HB 664 -- New Enterprise Creation Act

Co-Sponsors:  Scheve, Rizzo

This bill provides seed capital for Missouri businesses through
the Missouri New Enterprise Creation Act.  To oversee this new
program, an 11 member board is established, comprised of 5
representatives of innovation centers having a contract with the
Department of Economic Development to provide business services
and 6 members appointed by the Governor.  The department is to
provide support services to the board.

By July 1, 2000, the qualified innovation centers are to
develop, approve, and submit to the board a "Missouri Seed
Capital and Commercialization Strategy," by which to recommend
between one and 5 qualified funds for investing seed capital in
Missouri businesses.  The board must approve or reject the
strategy within 3 months of receiving the strategy; board
approval of a strategy is required before tax credit incentives
authorized by this bill can be awarded.  After the strategy is
approved by the board, the department is to authorize the use of
up to $40 million in tax credits.

Persons making cash contributions to qualified funds are
eligible for a 100% credit against income taxes, corporate
franchise taxes, or taxes on financial institutions.  The tax
credits, which are administered by the department may be carried
forward 10 years and may be assigned, sold, or transferred.  The
cash contributions to qualified funds are to be used to invest
seed capital, start-up capital, or follow-up capital in certain
Missouri businesses; not more than 10% of the moneys in a
qualified fund may be invested in a single qualified business.
A tax of 15% is to be assessed against any moneys in a qualified
fund which are not used for qualified investments or for
allowable administrative costs.  These tax revenues are to be
deposited in the general revenue fund.

The qualified funds are required to contract with the innovation
centers to entitle all of the qualified innovation centers to
receive and share equally at least 60% of the equity, dividends,
or other earnings of the fund generated from the cash
contributions.  These moneys may be used only for reinvestment
in qualified funds in order to provide ongoing seed capital,
start-up capital, and follow-up capital for qualified Missouri
businesses.