Section 620.495

Title XL ADDITIONAL EXECUTIVE DEPARTMENTS

Chapter 620

Effective - 28 Nov 2007, see footnote   

  620.495.  Small business incubator program — definitions — tax credit. — 1.  This section shall be known as the "Small Business Incubators Act".

  2.  As used in this section, unless the context clearly indicates otherwise, the following words and phrases shall mean:

  (1)  "Department", the department of economic development;

  (2)  "Incubator", a program in which small units of space may be leased by a tenant and in which management maintains or provides access to business development services for use by tenants or a program without infrastructure in which participants avail themselves of business development services to assist in the growth of their start-up small businesses;

  (3)  "Local sponsor" or "sponsor", an organization which enters into a written agreement with the department to establish, operate and administer a small business incubator program or to provide funding to an organization which operates such a program;

  (4)  "Participant", a sole proprietorship, business partnership or corporation operating a business for profit through which the owner avails himself or herself of business development services in an incubator program;

  (5)  "Tenant", a sole proprietorship, business partnership or corporation operating a business for profit and leasing or otherwise occupying space in an incubator.

  3.  There is hereby established under the direction of the department a loan, loan guarantee and grant program for the establishment, operation and administration of small business incubators, to be known as the "Small Business Incubator Program".  A local sponsor may submit an application to the department to obtain a loan, loan guarantee or grant to establish an incubator.  Each application shall:

  (1)  Demonstrate that a program exists that can be transformed into an incubator at a specified cost;

  (2)  Demonstrate the ability to directly provide or arrange for the provision of business development services for tenants and participants of the incubator.  These services shall include, but need not be limited to, financial consulting assistance, management and marketing assistance, business education, and physical services;

  (3)  Demonstrate a potential for sustained use of the incubator program by eligible tenants and participants, through a market study or other means;

  (4)  Demonstrate the ability to manage and operate the incubator program;

  (5)  Include such other information as the department may require through its guidelines.

  4.  The department shall review and accept applications based on the following criteria:

  (1)  Ability of the local sponsor to carry out the provisions of this section;

  (2)  Economic impact of the incubator on the community;

  (3)  Conformance with areawide and local economic development plans, if such exist;

  (4)  Location of the incubator, in order to encourage geographic distribution of incubators across the state.

  5.  Loans, loan guarantees and grants shall be administered in the following manner:

  (1)  Loans awarded or guaranteed and grants awarded shall be used only for the acquisition and leasing of land and existing buildings, the rehabilitation of buildings or other facilities, construction of new facilities, the purchase of equipment and furnishings which are necessary for the creation and operation of the incubator, and business development services including, but not limited to, business management advising and business education;

  (2)  Loans, loan guarantees and grants may not exceed fifty percent of total eligible project costs;

  (3)  Payment of interest and principal on loans may be deferred at the discretion of the department.

  6.  A local sponsor, or the organization receiving assistance through the local sponsor, shall have the following responsibilities and duties in establishing and operating an incubator with assistance from the small business incubator program:

  (1)  Secure title on a facility for the program or a lease of a facility for the program;

  (2)  Manage the physical development of the incubator program, including the provision of common conference or meeting space;

  (3)  Furnish and equip the program to provide business services to the tenants and participants;

  (4)  Market the program and secure eligible tenants and participants;

  (5)  Provide financial consulting, marketing and management assistance services or arrange for the provision of these services for tenants and participants of the incubator, including assistance in accessing private financial markets;

  (6)  Set rental and service fees;

  (7)  Encourage the sharing of ideas between tenants and participants and otherwise aid the tenants and participants in an innovative manner while they are within the incubator;

  (8)  Establish policies and criteria for the acceptance of tenants and participants into the incubator and for the termination of occupancy of tenants so as to maximize the opportunity to succeed for the greatest number of tenants, consistent with those specified in this section.

  7.  The department:

  (1)  May adopt such rules, statements of policy, procedures, forms and guidelines as may be necessary for the implementation of this section;

  (2)  May make loans, loan guarantees and grants to local sponsors for incubators;

  (3)  Shall ensure that local sponsors receiving loans, loan guarantees or grants meet the conditions of this section;

  (4)  Shall receive and evaluate annual reports from local sponsors.  Such annual reports shall include, but need not be limited to, a financial statement for the incubator, evidence that all tenants and participants in the program are eligible under the terms of this section, and a list of companies in the incubator.

  8.  The department of economic development is also hereby authorized to review any previous loans made under this program and, where appropriate in the department's judgment, convert such loans to grant status.

  9.  On or before January first of each year, the department shall provide a report to the governor, the chief clerk of the house of representatives and the secretary of the senate which shall include, but need not be limited to:

  (1)  The number of applications for incubators submitted to the department;

  (2)  The number of applications for incubators approved by the department;

  (3)  The number of incubators created through the small business incubator program;

  (4)  The number of tenants and participants engaged in each incubator;

  (5)  The number of jobs provided by each incubator and tenants and participant of each incubator;

  (6)  The occupancy rate of each incubator;

  (7)  The number of firms still operating in the state after leaving incubators and the number of jobs they have provided.

  10.  There is hereby established in the state treasury a special fund to be known as the "Missouri Small Business Incubators Fund", which shall consist of all moneys which may be appropriated to it by the general assembly, and also any gifts, contributions, grants or bequests received from federal, private or other sources.  Moneys for loans, loan guarantees and grants under the small business incubator program may be obtained from appropriations made by the general assembly from the Missouri small business incubators fund.  Any moneys remaining in the Missouri small business incubators fund at the end of any fiscal year shall not lapse to the general revenue fund, as provided in section 33.080, but shall remain in the Missouri small business incubators fund.

  11.  For any taxable year beginning after December 31, 1989, a taxpayer, including any charitable organization which is exempt from federal income tax and whose Missouri unrelated business taxable income, if any, would be subject to the state income tax imposed under chapter 143, shall be entitled to a tax credit against any tax otherwise due under the provisions of chapter 143, or chapter 147, or chapter 148, excluding withholding tax imposed by sections 143.191 to 143.265, in the amount of fifty percent of any amount contributed by the taxpayer to the Missouri small business incubators fund during the taxpayer's tax year or any contribution by the taxpayer to a local sponsor after the local sponsor's application has been accepted and approved by the department.  The tax credit allowed by this subsection shall be claimed by the taxpayer at the time he files his return and shall be applied against the income tax liability imposed by chapter 143, or chapter 147, or chapter 148, after all other credits provided by law have been applied.  That portion of earned tax credits which exceeds the taxpayer's tax liability may be carried forward for up to five years.  The aggregate of all tax credits authorized under this section shall not exceed five hundred thousand dollars in any taxable year.

  12.  Notwithstanding any provision of Missouri law to the contrary, any taxpayer may sell, assign, exchange, convey or otherwise transfer tax credits allowed in subsection 11 of this section under the terms and conditions prescribed in subdivisions (1) and (2) of this subsection.  Such taxpayer, hereinafter the assignor for the purpose of this subsection, may sell, assign, exchange or otherwise transfer earned tax credits:

  (1)  For no less than seventy-five percent of the par value of such credits; and

  (2)  In an amount not to exceed one hundred percent of annual earned credits.  

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The taxpayer acquiring earned credits, hereinafter the assignee for the purpose of this subsection, may use the acquired credits to offset up to one hundred percent of the tax liabilities otherwise imposed by chapter 143, or chapter 147, or chapter 148 excluding withholding tax imposed by sections 143.191 to 143.265.  Unused credits in the hands of the assignee may be carried forward for up to five years.  The assignor shall enter into a written agreement with the assignee establishing the terms and conditions of the agreement and shall perfect such transfer by notifying the department of economic development in writing within thirty calendar days following the effective day of the transfer and shall provide any information as may be required by the department of economic development to administer and carry out the provisions of this section.  The director of the department of economic development shall prescribe the method for submitting applications for claiming the tax credit allowed under subsection 11 of this section and shall, if the application is approved, certify to the director of revenue that the taxpayer claiming the credit has satisfied all the requirements specified in this section and is eligible to claim the credit.

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(L. 1986 S.B. 554 § 1, A.L. 1989 H.B. 249 & 47, A.L. 1993 H.B. 566, A.L. 2007 1st Ex. Sess. H.B. 1)

Effective 11-28-07

CROSS REFERENCE:

Tax Credit Accountability Act of 2004, additional requirements, 135.800 to 135.830