135.516. Schedule of qualified investments--qualified distributions, when, requirements--qualified investment cost limit--company documents as closed records, when--company report to department of eco
Schedule of qualified investments--qualified distributions, when,requirements--qualified investment cost limit--company documents asclosed records, when--company report to department of economicdevelopment.
135.516. 1. To continue to be certified, a Missouri certifiedcapital company shall make qualified investments according to the followingschedule:
(1) Within two years after the date on which a Missouri certifiedcapital company is designated as a Missouri certified capital company atleast twenty-five percent of its certified capital shall be, or have been,placed in qualified investments;
(2) Within three years after the date on which a Missouri certifiedcapital company is designated as a Missouri certified capital company atleast forty percent of its certified capital shall be, or have been, placedin qualified investments;
(3) Within four years after the date on which a Missouri certifiedcapital company is designated as a Missouri certified capital company, atleast fifty percent of its total certified capital shall be, or have been,placed in qualified investments. A Missouri certified capital company maynot make an investment in an affiliate of the certified capital company.For the purposes of this subsection, if a legal entity is not an affiliatebefore a certified capital company initially invests in the entity, it willnot be an affiliate if a certified capital company provides additionalinvestment in such entity subsequent to its initial investment;
(4) A certified capital company, at least fifteen working days priorto making what it determines to be an initial qualified investment in aspecific qualified Missouri business, shall certify to the department thatthe company in which it or a qualified investing entity proposes to investis a qualified Missouri business. The certified capital company shallstate the amount of capital it or a qualified investing entity intends toinvest and the name of the business in which it or a qualified investingentity intends to invest. The certified capital company shall also provideto the department an explanation of its determination that the businessmeets the definition of a qualified Missouri business. If the departmentdetermines that the business does not meet the definition of a qualifiedMissouri business, it shall, within the fifteen-working-day period prior tothe making of the proposed investment, notify the certified capital companyof its determination and an explanation thereof. If the department failsto notify the certified capital company with respect to the proposedinvestment within the fifteen-working-day period prior to the making of theproposed investment, the company in which the certified capital company ora qualified investing entity proposes to invest shall be deemed to be aqualified Missouri business. If a certified capital company fails tonotify the department prior to making an initial investment in a business,the department may subsequently determine that the business in which thecertified capital company or a qualified investing entity invested was nota qualified Missouri business even though the business, at the time of theinvestment, met the requirements of subdivision (15) of subsection 2 ofsection 135.500;
(5) All certified capital which is not required to be placed inqualified investments or which has been placed in qualified investments andcan be received by the company, may be held or invested in such manner asthe Missouri certified capital company, in its discretion, deemsappropriate. The proceeds of all certified capital which is received by acertified capital company after it was originally placed in qualifiedinvestments may be placed again in qualified investments and shall counttoward any requirement in sections 135.500 to 135.529 with respect toplacing certified capital in qualified investments.
2. A certified capital company may make qualified distributions atany time. In order to make distributions, other than qualifieddistributions, a certified capital company must have made cumulativequalified investments, including those made through a qualified investingentity, in an amount cumulatively equal to at least one hundred percent ofits certified capital. Cumulative distributions to equity holders, otherthan qualified distributions, in excess of the certified capital company'soriginal certified capital and any additional capital contributions to thecertified capital company shall be subject to audit by a nationallyrecognized certified public accounting firm acceptable to the department,at the expense of the certified capital company. The audit shall determinewhether aggregate cumulative distributions to all investors and equityholders, other than qualified distributions, when combined with all taxcredits utilized by investors pursuant to sections 135.500 to 135.529, haveresulted in an annual internal rate of return of fifteen percent computedon the sum of total original certified capital of the certified capitalcompany and any additional capital contributions to the certified capitalcompany. Twenty-five percent of distributions made, other than qualifieddistributions, in excess of the amount required to produce a fifteenpercent annual internal rate of return, as determined by the audit, shallbe payable by the certified capital company to the Missouri developmentfinance board. Distributions or payments to debt holders of a certifiedcapital company, however, may be made without restriction with respect todebt owed to them by a certified capital company. A debt holder that isalso an investor or equity holder of a certified capital company mayreceive distributions or payments with respect to such debt withoutrestriction.
3. No qualified investment may be made at a cost to a Missouricertified capital company greater than fifteen percent of the totalcertified capital under management of the Missouri certified capitalcompany at the time of investment.
4. Documents and other materials submitted by Missouri certifiedcapital companies or by businesses for purposes of the continuance ofcertification may be deemed "closed records" pursuant to the provisions ofsection 620.014, RSMo.
5. Each Missouri certified capital company shall report the followingto the department:
(1) As soon as practicable after the receipt of certified capital,the name of each investor from which the certified capital was received,the amount of each investor's investment of certified capital and taxcredits computed without regard to any limitations under subsection 3 ofsection 135.503, and the date on which the certified capital was received;
(2) On a quarterly basis, the amount of the Missouri certifiedcapital company's certified capital at the end of the quarter, whether ornot the Missouri certified capital company has invested, together with anyinvestments made by a qualified investing entity that are deemed to havebeen made by the certified capital company, more than fifteen percent ofthe total certified capital under management in any one company, and allqualified investments that the Missouri certified capital company has madeor has been deemed to have been made through a qualified investing entity;
(3) Each Missouri certified capital company shall provide annualaudited financial statements to the department which include an opinion ofan independent certified public accountant to the department within ninetydays of the close of the fiscal year. At the same time, the certifiedcapital company shall also provide audited financial statements for anyqualified investing entity that has made qualified investments on itsbehalf, unless the financial results of such qualified investing entity areincluded in the consolidated financial statements of the certified capitalcompany. The audit shall address the methods of operation and conduct ofthe business of the Missouri certified capital company to determine if theMissouri certified capital company is complying with the statutes andprogram rules and that the funds received by the Missouri certified capitalcompany have been invested as required within the time limits provided bysections 135.500 to 135.529.
(L. 1996 H.B. 1237, A.L. 1997 2d Ex. Sess. S.B. 1, A.L. 2003 H.B. 289)