Venture Capital Bill Sent before Bellmon / to Create $30 Million Fund

Article excerpt

A $30 million venture capital fund will be formed in the state if Gov. Henry Bellmon signs into law a bill passed by the Oklahoma Legislature in the last hours of the 1988 session.

House Bill 1907 contains provisions making changes in a law passed two years ago which provides a 20 percent income tax credit for venture capital companies in the state.

According to Rep. Don McCorkell, D-Tulsa, no company had taken advantage of the credit since it was placed on the books in 1986.

The provisions reduce the amount of investment in Oklahoma business ventures from the current 662/3 percent to 55 percent and to increase the amount of time to make the investment from three years to five years in order for venture capital firms to take advantage of the tax credit.

If the bill is signed, said Attorney Bruce Day, former administrator of the Oklahoma Securities Commission, Merrill Lynch Pierce Fenner & Smith Inc. will establish a venture capital operation in Oklahoma.

If Bellmon does not sign House Bill 1907, Day said, Merrill Lynch has indicated it would establish its venture capital operation in Florida or another state.

Day said the connections Quinton Ellis, resident vice president and branch manager of Merrill Lynch in Oklahoma City, had with Merrill Lynch's New York offices resulted in an interest by the investment firm in establishing a venture capital operation in Oklahoma.

The venture capital company, which is slated to be named Oklahoma Venture Partners, would be a limited partnership with Merrill Lynch Venture Partners in New York as managing general partner.

This would be Merrill Lynch's first "state specific" venture capital enterprise, Day said, meaning that its operation was contingent on the availability of the state tax credit.

Bellmon has 15 days in which to sign or veto House Bill 1907.

"If he signs it, the SEC (Securities Exchange Commission) will be notified immediately," said Day, so a public offering will be held to raise the $30 million to be made available as venture capital. …