HB 1495 -- Economic Development

Sponsor:  Rizzo

This bill establishes economic development incentives for small
businesses through the Missouri Small Business Promotion Act.
The bill defines a small business as any for-profit business
with fewer than 500 full time employees, or any business
determined by the Department of Economic (DED) to be not
dominant in its field.  In its main provisions, the bill:

(1)  Authorizes DED to make loans or equity investments to small
businesses, from appropriations made to the newly established
Capital Revolving Loan Fund or the Equity Investment Revolving
Fund, for the purpose of job creation or retention within small
businesses, or to modernize or maintain the competitiveness of
firms;

(2)  Authorizes DED to make grants to or through financial
intermediaries from appropriations made to the Capital Revolving
Fund for the purpose of providing technical assistance to not--
for-profit organizations;

(3)  Authorizes DED to make loans to or investments in
businesses that received federal Phase I Small Business
Innovation Research grants, but which have not yet received
Phase II grants;

(4)  Authorizes DED to enter into contracts, establish
applications, and determine and collect fees related to
implementing the provisions of the act, and to take whatever
actions are appropriate to protect the state in the event of
bankruptcy, default, or foreclosure;

(5)  Requires that a loan made through this act only be made if
DED determines that the project would not be undertaken without
the loan, and be matched by other lenders or investors; loans
are limited to the lesser of 25% of the amount of a project or
$750,000, unless these limits are waived by the Director of DED;

(6)  Requires that loans be made only if DED determines that a
project has the potential to create or retain employment, or to
modernize or improve the competitiveness of a firm; loans are to
be made only with businesses certifying the project as a new
plant start-up, modernization or expansion, or a new venture
opportunity not involving the relocation of an existing business
from one site in the state to another, unless the relocation
results in substantial employment growth;

(7)  Establishes a Credit Review Committee within DED, the
composition, duration, and authority of which is to be
determined by DED;

(8)  Authorizes DED to use different criteria in making loans to
minority, female, or disability small businesses, as defined in
the bill, requiring such loans to be protected by security, and
limiting the loans to $50,000 or 50% of project costs, unless
the Director of DED waives these limits;

(9)  Authorizes DED to use financial intermediaries to assist
young firms, mature firms, and other targeted credit--
disadvantaged firms;

(10)  Establishes a Comprehensive Community Technical Assistance
Project within DED to assist 5 communities selected by DED
through a competitive process for the following purposes:  to
develop a comprehensive understanding of the community; to plan
for industrial retention and development; to establish an early
warning network to warn of potential business closings; and to
provide ongoing technical assistance;

(11)  Authorizes DED to administer equity investments and equity
intermediary agreements in and on behalf of businesses,
including young, high risk, technology-based firms;

(12)  Requires that each year in January the DED report to the
Governor and the General Assembly on the operations of the
Capital Revolving Loan Fund and the Equity Investment Revolving
Fund; and

(13)  Provides DED with rule-making authority for implementation
of the bill's provisions.