Contact: Darlene Schlicher (615) 741-6336 or email: darlene.schlicher@capitol.tn.us

(NASHVILLE, TN), May 25, 2010 — The State Senate has approved a major job creation bill sponsored by State Senator Doug Overbey (R-Maryville) to expand the state’s TNInvestco tax credit program by $80 million. The innovative new program provides investment capital to small, medium and start up businesses in Tennessee and is considered a model job growth plan by other states.

“Small businesses provide 67 percent of first jobs and produce the majority of innovations,” said Senator Overbey, who also sponsored the bill which implemented the program. “However, access to capital is a huge obstacle to success. This legislation provides a vehicle for small and start up businesses to take an innovative idea and commercialize it, creating jobs for Tennesseans.”

In October, six investment firms were chosen to receive an allocation of $20 million dollars in gross premiums tax credits which are then marketed to insurance companies to create a pool of venture capital funds for investment in start-up and mid-stage companies in Tennessee. The legislation would allow the program to include four additional participants already selected as alternates. It also adds improvements to the bill to increase transparency and accountability in the program. Overbey said the improvements include a scorecard kept by the state to make sure that qualified TNInvestcos are following program guidelines and obligations to maximize investment potential.

Under the plan, investors receive a tax credit against insurance premiums taxes that spread over years three through ten of the program.  Even though the capital will be available for small businesses immediately, there are no tax credits for investors until 2012.  Capital returned to the state through the program must first go to the General Fund, with any remaining funds to be deposited in the Rural Opportunity Fund which helps economically distressed counties grow jobs. Other state programs are generally dollar for dollar subsidies.

“Innovation does not know geographical boundaries,” added Overbey. “What truly separates this program from those being used in other states is that it will pay for itself down the road and puts money into the Rural Opportunity Fund. That fund focuses on job growth in some of the most economically distressed areas of the state where unemployment is very high.”

“TNInvestco allows us to create jobs, provide capital for small and start up businesses and also helps us get our seed investment back,” Overbey continued. “I am very pleased the bill was approved in our State Senate.”

The bill is pending action in the House Finance Committee where it will be heard today. It will then go to the House floor for final action as the General Assembly is looking to conclude their business by next week.

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Reference: Senate Bill 3049 / Other details on the program can be founds at www.tninvestco.gov

This entry was posted on Wednesday, May 26th, 2010 at 4:35 pm and is filed under Featured News, In The News, Press Releases.
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