1. 1. Sections 135.500 to 135.529 shall be known and may be cited as the "Missouri Certified Capital Company Law".

2. 2. As used in sections 135.500 to 135.529, the following terms mean:

   1. (1) "Affiliate of a certified company":

      1. (a) Any person, directly or indirectly owning, controlling or holding power to vote ten percent or more of the outstanding voting securities or other ownership interests of the Missouri certified capital company;
      2. (b) Any person ten percent or more of whose outstanding voting securities or other ownership interest are directly or indirectly owned, controlled or held with power to vote by the Missouri certified capital company;
      3. (c) Any person directly or indirectly controlling, controlled by, or under common control with the Missouri certified capital company;
      4. (d) A partnership in which the Missouri certified capital company is a general partner;
      5. (e) Any person who is an officer, director or agent of the Missouri certified capital company or an immediate family member of such officer, director or agent;
   2. (2) "Applicable percentage", one hundred percent;
   3. (3) "Capital in a qualified Missouri business", any debt, equity or hybrid security, of any nature and description whatsoever, including a debt instrument or security which has the characteristics of debt but which provides for conversion into equity or equity participation instruments such as options or warrants which are acquired by a Missouri certified capital company as a result of a transfer of cash to a business. Capital in a qualified Missouri business shall not include secured debt instruments;
   4. (4) "Certified capital", an investment of cash by an investor in a Missouri certified capital company;
   5. (5) "Certified capital company", any partnership, corporation, trust or limited liability company, whether organized on a profit or not-for-profit basis, that is located, headquartered and registered to conduct business in Missouri that has as its primary business activity, the investment of cash in qualified Missouri businesses, and which is certified by the department as meeting the criteria of sections 135.500 to 135.529;
   6. (6) "Department", the Missouri department of economic development;
   7. (7) "Director", the director of the department of economic development or a person acting under the supervision of the director;
   8. (8) "Investor", any insurance company that contributes cash;
   9. (9) "Liquidating distribution", payments to investors or to the certified capital company from earnings;
   10. (10) "Person", any natural person or entity, including a corporation, general or limited partnership, trust or limited liability company;

   11. (11) "Qualified distribution", any distribution or payment to equity holders of a certified capital company in connection with the following:

       1. (a) Reasonable costs and expenses of forming, syndicating, managing and operating the certified capital company;
       2. (b) Management fees for managing and operating the certified capital company; and
       3. (c) Any increase in federal or state taxes, penalties and interest, including those related to state and federal income taxes, of equity owners of a certified capital company which related to the ownership, management or operation of a certified capital company;
   12. (12) "Qualified investment", the investment of cash by a Missouri certified capital company in such a manner as to acquire capital in a qualified Missouri business;
   13. (13) "Qualified Missouri business", an independently owned and operated business, which is headquartered and located in Missouri and which is in need of venture capital and cannot obtain conventional financing. Such business shall have no more than two hundred employees, eighty percent of which are employed in Missouri. Such business shall be involved in commerce for the purpose of manufacturing, processing or assembling products, conducting research and development, or providing services in interstate commerce, but excluding retail, real estate, real estate development, insurance and professional services provided by accountants, lawyers or physicians. If such business has been in existence for three years or less, its gross sales during its most recent complete fiscal years shall not have exceeded four million dollars. If such business has been in existence for longer than three years, its gross sales during its most recent complete fiscal year shall not have exceeded three million dollars. Any business which is classified as a qualified Missouri business at the time of the first investment in such business by a Missouri certified capital company shall, for a period of seven years from the date of such first investment, remain classified as a qualified Missouri business and may receive follow-on investments from any Missouri certified capital company and such follow-on investments shall be qualified investments even though such business may not meet the other qualifications of this subsection at the time of such follow-on investments;
   14. (14) "State premium tax liability", any liability incurred by an insurance company pursuant to the provisions of section 148.320, 148.340, 148.370 or 148.376, RSMo, and any other related provisions, which may impose a tax upon the premium income of insurance companies after January 1, 1997.

(L. 1996 H.B. 1237, A.L. 1997 2d Ex. Sess. S.B. 1)

Effective 12-23-97