Senate passes Conley legislation to create Rhode Island Small Business Development Fund

State House — The State Senate today passed legislation introduced by Sen. William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket) that would create the Rhode Island Small Business Development Fund.

The bill (2019-S 0055) would establish a fund designed to encourage the formation of private capital investment in small business by federally licensed investment companies.

“This gives smaller businesses the access to capital that they need to grow,” said Senator Conley, who serves as chairman of the Senate Finance Committee. “It provides for the flow of capital investment into small businesses identified as critical to our state’s future and creates jobs. In fact, an impact assessment demonstrates that for every 100 jobs created in the targeted industries, another 113 indirect and individual jobs are created. Further, every 100 jobs created or retained in the targeted sectors will support nearly $21 million in Gross State Product (GSP). This is a six-year program. After the first three years, those companies providing the investments would receive tax credits applicable against the Rhode Island insurance premium tax as long as they meet certain criteria, such as meeting and maintaining investment requirements for the life of the program.”

Investments would be designated for targeted growth industries for the state, including clean energy, biomedical innovations, life sciences, information technology, cyber security, defenses maritime, and others would be required to be diversified — no one small business would receive more than $4 million or 20 percent of a fund’s investment authority and the business must have a strategy for reaching out to and investing in minority business enterprises.

“Too often we see Rhode Island small businesses poised for growth only to leave the state and move to other areas where they can acquire the capital they need,” said Senator Conley.

The measure, which is cosponsored by Senators Sandra Cano (D-Dist. 8, Pawtucket), Louis P. DiPalma (D-Dist. 12, Middletown, Newport, Tiverton, Little Compton), Walter S. Felag Jr. (D-Dist. 10, Bristol, Tiverton, Warren) and Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln), now heads to the House of Representatives where similar legislation (2019-H 5216) has been introduced by Rep. Joseph J. Solomon Jr. (D-Dist. 22, Warwick).