SB 0901 Missouri Certified Capital Company Law
LR Number:S3292.03I Fiscal Note:3292-03
Committee:Financial and Governmental Operations
Last Action:03/06/96 - SCS Voted Do Pass S Financial & Governmental Operations Co
Effective Date:Varies
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Current Bill Summary

SCS/SB 901 - Sections 135.500 through 135.529 of this act are cited as the Missouri Certified Capital Company Law. These sections provide tax credits for Missouri Certified Capital Companies for investments in a "qualified Missouri business", defined in the act as a business headquartered in Missouri, with no more than 300 employees, a majority of whom are employed in Missouri, with gross sales during the last complete fiscal year of $7 million or less.

Any investor making an investment of certified capital in a qualified Missouri business shall receive a vested credit against state premium tax liability for 100% of the investment. No more than 10% of the vested credit may be taken in any taxable year, however, the General Assembly may change the allowable yearly percentage by concurrent resolution any time after January 1, 1999. The amount of the credit may not exceed the amount of the tax liability in any taxable year and unused credits may be carried forward indefinitely.

The certified capital company shall have a funding period of one year from certification by the Department of Economic Development. The Department shall review and approve applicant capital companies and administer the tax credits. The Department shall conduct an annual review of each certified capital company. Violation of the act shall be grounds for decertification meaning tax credits for the current and future tax years will be forfeited. The Department may revoke certification for any misrepresentation by the company to the Department.

The act requires the certified capital company to invest at least 30% in qualified businesses within 3 years and at least 50% within 5 years. Qualified investments must satisfy requirements of Chapter 409, RSMo, regarding the regulation of securities. Tax credits may be sold or transferred pursuant to rules promulgated by the Department. The Department may promulgate rules necessary to carry out the requirements of the act, and such rules shall be subject to review and approval of the Joint Committee on Administrative Rules.

Sections 135.600 through 135.730 of this act are cited as the Missouri BIDCO (business and industrial development company) Act. Only an entity organized pursuant to Missouri law may apply to the Director of the Department of Economic Development for licensure as a BIDCO. The specifics of the application process are detailed. A BIDCO is a legal entity which provides loans guaranteed by the Small Business Administration and which provides financial and management assistance to business firms. A BIDCO may be a subsidiary of a Missouri Certified Capital Company (see Sections 135.500 through 135.539). The Director shall audit the BIDCO and ascertain if the BIDCO is transacting business in a safe and sound manner. The act details the circumstances in which a BIDCO can merge with other entities.

The premium tax credits authorized pursuant to this act shall only reduce state general revenue fund collections and shall not reduce any school district or county foreign insurance tax fund collections.

This act is similar to SB 448 (1995).

This act shall be effective on December 31, 1996 and shall apply to all taxable years beginning on or after January 1, 1997.