House passes MNvest changes that would align state regulations with federal rules

In response to recent regulatory changes by the federal Security Exchange Commission governing crowdfunding, the House on Thursday passed a bill 129-0 that would clarify state law to better align with the new rules.

Rep. Jenifer Loon

HF444, sponsored by Rep. Jenifer Loon (R-Eden Prairie), would alter how MNvest – the state-authorized way for small businesses to attract investors – operates. The bill would require that MNvest offerings and purchasers are limited to Minnesotans, along with changes to disclosure documents.

The bill now heads to the Senate where Sen. Eric Pratt (R-Prior Lake) is the sponsor.

“This is a great opportunity for small-scale investors to invest locally,” Loon said.

In 2015, the Legislature carved MNvest into law as a way for small businesses to raise capital from investors through crowdfunding. The Commerce Department governs MNvest regulations, which includes exemptions for securities registration.