Morrison proposes economic development measure
Helena - A bill under consideration by the Senate Business and Labor Committee Thursday would make it easier for new and existing Montana-based businesses to raise capital.
SB125, a proposal by State Auditor John Morrison, allows Montana-based businesses to sell securities to up to 35 people without having to register the securities with the Montana Securities Department in the State Auditor's Office. They could make 10 more offers than they are allowed under current law. Only Montana-based businesses could take advantage of this exemption.
The bill, sponsored by Sen. Jon Tester of Big Sandy, will be heard by the senate committee at 9 a.m. Jan. 9 in Room 422 of the State Capitol.
"Capital formation can be an essential component of a company's success," said Morrison, Montana's Securities Commissioner. "By revising these regulations we will encourage economic development across the state."
The bill reduces costs for Montana-based businesses selling securities, such as attorney fees, accountant fees, regulatory fees and printing expenses.
Montana-based businesses would be allowed to raise an unlimited amount of capital under this exemption, but they would be limited to making 35 offers.
Montana companies would still be required to comply with Montana's anti-fraud statutes and provide full disclosure to individuals when making offers.
The bill prevents salespeople from receiving a commission under this exemption, eliminating the profit-making motive.
"Our primary goal is to assist Montana companies in raising capital," Morrison said.