HCS SB 563 -- TAXATION SPONSOR: Gibbons (Kennedy) COMMITTEE ACTION: Voted "do pass" by the Committee on Ways and Means by a vote of 14 to 0. This substitute requires the signature of any applicant for a tax refund before a refund can be made by the Director of the Department of Revenue. The substitute also makes various changes to economic development programs relating to distressed communities and small business investment tax credits. The substitute: (1) Changes the definition of a "community development corporation" to stress development of projects that benefit low-income individuals and communities; (2) Lowers the investment requirement of principal owners of Missouri small businesses eligible for investment from 50% of the business to 20% of the business; (3) Eliminates the designation of a "target area" for purposes of identifying areas of poverty by the Department of Social Services; (4) Reduces the statewide limit on all tax credits for investments in a small business per year from $13 million to $6 million and reduces the minimum amount within distressed communities from $4 million to $3 million; (5) Increases the maximum percentage of investment ownership allowed in a small business to qualify for a tax credit from 50% to 80%; (6) Reduces the number of years required for investment in a small business from 5 years to 3 years and excludes any sale, change of control, or the going public of a business from the minimum period of time for investment for purposes of the small business investment tax credit program; (7) Reduces the percentage of employees required to be located at a business contained within distressed communities from 75% to 60% and increases the maximum number of employees at a business contained within a distressed community from 100 to 150 to qualify for the distressed communities tax credit program; (8) Reduces the total annual statewide cap for tax credits for distressed communities from $10 million to $7.5 million; (9) Allows the leasing of certain technology equipment to qualify as an expense for purposes of obtaining a tax credit and increases the maximum tax credit for this equipment expense from $75,000 to $150,000; (10) Expands the availability of follow-up capital to include businesses which have previously received follow-up capital within the last 3 years for purposes of tax credits for contributions to innovation centers; (11) Increases the allowable tax credit percentage of the amount of qualified contribution to a qualified fund for purposes of tax credits for contributions to innovation centers from 50% to 75% and reduces the aggregate maximum statewide credits for contributions to innovation centers from $9 million to $5 million annually; (12) Allows any unused credits for these tax credit programs from the previous year to be added to any statewide caps for these programs in future years; (13) Requires the Department of Economic Development to pursue a revocation of the tax credits only from the original applicant for the tax credit; (14) Allows a demolition tax credit for up to 100% of the cost if the demolition is part of a redevelopment plan approved by the Director of the Department of Economic Development and by the local government with jurisdiction in the area in which the project is located and with the approval of the Department of Natural Resources; (15) Expands the definition of allowable cost under Brownfield Remediation Projects to include the demolition and reconstruction of any building or structure even if these actions are not required for the clean up of contaminated property. However, these demolition and reconstruction activities must take place on the site of an abandoned or underutilized property that has been approved for financial assistance. The activities must be included in a redevelopment plan that has been approved by the director and the local government. The definition of "eligible project" is expanded to include any property immediately adjacent to any abandoned or underutilized property; (16) Allows transfer of up to 70% of any unused annual statewide tax credit caps between qualifying and eligible residences under the Rebuilding Communities and Neighborhood Preservation Program; and (17) Repeals the Missouri Individual Training Account Program Act. The substitute contains an emergency clause. FISCAL NOTE: Not available at time of printing. PROPONENTS: Supporters say that the bill will remove the requirement for a taxpayer to take an oath and acquire a notary stamp when claiming certain tax refunds. Testifying for the bill were Senator Gibbons; and Department of Revenue. OPPONENTS: There was no opposition voiced to the committee. Bill Tucker, Assistant Director of ResearchCopyright (c) Missouri House of Representatives