An Act concerning the Kansas technology enterprise corporation; amending K.S.A. 1995 Supp. 74-8105 and 74-8401 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 1995 Supp. 74-8105 is hereby amended to read as follows: 74-8105. (a) The president shall be the chief executive officer of the corporation and shall serve at the pleasure of the board. The presi- dent's salary shall be set by the board of directors. The president shall be in the unclassified service under the Kansas civil service act. The board of directors may negotiate and enter into an employment agreement with the individual selected as president of the corporation which may provide for such compensation and such provisions for allowances, benefits and expenses as may be included in such agreement. The board of directors is authorized to make all payments and payroll deductions as may be required under such agreement. The president shall direct and supervise administrative affairs and the general management of the corporation.
(b) The president:
(1) May employ and terminate such other officers and employees as designated by the board of directors. Any officer or employee of the cor- poration who receives a salary allocated from state funds shall receive no other compensation including, but not limited to, salaries, bonuses, fees or incentives for performance of any duties on behalf of any entity which is a subsidiary of or is otherwise related to the corporation or is a business in which the corporation or any entity related to the corporation has invested state funds. The president's employment contract, including any renewal of an existing contract, shall be made available to the senate commerce committee and the house economic development committee, or if the legislature is not in session, the joint committee on economic devel- opment, prior to execution of the contract. Such officers and employees shall be in the unclassified service under the Kansas civil service act;
(2) shall attend board meetings;
(3) shall appoint a secretary to keep a record of all proceedings and maintain and be custodian of all financial and operational records, doc- uments and papers filed with the corporation and of the minute book of the corporation; and
(4) before accepting any applications as provided for under this act, shall prepare a business plan which shall include the corporate analysis of funding levels of programs in other states that are shown in the report required in subsection (b) of K.S.A. 74-8111 and amendments thereto and the threshold funding levels specified in subsection (c) of K.S.A. 74- 8111 and amendments thereto. Upon approval of the business plan by the corporation board, the plan shall be presented to the standing com- mittee on commerce of the senate and the standing committee on eco- nomic development of the house of representatives or the joint legislative committee on economic development for review and evaluation.
Sec. 2. K.S.A. 74-8401 is hereby amended to read as follows: 74- 8401. (a) There shall be allowed as a credit against the tax imposed by the Kansas income tax act on the Kansas taxable income of a taxpayer and against the tax imposed by K.S.A. 40-252 and amendments thereto on insurance companies for cash investment in a certified local seed capital pool an amount equal to 25% of such taxpayer's cash investment in any such pool in the taxable year in which such investment is made and the taxable years following such taxable year until the total amount of the credit is used. The amount by which that portion of the credit allowed by this section exceeds the taxpayer's liability in any one taxable year may be carried forward until the total amount of the credit is used. If the taxpayer is a corporation having an election in effect under subchapter S of the federal internal revenue code or a partnership, the credit provided by this section shall be claimed by the shareholders of such corporation or the partners of such partnership in the same manner as such share- holders or partners account for their proportionate shares of the income or loss of the corporation or partnership.
(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 De- cember 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 taxable years prior to January 1, 2000, in the technology-based venture-capital company authorized pursuant to K.S.A. 74-8316, and amendments thereto, not to exceed the $10,000,000 reserved under this subsection.
(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 busi- nesses 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 individ- ual, any partnership, association or corporation domiciled in Kansas, or any corporation, even if a wholly owned subsidiary of a foreign corpora- tion, 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 in- vestment 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.
Sec. 3. K.S.A. 1995 Supp. 74-8105 and 74-8401 are hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its publication in the statute book.
Approved May 11, 1996.