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S.F. No. 1122 - Small Business Technology Transfer Licensing Agreements (As Proposed to be Amended by A-1)
 
Author: Senator Chris A. Eaton
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: March 13, 2013



 

Section 1, subdivision 1 [Definitions]  Defines the following terms:

“Qualified small business” means a business headquartered in Minnesota that has at least 51 percent of its employees employed in Minnesota and at least 51 percent of its payroll paid or incurred in Minnesota; less than $2 million in annual gross receipts in each of the three previous taxable years; and has not been in operation for more than five years.  The business must not be part of the same unitary group as the corporation licensing its technology to the business.

“Qualified technology” means a proprietary information that is not in the public domain at the time the technology transfer agreement is entered.

“Technology transfer licensing agreement” is an agreement approved by the Commissioner of the Department of Employment and Economic Development (DEED) under subdivision 3.

Subdivision 2 [Royalties exemption] Exempts royalties received by a corporation under a technology transfer licensing agreement between the corporation and a qualified small business.  The exemption period is the earlier of ten years from the effective date of the agreement or when the corporation has received $10 million in royalties under the term of the agreement. 

Subdivision 3 [Technology transfer licensing agreement] Provides for the transfer of a qualified technology owned by a corporation to a qualified small business.  The technology transfer licensing agreement authorizes the exclusive right to use the technology for a specific purpose.  The agreement must take effect on or after January 1, 2013 and must be approved by the Commissioner of DEED.  In approving the agreement, the Commissioner must find that the agreement will enable development and use of a qualified technology that would not otherwise occur, and that the new development and use of the qualified technology can reasonably be expected to create new opportunities for employment in the state. 

Effective beginning tax year 2013.

Section 2 [Subtraction] Provides a subtraction for royalties received or accrued by a corporation pursuant to a technology transfer license agreement, for purposes of calculating Minnesota income. 

Effective beginning tax year 2013.

NBP:dv

 
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