October 7, 2011
Dear Fellow Nebraskans:
Today, I am providing you an update on an exciting economic initiative whose purpose is to grow and attract new, technology-focused companies. The Talent and Innovation Initiative is designed to advance business innovation and workforce recruitment efforts in Nebraska and to enhance the level of business specialization and attract new, advanced companies to Nebraska. With this initiative, we can help the private sector grow and create new job opportunities, particularly in high-tech, research-driven fields.
Nebraska has consistently ranked low in the availability of capital resources for small businesses and early stage startups. To ease that burden, I worked with the Legislature to pass the Angel Investment Tax Credit program. The motivation for this initiative is to help advance the level of business specialization among existing companies and to attract new, advanced companies to our state. It will provide new tools for collaboration between business and education which is part of growing our innovation economy. This program is targeted at Nebraska investors that are willing to place their confidence and financial support behind early-stage, high-tech start-up companies.
Investors can earn 35% to 40% of refundable state income tax credits when they make a single investment of at least $25,000 in a high tech Nebraska startup company. Three or more investors can combine resources to create an angel fund. The qualified fund then must invest at least $50,000 to earn tax credits for the investors.
Eligible businesses must be headquartered in Nebraska, with fewer than 25 employees at the time an investment is made in their operation. Of those employees on the payroll, 51% must be employed in Nebraska and at least 51% of the total payroll must be paid or incurred in Nebraska. The tax credits went into effect on September 1st.
Some of Nebraska's fastest growing industries are information technology, insurance and financial services, advanced manufacturing and transportation logistics. Additionally, there are a wide variety of fields including aerospace, agriculture processing, renewable energy, energy efficiency and conservation, environmental engineering, food technology, cellulosic ethanol, information technology, materials science technology, nanotechnology, telecommunications, bio-solutions, medical device products, pharmaceuticals, diagnostics, biology, chemistry, and veterinary science that are qualified high-technology fields.
As of today, DED has allocated $528,000 in credits. Thirty four investors have filed applications for allocations of credits totaling $1,191,910, representing $2,979,775 investment in 10 Nebraska businesses.
We are focused on creating higher paying jobs and developing a highly educated workforce. We want our graduates and young professionals to be ready for high-skill jobs with dynamic companies doing business in Nebraska which will enhance Nebraska's momentum for continued growth.
That is one of the reasons why Nebraska is doing better than the rest of the country. We have the second lowest unemployment at 4.2%. We want to continue recruiting and developing business opportunities for Nebraskans.