Gov. Nathan Deal yesterday signed into law the Georgia Agribusiness and Rural Jobs Act which, as he notes, opens the door for small businesses in rural Georgia to have access to growth capital. In a nutshell, the goal is to make $60 million in tax credits available to companies willing to infuse $100 million of capital in designated rural counties for job creation in agribusiness, manufacturing and other industries.
Its author, state Rep. Jason Shaw, R-Lakeland, says the legislation “is the most tightly crafted bill of its kind in the country.”
Fees are strictly capped so that the available funds go to the intended recipient, Shaw says, and not to fund managers. Where returns are realized on the invested sums, the state can share in those profits. Moreover, where the fund managers get out of line or the job creation targets are not met, the state– through the Department of Community Affairs– can recoup the tax credits.
Those entities providing the funding are required to hold a Rural Small Business Investment Company or Small Business Investment Company license. Furthermore, the business must demonstrate that the benefit to Georgia’s general fund must exceed the cost of the tax credits sought.
Critics call it a scheme that somehow allows a free ride where no jobs are created. Shaw heatedly disputes that. He notes that the investment fund doesn’t reap an inordinate amount in fees and the invested money must stay in the state.
In fact, the governor emphasized that rural Georgia needs this incentive, just as qualified rural hospitals need a stepped-up tax credit to encourage contributions to these hospitals.
