A House-passed bill to establish startup grants for new businesses in Missouri received a favorable hearing from a Senate committee on Wednesday. The grants would go to young companies that have won regional, national or international startup competitions.
The bill, sponsored by Rep. Noel Torpey, R-Independence, would provide up to $2 million in state funds each to nonprofits in Kansas City, St. Louis, Springfield and Columbia, and up to $500,000 to two nonprofits in other parts of the state.
The nonprofits, dubbed Early Stage Business Development Corporations, would first have to raise $2 million from other sources before receiving the state money - $150,000 for the out-state nonprofits. They would then be responsible for granting awards of up to $200,000 to promising early stage businesses that "have potential regional, national, or international sales, or potential development of new technologies."
The state funding would be subject to appropriations each year and would be capped at a total of $9 million; the House included $4.5 million for the program in the budget it already passed this session. Torpey's bill passed from the House 134-19.
"The sticking point for so many of us is every year we've got to do a budget, and we've got to make decisions," Sen. John Lamping, R-Ladue, said. "We'd love to have the appropriators to have the right to make that decision, and as we are so very much aware that's not the nature of our little tax credit programs...."
A St. Louis-based nonprofit, Arch Grants, already gives businesses awards similar to those envisioned in the law, and three of the program's grant winners told the committee the stories of starting their businesses and supported the legislation.
Steven Marciniak, co-founder and CEO of TrackBill, a company that provides a desktop and mobile application for users to track legislation in all 50 state governments and Congress, said he sold his blood plasma to keep the company going during its early days.
The company now has six employees in St. Louis, is planning to hire five more in the next year and has raised more than $650,000 to support its growth.
"That's all due to the idea ... of being able to say, "you know what, we believe in these companies, we're going to grow St. Louis,' and that can happen across the state," Marciniak said. "There are just so many opportunities there."
The Senate committee also heard a much larger House-passed bill that would limit the controversial low-income housing and historic preservation tax credits and renew a tax credit for land assemblage of distressed areas. But some of the senators expressed a desire to limit the programs even further.
The bill would phase in a cap on the low-income housing tax credit from $130 million in 2015 to $110 million by 2019. There is currently no limit on the credits. It would also cap historic preservation tax credits at $110 million. Bill sponsor Rep. Anne Zerr, R-St. Charles, told the senators she was open to compromising further on limits to the programs if that's what it took to win approval.
"That's where we want to start the conversation," Zerr said. "And I think we can come to some common ground."
The bill's proponents pointed to the Northside Regeneration project, a large redevelopment project in St. Louis that has relied heavily on access to the distressed areas tax credit. They said the project was revitalizing long-abandoned parts of the city and wouldn't have started without the credits.
"We are talking about an area in north St. Louis that has been abandoned for 75 years," said John Cross of Metropolitan Organizations Strengthening and Empowering Society in St Louis. "Now we have an opportunity to transform this area and make it a place that is deserving of the people that live there."