HCS SB 392 -- TAX INCENTIVES FOR ECONOMIC DEVELOPMENT

CO-SPONSORS:  Kenney, DePasco (Rizzo)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Commerce
and Economic Development by a vote of 21 to 2.

This substitute:

(1)  Allows the residents of Newton County to impose a
hotel/motel sales tax in addition to any transient guest tax
currently in effect;

(2)  Allows property owners in the City of Springfield to have
their property removed from a Community Improvement District, if
certain requirements are met;

(3)  Allows a municipality to acquire property as part of a
redevelopment project;

(4)  Expands the definition of a "revenue-producing enterprise"
to include hotel and motel activities in the City of Salem;

(5)  Allows the City of Springfield to designate up to 3
satellite zones in certain areas of the city;

(6)  Designates the City of Sugar Creek as an enterprise zone;

(7)  Allows any employee of Harley-Davidson to be considered a
resident of an enterprise zone, even if the employee no longer
chooses to live in the zone, as long as the individual meets
certain requirements;

(8)  Allows any wholesale electricity generator in the City of
New Florence to receive new or expanded business tax credits,
the income tax refund associated with a new or expanded
business, and real property improvement exemptions;

(9)  Provides for up to $1 million of the small business tax
credit to be set aside for investment in businesses engaged in
pharmaceutical research and development.  If, by September 1 of
any year, this set-aside has not been used in its entirety, the
balance can be used for other capital tax credit programs;

(10)  Expands the definition of "eligible residence" to include
condominiums, entire apartment buildings, or single apartments
within an apartment building;

(11)  Expands the definition of "new residence" to include
vacant agricultural/horticultural property that is either within
or adjacent to a central business district located in Christian
or Greene counties;

(12)  Expands the definition of "project" to include the new
construction, rehabilitation, or substantial rehabilitation of
multiple residences, including apartment buildings or several
individual structures;

(13)  Defines the new term "central business district";

(14)  Increase from 15% to 20% the amount of the neighborhood
preservation tax credit an individual can receive for eligible
costs associated with a new residence located in a distressed
community or qualifying census block group;

(15)  Decreases the maximum neighborhood preservation tax credit
for a qualifying project from $3 million to $1.5 million, under
certain circumstances;

(16)  Requires the Director of the Department of Economic
Development to reallocate 70% of any remaining tax credits for
"eligible residence" projects to "qualifying residence"
projects, or vice versa, if, by October 1 of any calendar year,
the tax credits for one of the 2 project areas have not been
allocated to any finally approved applications.  The maximum
amount of reallocated tax credits will not exceed $500,000 for
any project;

(17)  Allows one application for a neighborhood preservation tax
credit to be submitted when the project involves the new
construction or rehabilitation of multiple residences.  A tax
credit certificate will be issued upon final approval of the
application and after proving the substantial completion of the
construction for each individual residence, instead of delaying
issuance of a tax credit until the entire project is
substantially completed;

(18)  Changes the term "certified capital" to "certified capital
investment" and expands the definition;

(19)  Defines the new term, "qualified debt instrument";

(20)  Expands the definition of "qualified distribution";

(21)  Expands the definition of "qualified investment";

(22)  Defines a new term, "qualified Missouri agricultural
business";

(23)  Expands the definition of a "qualified Missouri business";

(24)  Sets the aggregate amount of certified capital for which
earned and vested credits against state premium tax liability
are allowed for calendar year 2002 at an amount which would
entitle all Missouri certified capital company investors to take
aggregate credits of up to $4 million annually;

(25)  States that the cumulative certified capital company tax
credits will not exceed $180 million;

(26)  Delineates the requirements for a capital company to be
certified;

(27)  Explains allowable investments for certified capital that
is not required to be placed in qualified investments or that
has been placed in qualified investments and can now be received
by the certified capital company;

(28)  Explains the penalties which would apply in the event that
a business in which a qualified investment has been made fails
to comply with its agreement to retain its headquarters in
Missouri or a distressed community;

(29)  Requires all certified capital companies to submit a
report to the department;

(30)  Allows the department to audit the records of certified
capital companies, certified investors, and qualified Missouri
businesses that received qualified investments;

(31)  Requires the department to provide the Governor, the
Speaker of the House of Representatives, and the President Pro
Tempore of the Senate a report on the capital company tax credit
program;

(32)  Expands the definition of a "distressed community" to
include areas within metropolitan statistical areas that are
designated as either a federal empowerment zone, federal
enhanced enterprise community, or state enterprise zones
designated prior to January 1, 1986.  The new definition does
not include the expansion of state enterprise zones done after
March 16, 1988;

(33)  Authorizes operators of self-service storage facilities to
impose reasonable late fees for each month an occupant does not
pay rent when due, as long as the late fee is specified in the
rental agreement.  A reasonable late fee is defined as the
greater of $20 or 20% of the monthly rental amount;

(34)  Reduces the limit on tax credits relating to the Family
Development Account Program from $4 million to no more than $2
million per year; and

(35)  Reduces the limit on tax credits relating to the
Individual Training Account Program from $6 million to no more
than $1 million annually.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$492,000 to Unknown in FY 2002, FY 2003, and FY 2004.

PROPONENTS:  Supporters say that the bill will benefit employees
of Harley-Davidson who are also residents of the enterprise zone
because it will allow them to continue working for
Harley-Davidson even if they choose to no longer live in the
enterprise zone.

Testifying for the bill were Senators Kenney and DePasco;
Harley-Davidson; and Department of Economic Development.

OPPONENTS:  There was no opposition voiced to the committee.

Alice Hurley, Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:47 am