This week, the Tennessee General Assembly is expected to review an amendment to the law governing the state's $120 million TNInvestco program that would make a slate of changes to the small business investment initiative.

The most publicized of those changes is a $40 million expansion of the program to fund two venture capital groups in addition to the six TNInvestcos chosen by the state in November. (Solidus, an investor in NashvillePost.com parent SouthComm, is one of those firms.) But according to a draft document recently circulated by Tennessee Department of Revenue Commissioner Reagan Farr, available here, the Tennessee Small Business Investment Company Credit Act may be altered in other ways.

For one, it defines parameters for TNInvestcos to fund out-of-state companies. Non-Tennessee firms would be eligible for TNInvestco dollars if they agree to move their headquarters, main business operations and at least 60 percent of their employees to Tennessee within a year, while meeting the rest of the program's criteria. If the company doesn’t relocate within the required timeframe, the TNInvestco would have to reimburse the state out of its own pocket.

"We’d always envisioned getting entrepreneurs and young companies to locate here as part of this program, but we didn’t have a good sense of the best way to do that,” Farr told NashvillePost.com on Monday. Now that the program has been operational for a few months, and fund managers are actively considering investment opportunities, the state has a "much better feel or how that needs to be set up," he said.

As of Monday evening, the amendment's language had not been finalized, so there may be some changes, but Farr said the concepts in the draft should remain the same.

Another of those concepts would allow TNInvestco fund managers to make other investments — from venture capital funds they run separately — into a business that receives TNInvestco dollars. Farr explained that the move will allow fund mangers to leverage the TNInvestco funds for even greater investments in seed and early-stage companies so long as the TNInvestco "continues to fulfill its fiduciary duty to the program."

Also of note are provisions that would designate some TNInvestco documents as "tax information," making them confidential. The changes would protect the proprietary information submitted by TNInvestco managers when applying to participate in the program. This would include numbers on their current investments and the returns on the funds they manage, as well as the exact dollar amounts paid by each insurance company when they purchase the tax credits allocated to the TNInvestcos.

Farr said the amendment would not impact the documents that are subject to ongoing litigation between the state and venture capitalist Larry Coleman, who recently appealed a Chancery Court decision denying his public-records request for access to some of the program’s documents. Farr said the state has an Attorney General opinion designating TNInvestco applicant documents as confidential tax information, but because the Chancery Court said some the documents did not qualify as tax information, "we thought it was very important to go ahead and statutorily confirm what the AG’s office had already said. That gives comfort to participants even three or four years from now."

Of course, once the legislature gets its hands on the amendment, its substance could change. Rumored among the alterations is be the program’s expansion beyond the additional $40 million sought by the state.

Sen. Doug Overbey, a sponsor of the TNInvestco legislation, said that increase is possible.

"It wouldn’t surprise me at all if, once we start moving the bill, if some of my colleagues didn’t think it needed to be increased even more," Overbey said.