CCS HCS SS SB 343 -- JOB DEVELOPMENT PROGRAMS

This bill changes the laws regarding job development programs
administered by the Department of Economic Development.

TAX INCREMENT FINANCING

The bill:

(1)  Specifies that at no time may the annual amount approved for
disbursement from the Missouri Supplemental Tax Increment
Financing (TIF) Fund exceed $32 million.  Currently, the
aggregate appropriation cannot exceed $15 million (Section
99.845, RSMo); and

(2)  Removes the requirement that all personnel and other costs
incurred by the department for the administration and operation
of the Missouri Supplemental TIF Fund must be paid from general
revenue and reimbursed by the TIF projects' developers.  However,
the state may ask that the reasonably incurred expenses of the
departments of Economic Development and Revenue for the
administration of the TIF projects be reimbursed from the
revenues deposited into the Missouri Supplemental TIF Fund
(Section 99.845).

MISSOURI DOWNTOWN AND RURAL ECONOMIC STIMULUS ACT

The annual amount approved for disbursement from the State
Supplemental Downtown Development Fund is reduced from $150
million to $108 million (Section 99.960).

BUSINESS USE INCENTIVES FOR LARGE-SCALE DEVELOPMENT PROGRAM
(BUILD)

The bill:

(1)  Authorizes certain development agencies or a corporation,
limited liability company, or partnership that is formed on
behalf of the development agency to act as an eligible industry
for purposes of the Business Use Incentives for Large-Scale
Development (BUILD) Program (Section 100.710); and

(2)  Requires that $950,000 of the $15 million in tax credits
authorized annually for BUILD be reserved for an approved project
in the City of Kansas City (Section 100.850).

MISSOURI QUALITY JOBS PROGRAM

The bill:

(1)  Establishes the Missouri Quality Jobs Program to provide
incentives to businesses in return for the new tax revenues and
other economic stimulus that will be produced by the new jobs
created as a result of the program (Sections 620.1875 -
620.1890);

(2)  Prohibits any qualified company that receives benefits
through the program from receiving tax credits or exemptions for
the same new jobs at the project facility through new or expanded
business facilities, enterprise zones, relocating a business to a
distressed community, and rural empowerment zones (Section
620.1881);

(3)  Defines the following four project types (Section 620.1881):

(a)  Small and expanding business projects which create at least
20 new jobs in two years if located in a rural area or 40 new
jobs in two years if located elsewhere.  In either case, the
business cannot have more than 100 total employees.  Qualified
companies may retain for three years an amount equal to the
withholding taxes from the new jobs if the average wage of the
new payroll equals or exceeds the county's average wage.  If the
average wage of the new payroll is at least 120% of the county's
average wage, the amount may be retained for five years;

(b)  Technology business projects which create at least 10 new
jobs within two years.  Seventy-five percent of the jobs must be
directly involved with the operations of the technology company.
Qualified companies may retain for five years an amount equal to
a maximum of 5% of the new payroll from the withholding taxes of
the new jobs if the average wage of the new payroll equals or
exceeds the county's average wage.  An additional 0.5% of new
payroll may be retained if the average wage of the new payroll
exceeds 120% of the county's average wage in any year.  If the
average wage of the new payroll exceeds 140% of the county's
average wage in any year, an additional 0.5% may be retained.
The credit is issued for any difference between the benefit
allowed and the withholding tax retained in the event that the
withholding tax is not sufficient to provide the entire benefit
due to the qualified company.  The maximum amount of tax credits
that may be issued in a calendar year is $500,000, and the
credits cannot be carried forward but may be sold.  A refund will
be issued to the qualified company if the credits exceed the
company's tax liability;

(c)  High-impact projects which create at least 100 new jobs
within two years.  Qualified companies may retain an amount from
the withholding taxes of the new jobs equal to 3% of new payroll
for a period of five years if the average wage of the new payroll
equals or exceeds the county's average wage.  A qualified company
may retain 3.5% of new payroll if the average wage of the new
payroll in any year exceeds 120% of the county's average wage or
4% of the new payroll if the average wage in any year exceeds
140% of the county's average wage.  An additional 1% of new
payroll may be added if local incentives are between 10% and 24%
of the new direct local revenues; 2% of new payroll may be added
if the local incentives are between 25% and 49%; or 3% of new
payroll may be added if the local incentives are 50% or more of
the new direct revenue.  The department will issue a refundable
tax credit for any difference between the benefit allowed and the
withholding tax retained in the event that the withholding tax is
not sufficient to provide the entire benefit due to the qualified
company.  The maximum amount of tax credits that may be issued in
a calendar year is $750,000.  This amount may be increased to $1
million if the action is proposed by the department and approved
by the Quality Jobs Advisory Task Force.  This tax credit cannot
be carried forward but may be sold.  A refund will be issued to
the qualified company if the credits exceed the company's tax
liability; and

(d)  Job retention projects in which the qualified company has
employed at least 1,000 full-time, year-round employees during
the two years prior to the year in which the application for the
program is made.  The average wage for these employees must be
greater than the county's average wage and the same level of
full-time, year-round employees must be retained after the
application is made.  The qualified company must make a $70
million investment or a $30 million investment while maintaining
an annual payroll of at least $70 million.  In either case, the
investment must be made within two years of making an application
for the program.  Local taxing entities must provide local
incentives of at least 50% of the new local revenues created by
the project for 10 years.  The tax credit may be up to 50% of the
withholding taxes generated by the full-time, year-round
employees at the project facility for five years.  The maximum
amount of tax credits that may be issued in a calendar year is
$750,000.  This amount can be increased to $1 million if the
action is proposed by the department and approved by the Quality
Jobs Advisory Task Force.  The total amount of tax credits issued
for all projects cannot exceed $3 million annually, and no tax
credits will be issued after August 30, 2007.  This tax credit
cannot be carried forward but may be sold.  A refund will be
issued to the qualified company if the credits exceed the
company's tax liability;

(4)  Requires qualified companies to provide an annual report to
the department documenting the basis for the benefits of this
program (Section 620.1881);

(5)  Stipulates that the maximum amount of tax credits that may
be issued in a calendar year for the entire program is $12
million.  The bill reduces the annual amount of tax credits that
may be authorized for relocating a business to a distressed
community from $10 million to $8 million and specifies that the
remaining $2 million must be transferred to the program.  There
is no limit on the amount of withholding taxes that may be
retained by approved companies under the program (Section
620.1881);

(6)  Requires that employees of qualified companies receive full
credit for the amount of taxes withheld (Section 620.1881);

(7)  Establishes the Quality Jobs Advisory Task Force consisting
of the chairperson of the Senate committee on economic
development, the chairperson of the House committee on economic
development, a member of the House committee on economic
development appointed by the Minority Leader of the House of
Representatives, a member of the Senate committee on economic
development appointed by the Minority Leader of the Senate, the
Director of the Department of Economic Development, and two
members appointed by the Governor (Section 620.1887);

(8)  Requires the department to submit an annual report to the
General Assembly by March 1 of each year.  The bill specifies the
requirements of the report (Section 620.1890);

(9)  Authorizes the department to charge the recipient of any tax
credit a fee in an amount of up to 2.5% of the tax credits
issued.  The fee must be paid when the tax credits are issued;
however, no fee will be charged for youth opportunities and
violence prevention, the Family Development Account, or
neighborhood assistance tax credits (Section 620.1900); and

(10)  Creates the Economic Development Advancement Fund for the
deposit of all fees for tax credits.  At least 50% of the moneys
in the fund will be appropriated for marketing, technical
assistance, training, contracts for specialized economic
development services, and new initiatives and pilot programming
to address economic trends.  The remaining moneys may be
appropriated for staffing, operating expenses, and accountability
functions of the department (Section 620.1900).

LOCAL OPTION SALES TAX

Any city or county is authorized to levy a sales tax of up to
0.5%, upon voter approval.  This tax must be in lieu of the
economic development sales tax allowed in Sections 67.1300 and
67.1303.  Revenue collected from this tax will be deposited by
the Director of the Department of Revenue into the city's or
county's local option economic development sales tax trust fund.
These funds will not be considered state money and will be
distributed monthly to the city or county which levied the tax.
The bill specifies how the funds are to be spent and requires
that the city or county establish an economic development tax
board.  Funds cannot be used for retail development except for
the redevelopment of downtown and historic districts.  The
Department of Economic Development must submit to the Joint
Committee on Economic Development by March 1 of each year a
report on the status of each project using this sales tax.  The
bill specifies what must be included in this report (Section
67.1305).

ENTERPRISE ZONES - RETAINED BUSINESS FACILITIES TAX CREDIT

The bill extends the period of time for the approval of an
essential industry retention project for the purposes of the
retained business facilities tax credit from December 31, 2005,
to December 31, 2007 (Section 1).

BUSINESSES IN A DISTRESSED COMMUNITY

The bill expands the term "computer programming corporation" to
include Internet, web hosting, and other information technology
and the term "telecommunications corporation" to include
wireless, wired, or other telecommunications corporations
allowing these corporations to receive a tax credit for investing
in or relocating a business to a distressed community (Section
135.535).

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm