(b) The total amount of credits allowable pursuant to this section and credits allowable pursuant to K.S.A. 74-8205, 74-8206 and 74-8304, and amendments thereto, shall be attributable to not more than $50,000,000 of cash investments in Kansas venture capital companies, Kansas Venture Capital, Inc. and local seed capital pools. With respect to the additional amount of cash investments made eligible for tax credits by this act, $10,000,000 of such amount shall be dedicated and reserved until December 31, 1990, for cash investments in a seed capital fund or funds in which the Kansas technology enterprise corporation, or its subsidiaries, is an investor. The $50,000,000 amount of cash investments now eligible for the tax credits allowed pursuant to this section and K.S.A. 74-8205, 74-8206 and 74-8304 and amendments thereto shall be reduced to the extent that the total amount of cash investments received by such seed capital fund or funds before January 1, 1991, is less than $10,000,000. However, any such credits which were not claimed for investments made prior to January 1, 1991, may be allowed to a taxpayer for cash investment made in Kansas Venture Capital, Inc. pursuant to K.S.A. 74-8205 and 74-8206, and amendments thereto, not to exceed $2,595,236 of the $10,000,000 reserved under this subsection for investment in seed capital funds in which the Kansas technology enterprise corporation or its subsidiaries was an investor. A taxpayer may also be allowed a credit for cash investment made pursuant to K.S.A. 74-8304, and amendments thereto not to exceed $6,012,345 of the $10,000,000 reserved under this subsection if such taxpayer first purchases the entire interest of the Kansas technology enterprise corporation or its subsidiaries in Kansas venture capital companies established prior to January 1, 1991. However, no credit shall be allowed for cash investment which results in the purchase of the interest of the Kansas technology enterprise corporation or its subsidiaries in Kansas venture capital companies established prior to January 1, 1991.
(c) As used in this section, (1) "local seed capital pool" means money invested in a fund established to provide funding for use by small businesses for any one or more of the following purposes: (A) Development of a prototype product or process; (B) a marketing study to determine the feasibility of a new product or process; or (C) a business plan for the development and production of a new product or process;
(2) "Kansas business" means any small business owned by an individual, any partnership, association or corporation domiciled in Kansas, or any corporation, even if a wholly owned subsidiary of a foreign corporation, that does business primarily in Kansas or does substantially all of its production in Kansas.
(d) No credit from income tax liability shall be allowed for cash investment in a local seed capital pool unless: (1) The amount of private cash investment therein is $200,000 or more; (2) the moneys necessary to administer and operate the pool are funded from sources other than the private and public cash investments; and (3) funds invested by the local seed capital pool shall be invested at 100% in Kansas businesses.
(e) Public funds may be invested in a local seed capital pool except that each dollar of public funds, other than that which may be used to administer and operate a pool, shall be matched by not less than $2 of private cash investment. Public funds shall have a senior position to any private cash investment and may receive a lower rate of return than that allowable for a private cash investment.
(f) The provisions of this section, and amendments thereto, shall be applicable to all taxable years commencing after December 31, 1986.
History: L. 1987, ch. 365, § 1; L. 1988, ch. 313, § 4; L. 1989, ch. 241, § 2; L. 1996, ch. 236, § 2; L. 1998, ch. 108, § 7; L. 1998, ch. 177, § 1; July 1.
(b) The department of commerce, through the secretary, shall review the articles of incorporation or the articles of partnership of each applicant for certification and the business history of the applicant and determine that the capitalization is at least $200,000.
(c) Within 60 days of application, the secretary of commerce shall issue the certification and notify the department of revenue of such certification, or shall refuse the certification and issue an order so providing.
History: L. 1987, ch. 365, § 2; July 1.
(b) The secretary of commerce shall provide this information contained in subsection (a) to the department of revenue on an annual basis.
(c) The secretary of commerce shall conduct an annual review of each local seed capital pool certified to determine if the local seed capital pool is in compliance with the requirements of certification, to advise the local seed capital pool as to the certification status of its investments, and to ensure that no investment has been made in violation of the provisions of this act or rules and regulations promulgated by the department. The reasonable costs of the annual review shall be paid by each local seed capital pool according to a reasonable fee schedule adopted by the secretary. Any violation shall be grounds for decertification under this section.
(d) In undertaking the annual review the secretary of commerce shall use reasonable and generally accepted national standards of seed capital investment practice. If the secretary determines that a local seed capital pool is not in substantial compliance with the requirements for continuing in certification, the secretary shall, by written notice, inform the officers of the pool and the board of directors or partners that they will be decertified in 120 days from the date of mailing of the notice unless they correct the deficiencies and are once again in compliance with the requirements for certification.
(e) At the end of the 120-day period, if the local seed capital pool is still not in substantial compliance, the secretary of commerce shall send a notice of decertification to the pool and to the secretary of the department of revenue. Decertification of a local seed capital pool shall cause the forfeiture by the pool of any right or interest to the tax credit under the provisions of this act and shall cause the total amount of tax credit previously claimed by persons under the program to be due and payable.
(f) Following each annual examination, the secretary shall notify the department of revenue of any local seed capital pools that are not in compliance with this section.
History: L. 1987, ch. 365, § 3; July 1.
History: L. 1987, ch. 365, § 4; July 1.
(1) The number of local seed capital pools;
(2) the total tax credit generated;
(3) the total investments made in Kansas venture capital companies;
(4) the total investments in Kansas businesses by local seed capital pools;
(5) an estimate of jobs created or preserved under the program; and
(6) an estimate of the multiplier effect on the Kansas economy of the program.
(b) Additionally, in the report the secretary shall evaluate the success of the program in collaboration with Kansas, Inc. and the standing committee on commerce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development, and may include specific recommendations for legislation.
History: L. 1987, ch. 365, § 5; L. 1993, ch. 136, § 17; L. 1996, ch. 205, § 12; L. 2003, ch. 154, § 77; July 1.
History: L. 1987, ch. 365, § 6; July 1.