HCS HB 202 Barnes, James

P R E F I L E D

HB 202 -- Tax Credits

This bill creates the Missouri Certified Capital Company Law. In its main provision, the bill:

(1) Provides for a credit against the state insurance premium tax for cash investments in a Missouri "Certified Capital Company," a profit or not-for-profit partnership, corporation or limited liability company which is primarily organized to invest capital in qualifying businesses;

(2) Defines a qualifying business as a Missouri-based business which employs no more than 300 employees and with gross sales of $7 million or less, excluding real estate development companies;

(3) Stipulates that the amount of the tax credit is to equal 120% of the investment and that no more than 10% of the aggregate credit may be applied against the tax liability in any taxable year. While the credit may not exceed the tax liability in a given year, the credit may be carried forward indefinitely;

(4) Requires the Department of Economic Development (DED) to administer the tax credit program, including the processing of applications for Certified Capital Company status; DED is required to issue or to deny the application for certification within 60 days, and to notify the Department of Revenue and the Department of Insurance of those companies receiving certification;

(5) Provides that in order to continue in the program, a certified capital company must, within 3 years of certification, have at least 30% of certified capital in qualified investments, and, within 5 years, have at least 50% of certified capital in qualified investments;

(6) Requires certified capital companies to submit quarterly reports and an annual audited financial statement to DED. In addition, DED is required to conduct an annual review of each company to insure program compliance;

(7) Provides for decertification if program requirements are violated. If decertified, a company forfeits the premium tax credits for the tax year in which decertification arose and for future tax years;

(8) Provides that the tax credits may be sold or transferred according to regulations adopted by DED; and

(9) Specifies that the program is effective December 31, 1995, and the provisions apply to tax years beginning on or after January 1, 1996.