Bill Text: MN SF300 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Minnesota science and technology program establishment
Sponsorship: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2011-03-16 - Comm report: To pass and re-referred to Taxes [SF300 Detail]
Download: Minnesota-2011-SF300-Introduced.html
1.2relating to economic development; establishing a Minnesota science and
1.3technology program; requiring reports;proposing coding for new law in
1.4Minnesota Statutes, chapter 116W.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [116W.25] CITATION.
1.7Sections 116W.26 to 116W.34 may be cited as the "Minnesota science and
1.8technology program."
1.9 Sec. 2. [116W.26] DEFINITIONS.
1.10 Subdivision 1. Applicability. For the purposes of sections 116W.26 to 116W.34,
1.11the terms in this section have the meanings given them.
1.12 Subd. 2. Authority. "Authority" means the Minnesota Science and Technology
1.13Authority established under this chapter.
1.14 Subd. 3. Base-year taxation. "Base-year taxation" means the 2010 calendar
1.15year state withholding taxes of science and technology employees working for primary
1.16science and technology companies currently located in or operating in this state. Each
1.17year the commissioner of management and budget shall adjust the base-year taxation by
1.18the annual percentage change over the prior year in the consumer price index for all
1.19urban consumers for the St. Paul-Minneapolis metropolitan area prepared by the United
1.20States Department of Labor.
1.21 Subd. 4. College or university. "College or university" means an institution of
1.22postsecondary education, public or private, that grants undergraduate or postgraduate
2.1academic degrees, conducts significant research or development activities in the areas of
2.2science and technology.
2.3 Subd. 5. Commercialization. "Commercialization" means any of the full spectrum
2.4of activities required for a new technology, product, or process to be developed from
2.5its basic research of conceptual stage through applied research or development to the
2.6marketplace including, without limitation, the steps leading up to and including licensure,
2.7sales, and services.
2.8 Subd. 6. Commercialized research project. "Commercialized research project"
2.9means research conducted within a college or university or nonprofit research institution
2.10or by a qualified science and technology company that has shown advanced commercial
2.11potential through license agreements, patents, or other forms of invention disclosure, and
2.12by which a qualified science and technology company has been or is being currently
2.13formed.
2.14 Subd. 7. Fund. "Fund" means the Minnesota science and technology fund.
2.15 Subd. 8. Nonprofit research institution. "Nonprofit research institution" means an
2.16entity with its principle place of business in Minnesota, that qualifies under section 501(c)
2.17of the Internal Revenue Code, and that conducts significant research or development
2.18activities in this state in the areas of science and technology.
2.19 Subd. 9. Primary science and technology company. "Primary science and
2.20technology company" means a corporation, limited liability company, S corporation,
2.21partnership, limited liability partnership, or sole proprietorship operating within a set of
2.22industries that are the primary developers of new scientific, engineered, or technological
2.23products and services and that operate under the following North American Industry
2.24Classification System codes or industry groups, or any successor code sections covering
2.25these areas of research, development, and commercial activities: 3241, 3251, 3252, 3253,
2.263254, 3255, 3259, 3331, 3332, 3333, 3336, 3339, 3341, 3342, 3343, 3344, 3345, 3353,
2.273359, 3364, 3369, 3391, 5112, 5172, 5182, 5415, 5417, 541330, 541380, 541620, 541690.
2.28 Subd. 10. Program. "Program" means the Minnesota science and technology
2.29program.
2.30 Subd. 11. Qualified science and technology company. "Qualified science and
2.31technology company" means a corporation, limited liability company, S corporation,
2.32partnership, limited liability partnership, or sole proprietorship with fewer than 100
2.33employees that is engaged in research, development, or production of science or
2.34technology in this state including, without limitation, research, development, or production
2.35directed toward developing or providing science and technology products, processes, or
2.36services for specific commercial or public purposes.
3.1 Subd. 12. Withholding taxes. "Withholding taxes" means the aggregate of all
3.2amounts withheld from amounts paid to primary science and technology company
3.3employees during a calendar year for the payment of state income taxes under chapter 290.
3.4 Sec. 3. [116W.27] MINNESOTA SCIENCE AND TECHNOLOGY FUND.
3.5(a) A Minnesota science and technology fund is created in the state treasury. The
3.6fund is a direct-appropriated special revenue fund. Money of the authority must be
3.7paid to the commissioner of management and budget as agent of the authority and the
3.8commissioner shall not commingle the money with other money. The money in the fund
3.9must be paid out only on warrants drawn by the commissioner of management and budget
3.10on requisition of the executive director of the authority or designee.
3.11(b) By September 1, 2011, the commissioner of revenue and the authority shall
3.12establish the base-year taxation for all primary science and technology companies. Within
3.13120 days after the end of each year beginning with the year ending December 31, 2011,
3.14and for each subsequent year prior to the end of the last funding year, the commissioner
3.15of revenue and the authority shall determine the increase of aggregate withholding taxes
3.16for the year over the base year taxation.
3.17(c) Notwithstanding the provisions of section 290.62, beginning with the taxable
3.18year ending December 31, 2011, the commissioner of management and budget shall
3.19pay annually 85 percent of the increase in aggregate withholding taxes that are over the
3.20base-year taxation amount, as certified by the commissioner of revenue, to the fund. The
3.21annual amount of withholding paid into the fund must not exceed $25,000,000. The
3.22commissioner of management and budget may make estimated payments to the fund more
3.23frequently based on estimates provided by the commissioner of revenue but the payments
3.24must be reconciled annually.
3.25 Sec. 4. [116W.28] MINNESOTA SCIENCE AND TECHNOLOGY FUND;
3.26AUTHORIZED USES.
3.27The Minnesota science and technology fund may be used for the following to:
3.28(1) establish the commercialized research program authorized under section
3.29116W.29;
3.30(2) establish the federal research and development support program under section
3.31116W.30;
3.32(3) establish the industry technology and competitiveness program under section
3.33116W.31; and
4.1(4) carry out the powers of the authority authorized under sections 116W.04 and
4.2116W.32 that are in support of the programs in clauses (1) to (3).
4.3 Sec. 5. [116W.29] COMMERCIALIZED RESEARCH PROGRAM.
4.4(a) The authority may establish a commercialized research program. The purpose of
4.5the program is to accelerate the commercialization of science and technology products,
4.6processes, or services from colleges or universities, nonprofit research institutions or
4.7qualified science and technology companies that lead to an increase in science and
4.8technology businesses and jobs. The program shall:
4.9(1) provide science and technology gap funding of up to $250,000 per science and
4.10technology research project to assist in the commercialization and transfer of science and
4.11technology research projects from a college or university or nonprofit research institution
4.12to a qualified science and technology company; and
4.13(2) provide funding of up to $250,000 for early stage development for qualified
4.14science and technology companies to conduct commercialized research projects.
4.15(b) All activities under the commercialized research program must require:
4.16(1) written criteria set by the authority for the application, award, and use of the
4.17funds;
4.18(2) matching funds by the participating qualified science and technology company,
4.19college or university, or nonprofit research institution;
4.20(3) no more than 15 percent of the funds awarded by the authority may be used
4.21for overhead costs; and
4.22(4) a report by the participating qualified science and technology company, college
4.23or university, or nonprofit research institution that provides documentation of the use of
4.24funds and outcomes of the award. The report must be submitted to the authority within
4.25one calendar year of the date of the award.
4.26 Sec. 6. [116W.30] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT
4.27PROGRAM.
4.28The authority may establish a federal research and development support program.
4.29The purpose of the program is to increase and coordinate efforts to procure federal funding
4.30for research projects of primary benefit to qualified science and technology companies,
4.31colleges or universities, and nonprofit research institutions. The program shall:
4.32(1) develop and execute a strategy to identify specific federal agencies and programs
4.33that support the growth of science and technology industries in this state; and
4.34(2) provide grants to qualified science and technology companies:
5.1(i) to assist in the development of federal Small Business Innovation (SBIR) or
5.2Small Business Technology Transfer (STTR) proposals; and
5.3(ii) to match funds received through SBIR or STTR awards. No more than
5.4$1,500,000 may be awarded in a year for matching grants under this clause.
5.5 Sec. 7. [116W.31] INDUSTRY INNOVATION AND COMPETITIVENESS
5.6PROGRAM.
5.7(a) The authority may establish an industry technology and competitiveness program.
5.8The purpose of the program is to advance the technological capacity and competitiveness
5.9of existing and emerging science and technology industries. The program shall:
5.10(1) provide matching funds to programs and organizations that assist entrepreneurs
5.11in starting and growing qualified science and technology companies including, but not
5.12limited to, matching funds for mentoring programs, consulting and technical services,
5.13and related activities;
5.14(2) fund initiatives that retain engineering, science, technology, and mathematical
5.15occupations in the state including, but not limited to, internships, mentoring, and support
5.16of industry and professional organizations; and
5.17(3) fund initiatives that support the growth of targeted industry clusters and the
5.18competitiveness of existing qualified science and technology companies in developing
5.19and marketing new products and services.
5.20(b) All activities under the industry innovation and competitiveness program shall
5.21require:
5.22(i) written criteria set by the authority for the application, award, and use of the funds;
5.23(ii) matching funds by the participating qualified science and technology company,
5.24college or university, or nonprofit research institution; and
5.25(iii) a report by the participating qualified science and technology company, college
5.26or university, or nonprofit research institution providing documentation on the use of the
5.27funds and outcomes of the award. The report must be submitted to the authority within
5.28one calendar year from the date of the award.
5.29 Sec. 8. [116W.32] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY;
5.30POWERS UNDER FUND.
5.31 Subdivision 1. General powers. The authority shall have all of the powers
5.32necessary to carry out the purposes and provisions of sections 116W.26 to 116W.34,
5.33including, but not limited to, those provided under section 116W.04 and the following:
6.1(1) The authority may make awards in the forms of grants or loans, and charge and
6.2receive a reasonable interest for the loans, or take an equity position in form of stock, a
6.3convertible note, or other securities in consideration of an award. Interests, revenues, or
6.4other proceeds received as a result of a transaction authorized by use of this fund shall be
6.5deposited to the corpus of the fund and used in the same manner as the corpus of the fund.
6.6(2) In awarding money from the fund, priority shall be given to proposals from
6.7qualified science and technology companies that have demonstrable economic benefit to
6.8the state in terms of the formation of a new private sector business entity, the creation of
6.9jobs, or the attraction of federal and private funding.
6.10(3) In awarding money from the fund, priority shall be given to proposals from
6.11colleges or universities and nonprofit research institutions that:
6.12(i) promote collaboration between any combination of colleges or universities,
6.13nonprofit research institutions, and private industry;
6.14(ii) enhance existing research superiority by attracting new research entities,
6.15research talent, or resources to the state; and
6.16(iii) create new research superiority that attracts significant researchers and resources
6.17from outside the state.
6.18(4) Money within the fund may be used for reasonable administrative expenses by
6.19the authority including staffing and direct operational expenses, and professional fees
6.20for accounting, legal, and other technical services required to carry out the intent of the
6.21program and administration of the fund.
6.22(5) Before making an award, the authority shall enter into a written agreement with
6.23the entity receiving the award that specifies the uses of the award.
6.24(6) If the award recipient has not used the award received for the purposes intended,
6.25as of the date provided in the agreement, the recipient shall repay that amount and any
6.26interest applicable under the agreement to the authority. All repayments must be deposited
6.27to the corpus of the fund.
6.28 Subd. 2. Rules. The authority shall adopt rules to implement the programs
6.29authorized under sections 116W.29 to 116W.31.
6.30 Sec. 9. [116W.33] REPAYMENT.
6.31An entity must repay all or a portion of the amount of any award, grant, loan, or
6.32financial assistance of any type paid by the authority under sections 116W.29 to 116W.32
6.33if the entity relocates outside the state within three years from the date the authority
6.34provided the financial award. If the entity relocates outside of this state within two years
6.35of the financial award, the entity must repay 100 percent of the award. If the entity
7.1relocates after a period of two years but before three years from the date of the financial
7.2award, the entity must repay 75 percent of the financial award.
7.3 Sec. 10. [116W.34] EXPIRATION.
7.4Sections 116W.26 to 116W.33 expire on the expiration date of the authority under
7.5section 116W.03, subdivision 7. Any unused money in the fund shall be deposited in the
7.6general fund.
1.3technology program; requiring reports;proposing coding for new law in
1.4Minnesota Statutes, chapter 116W.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [116W.25] CITATION.
1.7Sections 116W.26 to 116W.34 may be cited as the "Minnesota science and
1.8technology program."
1.9 Sec. 2. [116W.26] DEFINITIONS.
1.10 Subdivision 1. Applicability. For the purposes of sections 116W.26 to 116W.34,
1.11the terms in this section have the meanings given them.
1.12 Subd. 2. Authority. "Authority" means the Minnesota Science and Technology
1.13Authority established under this chapter.
1.14 Subd. 3. Base-year taxation. "Base-year taxation" means the 2010 calendar
1.15year state withholding taxes of science and technology employees working for primary
1.16science and technology companies currently located in or operating in this state. Each
1.17year the commissioner of management and budget shall adjust the base-year taxation by
1.18the annual percentage change over the prior year in the consumer price index for all
1.19urban consumers for the St. Paul-Minneapolis metropolitan area prepared by the United
1.20States Department of Labor.
1.21 Subd. 4. College or university. "College or university" means an institution of
1.22postsecondary education, public or private, that grants undergraduate or postgraduate
2.1academic degrees, conducts significant research or development activities in the areas of
2.2science and technology.
2.3 Subd. 5. Commercialization. "Commercialization" means any of the full spectrum
2.4of activities required for a new technology, product, or process to be developed from
2.5its basic research of conceptual stage through applied research or development to the
2.6marketplace including, without limitation, the steps leading up to and including licensure,
2.7sales, and services.
2.8 Subd. 6. Commercialized research project. "Commercialized research project"
2.9means research conducted within a college or university or nonprofit research institution
2.10or by a qualified science and technology company that has shown advanced commercial
2.11potential through license agreements, patents, or other forms of invention disclosure, and
2.12by which a qualified science and technology company has been or is being currently
2.13formed.
2.14 Subd. 7. Fund. "Fund" means the Minnesota science and technology fund.
2.15 Subd. 8. Nonprofit research institution. "Nonprofit research institution" means an
2.16entity with its principle place of business in Minnesota, that qualifies under section 501(c)
2.17of the Internal Revenue Code, and that conducts significant research or development
2.18activities in this state in the areas of science and technology.
2.19 Subd. 9. Primary science and technology company. "Primary science and
2.20technology company" means a corporation, limited liability company, S corporation,
2.21partnership, limited liability partnership, or sole proprietorship operating within a set of
2.22industries that are the primary developers of new scientific, engineered, or technological
2.23products and services and that operate under the following North American Industry
2.24Classification System codes or industry groups, or any successor code sections covering
2.25these areas of research, development, and commercial activities: 3241, 3251, 3252, 3253,
2.263254, 3255, 3259, 3331, 3332, 3333, 3336, 3339, 3341, 3342, 3343, 3344, 3345, 3353,
2.273359, 3364, 3369, 3391, 5112, 5172, 5182, 5415, 5417, 541330, 541380, 541620, 541690.
2.28 Subd. 10. Program. "Program" means the Minnesota science and technology
2.29program.
2.30 Subd. 11. Qualified science and technology company. "Qualified science and
2.31technology company" means a corporation, limited liability company, S corporation,
2.32partnership, limited liability partnership, or sole proprietorship with fewer than 100
2.33employees that is engaged in research, development, or production of science or
2.34technology in this state including, without limitation, research, development, or production
2.35directed toward developing or providing science and technology products, processes, or
2.36services for specific commercial or public purposes.
3.1 Subd. 12. Withholding taxes. "Withholding taxes" means the aggregate of all
3.2amounts withheld from amounts paid to primary science and technology company
3.3employees during a calendar year for the payment of state income taxes under chapter 290.
3.4 Sec. 3. [116W.27] MINNESOTA SCIENCE AND TECHNOLOGY FUND.
3.5(a) A Minnesota science and technology fund is created in the state treasury. The
3.6fund is a direct-appropriated special revenue fund. Money of the authority must be
3.7paid to the commissioner of management and budget as agent of the authority and the
3.8commissioner shall not commingle the money with other money. The money in the fund
3.9must be paid out only on warrants drawn by the commissioner of management and budget
3.10on requisition of the executive director of the authority or designee.
3.11(b) By September 1, 2011, the commissioner of revenue and the authority shall
3.12establish the base-year taxation for all primary science and technology companies. Within
3.13120 days after the end of each year beginning with the year ending December 31, 2011,
3.14and for each subsequent year prior to the end of the last funding year, the commissioner
3.15of revenue and the authority shall determine the increase of aggregate withholding taxes
3.16for the year over the base year taxation.
3.17(c) Notwithstanding the provisions of section 290.62, beginning with the taxable
3.18year ending December 31, 2011, the commissioner of management and budget shall
3.19pay annually 85 percent of the increase in aggregate withholding taxes that are over the
3.20base-year taxation amount, as certified by the commissioner of revenue, to the fund. The
3.21annual amount of withholding paid into the fund must not exceed $25,000,000. The
3.22commissioner of management and budget may make estimated payments to the fund more
3.23frequently based on estimates provided by the commissioner of revenue but the payments
3.24must be reconciled annually.
3.25 Sec. 4. [116W.28] MINNESOTA SCIENCE AND TECHNOLOGY FUND;
3.26AUTHORIZED USES.
3.27The Minnesota science and technology fund may be used for the following to:
3.28(1) establish the commercialized research program authorized under section
3.29116W.29;
3.30(2) establish the federal research and development support program under section
3.31116W.30;
3.32(3) establish the industry technology and competitiveness program under section
3.33116W.31; and
4.1(4) carry out the powers of the authority authorized under sections 116W.04 and
4.2116W.32 that are in support of the programs in clauses (1) to (3).
4.3 Sec. 5. [116W.29] COMMERCIALIZED RESEARCH PROGRAM.
4.4(a) The authority may establish a commercialized research program. The purpose of
4.5the program is to accelerate the commercialization of science and technology products,
4.6processes, or services from colleges or universities, nonprofit research institutions or
4.7qualified science and technology companies that lead to an increase in science and
4.8technology businesses and jobs. The program shall:
4.9(1) provide science and technology gap funding of up to $250,000 per science and
4.10technology research project to assist in the commercialization and transfer of science and
4.11technology research projects from a college or university or nonprofit research institution
4.12to a qualified science and technology company; and
4.13(2) provide funding of up to $250,000 for early stage development for qualified
4.14science and technology companies to conduct commercialized research projects.
4.15(b) All activities under the commercialized research program must require:
4.16(1) written criteria set by the authority for the application, award, and use of the
4.17funds;
4.18(2) matching funds by the participating qualified science and technology company,
4.19college or university, or nonprofit research institution;
4.20(3) no more than 15 percent of the funds awarded by the authority may be used
4.21for overhead costs; and
4.22(4) a report by the participating qualified science and technology company, college
4.23or university, or nonprofit research institution that provides documentation of the use of
4.24funds and outcomes of the award. The report must be submitted to the authority within
4.25one calendar year of the date of the award.
4.26 Sec. 6. [116W.30] FEDERAL RESEARCH AND DEVELOPMENT SUPPORT
4.27PROGRAM.
4.28The authority may establish a federal research and development support program.
4.29The purpose of the program is to increase and coordinate efforts to procure federal funding
4.30for research projects of primary benefit to qualified science and technology companies,
4.31colleges or universities, and nonprofit research institutions. The program shall:
4.32(1) develop and execute a strategy to identify specific federal agencies and programs
4.33that support the growth of science and technology industries in this state; and
4.34(2) provide grants to qualified science and technology companies:
5.1(i) to assist in the development of federal Small Business Innovation (SBIR) or
5.2Small Business Technology Transfer (STTR) proposals; and
5.3(ii) to match funds received through SBIR or STTR awards. No more than
5.4$1,500,000 may be awarded in a year for matching grants under this clause.
5.5 Sec. 7. [116W.31] INDUSTRY INNOVATION AND COMPETITIVENESS
5.6PROGRAM.
5.7(a) The authority may establish an industry technology and competitiveness program.
5.8The purpose of the program is to advance the technological capacity and competitiveness
5.9of existing and emerging science and technology industries. The program shall:
5.10(1) provide matching funds to programs and organizations that assist entrepreneurs
5.11in starting and growing qualified science and technology companies including, but not
5.12limited to, matching funds for mentoring programs, consulting and technical services,
5.13and related activities;
5.14(2) fund initiatives that retain engineering, science, technology, and mathematical
5.15occupations in the state including, but not limited to, internships, mentoring, and support
5.16of industry and professional organizations; and
5.17(3) fund initiatives that support the growth of targeted industry clusters and the
5.18competitiveness of existing qualified science and technology companies in developing
5.19and marketing new products and services.
5.20(b) All activities under the industry innovation and competitiveness program shall
5.21require:
5.22(i) written criteria set by the authority for the application, award, and use of the funds;
5.23(ii) matching funds by the participating qualified science and technology company,
5.24college or university, or nonprofit research institution; and
5.25(iii) a report by the participating qualified science and technology company, college
5.26or university, or nonprofit research institution providing documentation on the use of the
5.27funds and outcomes of the award. The report must be submitted to the authority within
5.28one calendar year from the date of the award.
5.29 Sec. 8. [116W.32] MINNESOTA SCIENCE AND TECHNOLOGY AUTHORITY;
5.30POWERS UNDER FUND.
5.31 Subdivision 1. General powers. The authority shall have all of the powers
5.32necessary to carry out the purposes and provisions of sections 116W.26 to 116W.34,
5.33including, but not limited to, those provided under section 116W.04 and the following:
6.1(1) The authority may make awards in the forms of grants or loans, and charge and
6.2receive a reasonable interest for the loans, or take an equity position in form of stock, a
6.3convertible note, or other securities in consideration of an award. Interests, revenues, or
6.4other proceeds received as a result of a transaction authorized by use of this fund shall be
6.5deposited to the corpus of the fund and used in the same manner as the corpus of the fund.
6.6(2) In awarding money from the fund, priority shall be given to proposals from
6.7qualified science and technology companies that have demonstrable economic benefit to
6.8the state in terms of the formation of a new private sector business entity, the creation of
6.9jobs, or the attraction of federal and private funding.
6.10(3) In awarding money from the fund, priority shall be given to proposals from
6.11colleges or universities and nonprofit research institutions that:
6.12(i) promote collaboration between any combination of colleges or universities,
6.13nonprofit research institutions, and private industry;
6.14(ii) enhance existing research superiority by attracting new research entities,
6.15research talent, or resources to the state; and
6.16(iii) create new research superiority that attracts significant researchers and resources
6.17from outside the state.
6.18(4) Money within the fund may be used for reasonable administrative expenses by
6.19the authority including staffing and direct operational expenses, and professional fees
6.20for accounting, legal, and other technical services required to carry out the intent of the
6.21program and administration of the fund.
6.22(5) Before making an award, the authority shall enter into a written agreement with
6.23the entity receiving the award that specifies the uses of the award.
6.24(6) If the award recipient has not used the award received for the purposes intended,
6.25as of the date provided in the agreement, the recipient shall repay that amount and any
6.26interest applicable under the agreement to the authority. All repayments must be deposited
6.27to the corpus of the fund.
6.28 Subd. 2. Rules. The authority shall adopt rules to implement the programs
6.29authorized under sections 116W.29 to 116W.31.
6.30 Sec. 9. [116W.33] REPAYMENT.
6.31An entity must repay all or a portion of the amount of any award, grant, loan, or
6.32financial assistance of any type paid by the authority under sections 116W.29 to 116W.32
6.33if the entity relocates outside the state within three years from the date the authority
6.34provided the financial award. If the entity relocates outside of this state within two years
6.35of the financial award, the entity must repay 100 percent of the award. If the entity
7.1relocates after a period of two years but before three years from the date of the financial
7.2award, the entity must repay 75 percent of the financial award.
7.3 Sec. 10. [116W.34] EXPIRATION.
7.4Sections 116W.26 to 116W.33 expire on the expiration date of the authority under
7.5section 116W.03, subdivision 7. Any unused money in the fund shall be deposited in the
7.6general fund.
