Thursday, May 5, 2011

MN - Plagiarizing Legislation - Again

Do our state legislators write anything original anymore?
Do our state legislators just pump out pre-written legislation to favor whatever corporate interests they prefer?
What happened to representation for the people?

Tennessee – Small Business Investment Company Credit Act’.  Aka: TNInvestco

Georgia - small business investment company credit;

Wyoming - small business investment company

Minnesota – “Business Investment Company Credit”

All the same bill – all the exact same language –
That’s not coincidence, I don't believe in legislative coincidence anymore.
It smells like a piece of ALEC Model Legislation – but I can’t prove it.

Sounds nice –
sounds like they are doing something really good for small business –
but don’t let the name fool you.
The title of the Wyoming bill is more descriptive of what the legislation actually does.

This legislation sets up a private company that doles out tax credits of up to 80% of their investment to unknown companies - with little to no oversight.

And based on what I’ve read – the big winners in this – huge - are the  insurance companies.

And it doesn’t look like it’s working out too well for Virginia.

Why would we want this mess in Minnesota?
Who’s IOU is this bill paying back?

ANALYSIS: TNInvestco procedures, amendment bad for government transparency
The initial legislation and its expansion are trumpeted by the administration and some in the state’s venture capital community as a potentially “transformational” program that could change the face of Tennessee’s economy with new jobs and new businesses.

A closer examination of the law, an amendment offered by Rep. Charles Sargent (R-Franklin) and the Bredesen administration’s process to award 0 million in tax credits under TNInvestco all suggest an agenda that is as much about doing government business with taxpayer dollars in secret as it is about creating jobs.

While it seems simple enough, the Bredesen administration’s application of the original TNInvestco law should leave any Tennessean that holds dear the concept of open government horrified.  The Sargent amendment would only make the situation worse.

Furthermore, the Sargent amendment gives the TNInvestcos the ability to potentially throw good money after bad. The amendment if passed would allow TNInvestcos to invest money into companies they have already invested in with other venture capital funds they manage. So, if a venture capitalist needs to shore up an investment they have already made with one fund they manage – whether it is a good or bad investment, a failing or thriving company – they can do so with millions of dollars courtesy of the State of Tennessee. And, little of their activity of results will be known to the public that will bear the fiscal burden of these tax credits sold to insurance companies.

Tennessee bill backed by those with insurance interests will aid insurance companies
The bi-partisan Tennessee Small Business Investment Company Credit Act (House Bill 2083/Senate Bill 1203) would create a $100 million fund for small business investment in Tennessee and states that a private company would manage the money. This legislation creates the Tennessee Small Business Investment Company Credit or TSBIC wherein insurance companies can pay a $7500 fee and invest $500,000 or more to qualify for the credit.

The bill would make it so the insurance companies that participate in the fund would earn a tax credit that is 80 percent of their investment in the fund against their premium tax. The decreases in state revenue thanks to the tax credit program are estimated at over $5 million each year for a minimum of five years starting Fiscal Year 2013-2014

The state is attempting to fight off an open records lawsuit from Larry H. Coleman, president of Coleman Swenson Booth Inc, a venture capital fund seeking answers as to why firms were either accepted into or rejected from the TNInvestco program.

TNInvestco is a state program enabled by a law passed in 2009, the Tennessee Small Business Investment Company Credit Act. The law established a base of $120 million of insurance premium tax credits that six investment firms certified by the state can sell to insurance companies who then invest the proceeds into Tennessee small businesses.

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