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SF2879 (Legislative Session 94 (2025-2026))

Certain small business investment credit requirements modifications

Related bill: HF2723

AI Generated Summary

Purpose of the Bill

The bill aims to modify the requirements for businesses that are eligible for the small business investment credit in Minnesota. It seeks to extend the credit allocation and make it easier for businesses to qualify for these benefits.

Main Provisions

  • Certification of Qualified Small Businesses: Businesses can apply for certification as a "qualified small business" or "qualified greater Minnesota small business." An application fee is required, and the application process is specified by the commissioner.
  • Application Process: The commissioner must respond to applications within 30 days, either by certifying the business, requesting additional information, or rejecting the application. Fees are refundable if an application is deemed rejected after the timeline lapses.

  • Eligibility Criteria:

    • Headquarters in Minnesota.
    • Majority of employees and payroll must be within the state.
    • Must be involved in innovation primarily through proprietary technology in sectors like high-tech fields, agriculture, and manufacturing.
    • Excludes businesses involved in real estate, insurance, and several other specified industries, unless they meet specific innovation criteria.
    • Must have fewer than 25 employees, pay adequate wages, and not have been operational beyond a specified number of years unless certain conditions apply.
    • Limited previous private equity investments and not publicly traded.

  • Requirements for Greater Minnesota Businesses: Additional criteria for businesses located outside the metropolitan area, similar to the general requirements but focused on operations within greater Minnesota.

Significant Changes to Existing Law

  • Increased Equity Investment Limit: The bill raises the cap on prior private equity investments from $4 million to $15 million for businesses to qualify for certification.
  • Expansion of Eligible Business Sectors: Includes more diverse fields such as renewable energy and biotechnology within the "qualified high-technology field" definition.
  • Extension for Medical and Pharmaceutical Research Businesses: Businesses focusing on medical devices or pharmaceuticals requiring FDA approval can be operational for up to 20 years, compared to 10 years for other businesses.

Relevant Terms

  • Small business investment credit
  • Qualified small business
  • Greater Minnesota business
  • Proprietary technology
  • High technology fields
  • Private equity investments

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionIntroduction and first reading
March 23, 2025SenateFloorActionReferred toTaxes
April 01, 2025SenateFloorActionAuthor added
April 01, 2025SenateFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Certification criteria for businesses regarding payroll and contractual agreements expanded."
      ],
      "removed": [
        "Obsolete clauses regarding application process timeline eliminated."
      ],
      "summary": "This bill modifies requirements for the small business investment credit under section 116J.8737.",
      "modified": [
        "Extended certification period for small businesses by adding new conditions for waiver processes."
      ]
    },
    "citation": "116J.8737"
  },
  {
    "analysis": {
      "added": [
        "Clarification on geographic requirements for small businesses seeking certification."
      ],
      "removed": [
        "None"
      ],
      "summary": "The bill references the definition of the metropolitan area under section 473.121 subdivision 2.",
      "modified": [
        "Further defined areas outside the metropolitan area regarding business qualifications."
      ]
    },
    "citation": "473.121"
  },
  {
    "analysis": {
      "added": [
        "Requirements for counting employees in unitary businesses emphasized."
      ],
      "removed": [
        "None"
      ],
      "summary": "Mentions the inclusion of all members of the unitary business under section 290.17 subdivision 4.",
      "modified": [
        "Clarified criteria for assessing business size and employee count."
      ]
    },
    "citation": "290.17"
  }
]

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