Summary of the Perfected Version of the Bill

HCS HB 1245 -- TAX CREDITS AND MISSOURI QUALITY JOBS ACT (Lauer)

COMMITTEE OF ORIGIN: Committee on Economic Development

This substitute authorizes an income tax credit for the eligible

costs of bringing a sporting event to Missouri. In order to

receive the tax credit, the Department of Economic Development

must certify the applicant's sporting event support contract

between the applicant and a site selection organization. These

organizations are specified in the substitute and include, but

are not limited to, the National Collegiate Athletic Association,

the United States Olympic Committee, and the United States Golf

Association.

The applicant must submit documentation of the eligible costs

within 30 days of the conclusion of the sporting event. Within

seven days of the conclusion of the sporting event, the

department, in consultation with the Director of the Department

of Revenue, must determine the total number of tickets sold at

face value for the sporting event. Within 60 days of receiving

the documentation from the applicant of the eligible costs, the

department must issue a refundable tax credit equal to 100% of

the eligible costs or an amount equal to $5 multiplied by the

average number of paid participants multiplied by the number of

days from the first to the last day of the event, whichever is

less. The tax credit may be transferred, sold, or assigned. No

more than $10 million of these tax credits can be issued by the

department in any fiscal year. In any fiscal year, no more than

$8 million in tax credits can be available to all applicants that

submit support contracts for sporting events to be held in St.

Louis City or Jackson County.

The department can only certify a support contract for a sporting

event in which the location is selected after August 28, 2012.

The department cannot certify a contract after August 28, 2018,

but can certify a contract before that date for a sporting event

that will be held after that date.

The substitute authorizes an income tax credit equal to 50% of

any eligible donation to a certified sponsor or local organizing

committee. The credit is not refundable but can be carried

forward up to four years or sold. No more than $10 million of

these tax credits can be issued by the department in any fiscal

year.

The substitute specifies that no finding of blight under Chapter

135, RSMo, can be used to meet the conditions for blight under

any other state statute.

The substitute changes the job retention provisions in the Missouri Quality Jobs Act by reducing from $70 million to $50

million, the amount of investment that a qualified company must

make and increases, from two years to five years, the time period

for making the investment and extending the date that a tax

credit can be issued for a project if it has been approved by the

department from August 30, 2013, to August 30, 2018.

Economic incentives are authorized for job retention projects

under the act for a qualified company that meets certain

requirements if the Department of Economic Development determines

that there is a significant probability that the qualified

company would relocate to another state in the absence of the

benefits. The economic incentives can be in the form of

retaining taxes otherwise withheld from full-time jobs or a tax

credit. Prior to the award of any benefits, the department

director must notify the President Pro Tem of the Senate and the

Speaker of the House of Representatives of the amount of the

award and other specified information unless the disclosure is

otherwise protected by law.

In order to receive withholding tax retention benefits, the

qualified company must retain at least 125 full-time employees

for a period of 10 years from approval of the notice of intent,

make a new capital investment at the project facility within

three years from approval of the notice of intent in an amount

equal to 50% of the total withholding tax retention benefits, and

enter into a written agreement with the department containing

detailed performance requirements and repayment penalties in the

event of nonperformance. If a qualified company meets these

requirements, it may be authorized to retain up to 100% of the

withholding taxes from full-time jobs for a period of 10 years if

the average wage of the retained jobs equals or exceeds 90% of

the county average wage. The aggregate amount of retained

withholding taxes authorized is limited to $6 million for each

fiscal year beginning on or after July 1, 2012. The substitute

specifies the factors that the department must consider in

awarding withholding tax retention benefits.

Beginning January 1, 2013, but ending on or before December 31,

2014, in lieu of the withholding tax retention benefits, the

department may authorize a qualified company a one-time tax

credit in an amount up to 7% of new payroll from the new jobs

created over a five-year period or up to 9% if the qualified

company is in a targeted industry as identified by the department

by rule following a specified process. The qualified company

must also enter into a written agreement with the department

covering the applicable project period which contains detailed

performance requirements; the time period during which the tax

credits will be issued; repayment penalties, including recapture

of the tax credits, in the event of nonperformance; and other specified information. The total credits authorized cannot

exceed $10 million annually.

The Missouri Jobs for Education Program is established to provide

a tuition credit for certain business owners or companies who

create new full-time jobs in Missouri that can be used by the

business owner or a person of his or her choice toward tuition at

any public institution of higher learning in the state. A

qualifying business owner or company will receive one credit

toward tuition for every qualifying job created. The credit must

be used within 10 years of the date it is awarded or it will be

deposited into general revenue. The Department of Economic

Development must administer the program which must be funded from

employee withholding taxes. The department must track employer

contributions and ensure that the credit toward tuition does not

exceed the amount that has been deposited by the employer.

The provisions of the substitute regarding the tax credit to a

sponsor or committee for a sporting event expire six years after

the effective date and the provisions of the substitute regarding

the Missouri Jobs for Education Program expire four years after

the effective date.

FISCAL NOTE: Estimated Net Cost on General Revenue Fund of

Unknown greater than $10,060,447 in FY 2013, Unknown greater than

$10,065,917 in FY 2014, and Unknown greater than $10,066,634 in

FY 2015. No impact on Other State Funds in FY 2013, FY 2014, and

FY 2015.

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