June 19, 2009
Legislature approves innovative bill to boost job
growth in Tennessee
(NASHVILLE, TN), June 19, 2009 – Before adjourning the 2009 legislative session Thursday, the General Assembly passed innovative legislation designed to grow jobs through a program that would provide capital to small businesses. The bill, sponsored by Senator Doug Overbey (R-Maryville) and Senator Bill Ketron (R-Murfreesboro), creates the TNINVESTCO Program to provide benefits to small, medium-sized, and start-up businesses that do not enjoy the same economic development incentives that have
been provided to the larger companies that invest capital in Tennessee.
“The overwhelming majority of jobs in this state are created by small businesses,” said Senator Overbey. “We are a state of entrepreneurs, but there is a lack of adequate capital to take those ideas and grow a business. This bill will give them that opportunity.”
The bill, SB 1203, authorizes tax incentives for private investors to create a pool of capital totaling $120 million. That money will be divided among professional investment firms. These Tennessee-based firms will then invest the money in small businesses located and headquartered in Tennessee. The money must remain invested in Tennessee for ten years.
“This would be an instant opportunity to help soften the blow of unemployment in my area,” Ketron said. “There are many small businesses in our state that are on the edge of doing something big, but don’t have the capital. With the downturn of the economy, banks are reluctant to lend money, even though stimulus funds were provided for that purpose. This bill provides a viable alternative for them to get the capital needed to grow and create jobs.”
Ketron said a company is poised to bring in over 2,000 jobs into Rutherford County to retrofit energy efficient LED lighting if venture capital is available through this program. The company, currently located in Washington State, would relocate to Tennessee due to this program and the new green energy initiatives sweeping the nation.
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 must first go to the General Fund. Once enough money has been repaid, the remaining funds will be deposited in the Rural Opportunity Fund.
“Throughout the ten years the money is invested and even beyond, the state will reap the benefits of job growth from these small businesses,” added Overbey. “This is a great opportunity for economic development in our state.”
“Additionally, experts in this field have told us that this legislation will be a model for other states. It’s great for Tennessee to be a leader in looking after and assisting small and start-up businesses,” Overbey said.