share of the credit amount certified to the pass-through entity under paragraph
2.8(c) based on its share of the pass-through entity's assets. The credit shall not exceed
2.9$25,000 for each individual part of a pass-through entity.
2.10 (e) If the amount of the credit under this subdivision in any taxable year exceeds the
2.11limitation under paragraph (a), clause (1), the excess is a credit carryover to each of the ten
2.12succeeding years but may not exceed $25,000 for an individual not part of a partnership
2.13and $300,000 for a pass-through entity or C corporation. The entire amount of the excess
2.14unused credit must be carried first to the earliest of the taxable years to which the credit
2.15may be carried, and then to each successive year to which the credit may be carried. The
2.16amount of the unused credit that may be added under this paragraph may not exceed the
2.17taxpayer's liability for tax less the credit for the taxable year.
2.18 (f) Unless otherwise provided under the rules of the Department of Employment and
2.19Economic Development, a business is a qualified business venture for purposes of this
2.20subdivision only if the business satisfies all of the following conditions:
2.21 (1) the business has its headquarters in Minnesota;
2.22 (2) at least 51 percent of the business's employees are employed in Minnesota;
2.23 (3) the business is engaged in, or is committed to engage in:
2.24 (i) using advanced technology to add value to a product, process, or service in a
2.25qualified high technology field or qualified biotechnology or medical device field;
2.26 (ii) conducting research in and development of a product, process, or service in a
2.27qualified high technology field or qualified biotechnology or medical device field; or
2.28 (iii) developing a new product, process, or service in a qualified high technology
2.29field or qualified biotechnology or medical device field;
2.30 (4) the business is not engaged in real estate development, insurance, banking,
2.31lending, lobbying, political consulting, information technology consulting, wholesale or
2.32retail trade, leisure, hospitality, transportation, construction, ethanol production from
2.33corn, or professional services provided by attorneys, accountants, business consultants,
2.34physicians, or health care consultants;
2.35 (5) the business has fewer than 25 employees;
2.36 (6) the business has not been in operation for more than ten consecutive years;
3.1 (7) the business has not received more than $1,000,000 in investments that have
3.2qualified for and received tax credits under this section;
3.3 (8) the business has less than $1,000,000 in annual gross sales receipts;
3.4 (9) the business is not a subsidiary or an affiliate of a business that employs more
3.5than 100 employees or has gross sales receipts for the previous year of more than
3.6$1,000,000, computed by aggregating all of the employees and gross sales receipts of the
3.7business entities affiliated with the business; and
3.8 (10) the business has not received private equity investments of more than
3.9$2,000,000.
3.10 (g) For purposes of this subdivision, "qualified high technology field" includes, but
3.11is not limited to, aerospace, agricultural processing, alternative energy, environmental
3.12engineering, food technology, cellulosic ethanol, information technology, green
3.13manufacturing, materials science technology, nanotechnology, and telecommunications,
3.14but excludes business qualifying under the definitions in paragraphs (h) and (i).
3.15 (h) For purposes of this subdivision, "qualified biotechnology or medical device
3.16field" means the business of manufacturing, processing, assembling, researching or
3.17developing biotechnology or medical device products, including biotechnology and
3.18device products used in agriculture.
3.19 (i) For purposes of this subdivision, "qualified green manufacturing" means a
3.20business whose primary business activity is production of products, processes, methods,
3.21technologies, or services intended to do one or more of the following:
3.22 (1) to increase the use of energy from renewable sources, as defined in section
3.23216B.1691;
3.24 (2) to increase the energy efficiency of the electric utility infrastructure system or to
3.25increase energy conservation related to electricity use, as provided in sections 216B.2401
3.26and 216B.241;
3.27 (3) to reduce greenhouse gas emissions, as defined in section 216H.01, subdivision
3.282, or to mitigate greenhouse gas emissions through, but not limited to, carbon capture,
3.29storage, or sequestration;
3.30 (4) to monitor, protect, restore, and preserve the quality of surface waters; and
3.31 (5) to expand use of biofuels, including expanding the feasibility or reducing the
3.32cost of producing biofuels or the types of equipment, machinery, and vehicles that can use
3.33biofuels.
3.34EFFECTIVE DATE.This section is effective for taxable years beginning after
3.35December 31, 2007.
4.1 Sec. 8. Minnesota Statutes 2006, section 290.068, subdivision 1, is amended to read:
4.2 Subdivision 1.
Credit allowed. A corporation, other than a corporation treated as
4.3an "S" corporation under section
290.9725, is allowed a credit against the portion of the
4.4franchise tax computed under section
290.06, subdivision 1, for the taxable year equal to:
4.5 (a)
5 3 percent of the first $2,000,000 of the excess (if any) of
4.6 (1) the qualified research expenses for the taxable year, over
4.7 (2) the base amount; and
4.8 (b)
2.5 1.5 percent on all of such excess expenses over $2,000,000.
4.9EFFECTIVE DATE.This section is effective for taxable years beginning after
4.10December 31, 2007.
4.11 Sec. 9. Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read:
4.12 Subd. 3.
Limitation; carryover. (a)(1) The credit
, other than the special credit
4.13under subdivision 7, for the taxable year shall not exceed the liability for tax. "Liability for
4.14tax" for purposes of this section means the tax imposed under this chapter for the taxable
4.15year reduced by the sum of the nonrefundable credits allowed under this chapter.
4.16 (2) In the case of a corporation which is a partner in a partnership, the credit
, other
4.17than the special credit under subdivision 7, allowed for the taxable year shall not exceed
4.18the lesser of the amount determined under clause (1) for the taxable year or an amount
4.19(separately computed with respect to the corporation's interest in the trade or business or
4.20entity) equal to the amount of tax attributable to that portion of taxable income which is
4.21allocable or apportionable to the corporation's interest in the trade or business or entity.
4.22 (b) If the amount of the credit determined under this section
, other than the special
4.23credit under subdivision 7, for any taxable year exceeds the limitation under clause (a), the
4.24excess shall be a research credit carryover to each of the 15 succeeding taxable years. The
4.25entire amount of the excess unused credit for the taxable year shall be carried first to the
4.26earliest of the taxable years to which the credit may be carried and then to each successive
4.27year to which the credit may be carried. The amount of the unused credit which may be
4.28added under this clause shall not exceed the taxpayer's liability for tax less the research
4.29credit for the taxable year.
4.30EFFECTIVE DATE.This section is effective for taxable years beginning after
4.31December 31, 2007.
4.32 Sec. 10. Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
4.33to read:
5.1 Subd. 7. Special credit; small businesses. (a) A qualified business is allowed a tax
5.2credit equal to 20 percent of qualified research expenditures incurred for the taxable year
5.3or the amount of tax credit certificates issued under paragraph (e), whichever is less.
5.4 (b) For purposes of this subdivision and subdivision 8, a "qualified business" is a
5.5corporation, individual, or partnership that:
5.6 (1) had no more than 25 full-time equivalent employees in this state during the
5.7preceding taxable year; and
5.8 (2) is engaged in or is committed to engage in a qualified high technology field.
5.9 (c) For purposes of applying the requirement under paragraph (b), clause (1), all of
5.10the employees of the unitary business, as that term is used in section 290.17, subdivision
5.114, must be taken into account and "full-time equivalent" has the meaning given in section
5.12469.318, subdivision 2.
5.13 (d) For purposes of this subdivision, "qualified high technology field" includes but
5.14is not limited to aerospace, agricultural processing, alternative energy, biotechnology,
5.15defense, drug delivery, environmental engineering, food technology, cellulosic ethanol,
5.16information technology, green manufacturing, materials science technology, medical
5.17devices, nanotechnology, pharmaceutical technology, and telecommunications. Unless
5.18otherwise provided under the rules of the Department of Employment and Economic
5.19Development, a business is a qualified business venture for purposes of this subdivision
5.20only if the business satisfies all of the following conditions:
5.21 (1) the business has its headquarters in Minnesota;
5.22 (2) at least 51 percent of the business's employees are employed in Minnesota;
5.23 (3) the business is engaged in, or is committed to engage in:
5.24 (i) using advanced technology to add value to a product, process, or service in a
5.25qualified high technology field;
5.26 (ii) conducting research in and development of a product, process, or service in a
5.27qualified high technology field; or
5.28 (iii) developing a new product, process, or service in a qualified high technology
5.29field;
5.30 (4) the business is not engaged in real estate development, insurance, banking,
5.31lending, lobbying, political consulting, information technology consulting, wholesale or
5.32retail trade, leisure, hospitality, transportation, construction, ethanol production from
5.33corn, or professional services provided by attorneys, accountants, business consultants,
5.34physicians, or health care consultants;
5.35 (5) the business has not been in operation for more than ten consecutive years; and
6.1 (6) the business had less than $1,000,000 in annual gross sales receipts in the
6.2preceding taxable year.
6.3 (e) For purposes of this paragraph, "commissioner" means the commissioner
6.4of employment and economic development. Qualified businesses must apply to the
6.5commissioner for certification. The application must be in the form and made under the
6.6procedures specified by the commissioner. The commissioner may provide certificates
6.7entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
6.8of credits for which the commissioner may issue certificates in each taxable year is
6.9$3,000,000. In awarding certificates under this paragraph, the commissioner must award
6.10them to qualified taxpayers in the order in which the applications are received.
6.11EFFECTIVE DATE.This section is effective for taxable years beginning after
6.12December 31, 2007.
6.13 Sec. 11. Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
6.14to read:
6.15 Subd. 8. Special credit; appropriation. (a) If the amount of the special credit under
6.16subdivision 7 for any taxable year exceeds the liability for tax, the commissioner shall
6.17refund the excess to the taxpayer.
6.18 (b) An amount sufficient to pay the refunds required by this subdivision is annually
6.19appropriated to the commissioner of revenue from the general fund.
6.20EFFECTIVE DATE.This section is effective for taxable years beginning after
6.21December 31, 2007."
6.22Renumber the sections in sequence and correct the internal references
6.23Amend the title accordingly