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'Angel Fund' tax breaks debated in House committee

Dave Thompson
/
Prairie Public

A Legislative Committee is considering a bill to phase out the state tax credit for so-called “angel funds” – and rolling them into the seed capital fund.

“Angel funds” are usually made up of a group of investors that put their money toward start-up businesses. The credit was created in 2007. And there is no requirement that angel investors help North Dakota projects. The seed capital fund was originally designed to give tax breaks to single investors. And there are requirements for where they can make their investments.

Rep. Jason Dockter (R-Bismarck) chaired an interim committee that looked at the issue.

"Once the 'angel fund' was enacted in 2007, seed capital went to the wayside," Dockter told the House Finance and Tax Committee. "Angel funds have a lot less restrictions, as well as transparency and audits. As a committee, we took a hard look at that."

Dockter said some of the angel funds invested in real estate outside North Dakota.

Tom Kenville of Grand Forks manages angel funds. He told the Committee he would rather see the angel fund law tweaked, and not repealed.

"We've started kind of a really good thing here," Kenville said. "I think we need maximum programs everywhere."

Kenville said he can go into downtown Minneapolis and raise quite a bit of money -- pretty fast.

"It's different here in North Dakota," Kenville said. "People invest in their own businesses and farms. We don't have a big network. This helps get players to the table, in a very high-risk environment."

The Committee did not immediately act on the bill.

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