HCSHB959--RURALACCESSTOCAPITALACT
SPONSOR: Gregory
COMMITTEEACTION:Voted"DoPasswithHCS"bytheStanding
CommitteeonRuralCommunityDevelopmentbyavoteof5to3.
ThefollowingisasummaryoftheHouseCommitteeSubstituteforHB
959.
Thisbillestablishesthe"MissouriRuralAccesstoCapitalAct",
whichprovidesataxcreditforcertaininvestmentsmadein
businesseslocatedinruralareasinthisstate.
Thebillallowsinvestorstomakecapitalinvestmentsinarural
fund,asdefinedinthebill.Aruralfundwishingtoaccept
investmentsascapitalinvestmentsmustapplytotheDepartmentof
EconomicDevelopment. Theapplicationmustincludetheamountof
capitalinvestmentrequested,acopyoftheapplicant'slicenseas
aruralbusinessorsmallbusinessinvestmentcompany,evidence
thattheapplicanthasmadeatleast$100millionininvestmentsin
nonpubliccompanieslocatedincountiesthroughouttheUnited
Stateswithapopulationlessthan50,000,evidencethatthe
applicanthasmadeatleast$30millionininvestmentsinnonpublic
companieslocatedinMissouri,andabusinessplanthatincludesa
revenueimpactstatementprojectingstateandlocaltaxrevenueto
begeneratedbytheapplicant'sproposedqualifiedinvestments.
Theruralfundmustalsosubmitanonrefundableapplicationfeeof
$5,000.TheDepartmentmustgrantordenyanapplicationwithin60
daysofreceipt.
TheDepartmentmustdenyanapplicationifsuchapplicationis
incompleteorinsufficient,iftherevenueimpactassessmentdoes
notdemonstratethatthebusinessplanwillresultinapositive
economicimpactonthestateovera10yearperiod,orifthe
Departmenthasalreadyapprovedthemaximumamountofcapital
investmentauthority.
Investorsareallowedataxcreditforaperiodofsixyears
beginningwiththeyeartheinvestormadeacapitalinvestment.
Thetaxcreditmustbeequaltoapercentageofthecapital
investmentasexplainedinthebill.Taxcreditsissuedmustnot
berefundable,butmaybecarriedforwardtoanyofthefive
subsequenttaxyears.Nomorethan$16millionintaxcreditsmay
beauthorizedinagivencalendaryearassetoutinthebill.
Ruralfundsmustusecapitalinvestmentsmadebyinvestorstomake
qualifiedinvestmentsineligiblebusinesses. Aneligiblebusiness
isabusinessthat,atthetimeofthequalifiedinvestment,has fewerthan250employees,hasitsprincipalbusinessoperationsin
thestate,andisengagedinspecifiedindustriesortheDepartment
determinesthattheinvestmentisbeneficialtotheruralarea.
TheDepartmentmayrecapturetaxcreditsiftheruralfunddoesnot
invest60%ofitscapitalinvestmentauthorityinqualified
investmentswithintwoyearsofthedateofthecapitalinvestment,
and100%ofitscapitalinvestmentauthoritywithinthreeyears,if
theruralfundfailstomaintainqualifiedinvestmentsequalto90%
ofitscapitalinvestmentauthorityinyearsthreethroughsix,if
priortoexitingtheprogramor30daysafterthesixthyear,the
ruralfundmakesadistributionorpaymentthatresultsinthefund
havinglessthan100%ofitscapitalinvestmentauthorityinvested
inqualifiedinvestments,oriftheruralfundviolatesprovisions
ofthebill.
RuralfundsmustsubmitannualreportstotheDepartment,including
thenameandlocationofeacheligiblebusinessreceivinga
qualifiedinvestment,thenumberofjobscreatedandjobsretained
asaresultofqualifiedinvestments,theaveragesalaryofsuch
jobs,andanyotherinformationrequiredbytheDepartment,allas
detailedinthebill.
Atanytimeafterthesixthanniversaryofthecapitalinvestment,
aruralfundmayapplytotheDepartmenttoexittheprogram.The
Departmentmustrespondtosuchapplicationwithin30days.Ifthe
exitapplicationisdenied,theDepartment'snoticeshallinclude
thereasonsforitsdecision.Aruralfundshallbesubjectto
penaltiesfornotmeetingprojectedjobcreationmetricsas
indicatedinthebill.
Theprovisionsofthenewprogramautomaticallysunsetsixyears
aftertheeffectivedateofthebill.
ThisbillissimilartoHB1885andSB675(2022).
Thefollowingisasummaryofthepublictestimonyfromthe
committeehearing. Thetestimonywasbasedontheintroduced
versionofthebill.
PROPONENTS: Supporterssaythatthisbillcreatesaprogramto
infusecapitalintoruralbusinesses. Currently,thereare
programstohelpverysmallandverylargebusinessesaccess
additionalcapital,butthemidsizebusinesseshavedifficulty
financingbusinessexpansions,especiallyinruralareas.Five
stateshaveinstitutedsimilarprogramsandinearlystages,are
seeingatleasta1:1returnoninvestment. TestifyinginpersonforthebillwereRepresentative Gregory;Alex
Stepanek,AdvantageCapital;MandiBoehringer,GeorgiaRural
InvestmentFund;MissouriChamberofCommerce;andMissouri
Realtors.
OPPONENTS: Therewasnooppositionvoicedtothecommittee.
Writtentestimonyhasbeensubmittedforthisbill.Thefull
writtentestimonyandwitnessestestifyingonlinecanbefound
underTestimonyonthebillpageontheHousewebsite.