620.495. Small business incubator program--definitions--tax credit.
Small business incubator program--definitions--tax credit.
620.495. 1. This section shall be known as the "Small BusinessIncubators Act".
2. As used in this section, unless the context clearly indicatesotherwise, 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 beleased by a tenant and in which management maintains or provides access tobusiness development services for use by tenants or a program withoutinfrastructure in which participants avail themselves of businessdevelopment services to assist in the growth of their start-up smallbusinesses;
(3) "Local sponsor" or "sponsor", an organization which enters into awritten agreement with the department to establish, operate and administera small business incubator program or to provide funding to an organizationwhich operates such a program;
(4) "Participant", a sole proprietorship, business partnership orcorporation operating a business for profit through which the owner availshimself or herself of business development services in an incubatorprogram;
(5) "Tenant", a sole proprietorship, business partnership orcorporation operating a business for profit and leasing or otherwiseoccupying space in an incubator.
3. There is hereby established under the direction of the departmenta loan, loan guarantee and grant program for the establishment, operationand administration of small business incubators, to be known as the "SmallBusiness Incubator Program". A local sponsor may submit an application tothe department to obtain a loan, loan guarantee or grant to establish anincubator. Each application shall:
(1) Demonstrate that a program exists that can be transformed into anincubator at a specified cost;
(2) Demonstrate the ability to directly provide or arrange for theprovision of business development services for tenants and participants ofthe 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 incubatorprogram by eligible tenants and participants, through a market study orother means;
(4) Demonstrate the ability to manage and operate the incubatorprogram;
(5) Include such other information as the department may requirethrough its guidelines.
4. The department shall review and accept applications based on thefollowing criteria:
(1) Ability of the local sponsor to carry out the provisions of thissection;
(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 geographicdistribution of incubators across the state.
5. Loans, loan guarantees and grants shall be administered in thefollowing manner:
(1) Loans awarded or guaranteed and grants awarded shall be used onlyfor the acquisition and leasing of land and existing buildings, therehabilitation of buildings or other facilities, construction of newfacilities, the purchase of equipment and furnishings which are necessaryfor the creation and operation of the incubator, and business developmentservices including, but not limited to, business management advising andbusiness education;
(2) Loans, loan guarantees and grants may not exceed fifty percent oftotal eligible project costs;
(3) Payment of interest and principal on loans may be deferred at thediscretion of the department.
6. A local sponsor, or the organization receiving assistance throughthe local sponsor, shall have the following responsibilities and duties inestablishing and operating an incubator with assistance from the smallbusiness incubator program:
(1) Secure title on a facility for the program or a lease of afacility 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 thetenants and participants;
(4) Market the program and secure eligible tenants and participants;
(5) Provide financial consulting, marketing and management assistanceservices or arrange for the provision of these services for tenants andparticipants of the incubator, including assistance in accessing privatefinancial markets;
(6) Set rental and service fees;
(7) Encourage the sharing of ideas between tenants and participantsand otherwise aid the tenants and participants in an innovative mannerwhile they are within the incubator;
(8) Establish policies and criteria for the acceptance of tenants andparticipants into the incubator and for the termination of occupancy oftenants so as to maximize the opportunity to succeed for the greatestnumber of tenants, consistent with those specified in this section.
7. The department:
(1) May adopt such rules, statements of policy, procedures, forms andguidelines as may be necessary for the implementation of this section;
(2) May make loans, loan guarantees and grants to local sponsors forincubators;
(3) Shall ensure that local sponsors receiving loans, loan guaranteesor 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 financialstatement for the incubator, evidence that all tenants and participants inthe program are eligible under the terms of this section, and a list ofcompanies in the incubator.
8. The department of economic development is also hereby authorizedto review any previous loans made under this program and, where appropriatein the department's judgment, convert such loans to grant status.
9. On or before January first of each year, the department shallprovide a report to the governor, the chief clerk of the house ofrepresentatives and the secretary of the senate which shall include, butneed not be limited to:
(1) The number of applications for incubators submitted to thedepartment;
(2) The number of applications for incubators approved by thedepartment;
(3) The number of incubators created through the small businessincubator program;
(4) The number of tenants and participants engaged in each incubator;
(5) The number of jobs provided by each incubator and tenants andparticipant of each incubator;
(6) The occupancy rate of each incubator;
(7) The number of firms still operating in the state after leavingincubators and the number of jobs they have provided.
10. There is hereby established in the state treasury a special fundto be known as the "Missouri Small Business Incubators Fund", which shallconsist of all moneys which may be appropriated to it by the generalassembly, and also any gifts, contributions, grants or bequests receivedfrom federal, private or other sources. Moneys for loans, loan guaranteesand grants under the small business incubator program may be obtained fromappropriations made by the general assembly from the Missouri smallbusiness incubators fund. Any moneys remaining in the Missouri smallbusiness incubators fund at the end of any fiscal year shall not lapse tothe general revenue fund, as provided in section 33.080, RSMo, but shallremain in the Missouri small business incubators fund.
11. For any taxable year beginning after December 31, 1989, ataxpayer, including any charitable organization which is exempt fromfederal income tax and whose Missouri unrelated business taxable income, ifany, would be subject to the state income tax imposed under chapter 143,RSMo, shall be entitled to a tax credit against any tax otherwise due underthe provisions of chapter 143, RSMo, or chapter 147, RSMo, or chapter 148,RSMo, excluding withholding tax imposed by sections 143.191 to 143.265,RSMo, in the amount of fifty percent of any amount contributed by thetaxpayer to the Missouri small business incubators fund during thetaxpayer's tax year or any contribution by the taxpayer to a local sponsorafter the local sponsor's application has been accepted and approved by thedepartment. The tax credit allowed by this subsection shall be claimed bythe taxpayer at the time he files his return and shall be applied againstthe income tax liability imposed by chapter 143, RSMo, or chapter 147,RSMo, or chapter 148, RSMo, after all other credits provided by law havebeen applied. That portion of earned tax credits which exceeds thetaxpayer's tax liability may be carried forward for up to five years. Theaggregate of all tax credits authorized under this section shall not exceedfive 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 taxcredits allowed in subsection 11 of this section under the terms andconditions prescribed in subdivisions (1) and (2) of this subsection. Suchtaxpayer, hereinafter the assignor for the purpose of this subsection, maysell, assign, exchange or otherwise transfer earned tax credits:
(1) For no less than seventy-five percent of the par value of suchcredits; and
(2) In an amount not to exceed one hundred percent of annual earnedcredits.
The taxpayer acquiring earned credits, hereinafter the assignee for thepurpose of this subsection, may use the acquired credits to offset up toone hundred percent of the tax liabilities otherwise imposed by chapter143, RSMo, or chapter 147, RSMo, or chapter 148, RSMo, excludingwithholding tax imposed by sections 143.191 to 143.265, RSMo. Unusedcredits in the hands of the assignee may be carried forward for up to fiveyears. The assignor shall enter into a written agreement with the assigneeestablishing the terms and conditions of the agreement and shall perfectsuch transfer by notifying the department of economic development inwriting within thirty calendar days following the effective day of thetransfer and shall provide any information as may be required by thedepartment of economic development to administer and carry out theprovisions of this section. The director of the department of economicdevelopment shall prescribe the method for submitting applications forclaiming the tax credit allowed under subsection 11 of this section andshall, if the application is approved, certify to the director of revenuethat the taxpayer claiming the credit has satisfied all the requirementsspecified in this section and is eligible to claim the credit.
(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, RSMo 135.800 to 135.830