Two Democrats from Ohio’s House of Representatives have reintroduced a bill that would expand the size of a state-backed venture capital program.
House Bill No. 43 would increase by $170 million the value of tax credits that can be issued by the Ohio Venture Capital Authority (OVCA) to $550 million. A similar proposal passed the House by a vote of 98-0 in the state’s last legislative session, but didn’t make it to a vote in the Senate.
The OVCA expansion bill is a high priority for the state’s biomedical industry. The OVCA program makes it easier to recruit out-of-state venture firms to set up offices in Ohio, said Baiju Shah, president of Cleveland-based biomedical advocacy group BioEnterprise. Shah mentioned the OVCA expansion proposal earlier this month when asked about the industry’s top state legislative priorities in 2011.
The OVCA does not use state tax dollars or general revenue funds, and the bonds issued to back the program do not count toward the state’s debt ceiling. The fund is capitalized by the issuance of bonds supported primarily by the investments of the fund and secondarily by contingent tax credits, according to a statement from Rep. Jay Goyal, D-Mansfield.
The tax credits are used only to offset potential losses incurred by investors in the Ohio Capital Fund, a “fund of funds” that invests state money alongside private funds.
The OVCA was created in 2003 with the goal of increasing the amount of private investment dollars available to early-stage Ohio companies. The OVCA is overseen by the Ohio Department of Development, an agency whose future has been clouded by Gov. John Kasich’s plan to privatize some of the state’s economic development work.
Rep. Sandra Williams, D-Cleveland, is the bill’s other sponsor. The bill is expected to be assigned to a committee this week, according to the statement.