HCS HB 1590 -- AGRICULTURAL INCENTIVES AND PROGRAMS

SPONSOR:  Munzlinger

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Agri-Business by a vote of 9 to 1.

This substitute changes the laws regarding the administration of
agricultural incentives and programs.

MANAGED ENVIRONMENT LIVESTOCK OPERATION TAX CREDITS

Beginning January 1, 2008, the substitute authorizes a tax credit
to owners of livestock operations for the eligible costs of
implementing odor abatement best management practices and systems
as administered through the Missouri Agricultural and Small
Business Development Authority.  The maximum tax credit amount
for implementing a system necessary to achieve managed
environment livestock operation (MELO) accreditation and/or
improving basic infrastructure to increase the setback from the
property line will be the lessor of 50% of the eligible expenses
or $50,000.  The maximum tax credit amount for implementing a
system necessary to meet preferred environmental practices and/or
improving basic infrastructure to increase the setback from the
property line will be the lessor of 75% of the eligible expenses
or $75,000.  The yearly maximum amount of tax credits issued by
the authority for odor abatement will be $3 million.  The tax
credits may be carried back three years, carried forward five
years, transferred, or taken against the estimated quarterly tax
or quarterly taxes.

The authority is required to establish rules for tax credit
eligibility based on odor abatement impact, the owner's
prospective use and funding of proven technologies, and other
factors that the authority deems necessary.  Ninety percent of
the tax credits issued in any one year will go to livestock
operation owners for the implementation of best management
practices and systems necessary to achieve MELO accreditation.
Ten percent and any remaining MELO tax credits will be issued to
livestock operation owners for the implementation of preferred
environmental practices.  Any unissued tax credits will not carry
over to the succeeding year.  The authority will impose an
application fee of .25% of the tax credit amount issued.

TAX REPORTING REQUIREMENTS

The definition of "agricultural tax credits" as it relates to the
Missouri Agricultural and Small Business Development Authority is
revised to include family farm breeding livestock loan tax
credits and qualified beef tax credits and makes them subject to
the reporting requirements under the Tax Credit Accountability
Act of 2004.  The substitute also requires new generation
cooperatives to report under the act if the agricultural tax
credit is issued as a result of a producer member investing in
the new generation cooperative.

QUALIFIED BIOMASS

Beginning January 1, 2009, through December 31, 2019, Missouri
qualified fuel ethanol producers producing fuel ethanol from
qualified biomass will be eligible to receive grants from the
Department of Agriculture.  The aggregate amount of the grants is
not to exceed $10 million per year.

STATE AND LOCAL SALES AND USE TAX EXEMPTION FOR AGRICULTURAL
FENCING, FORESTRY EQUIPMENT, AND MOTOR FUEL

The substitute authorizes a state and local sales and use tax
exemption for fencing materials, forestry equipment, and motor
fuel used for agricultural purposes.

HAZARDOUS SUBSTANCES

The substitute specifies that when a hazardous substance release
occurs the person having control of the hazardous substance is
liable for the reasonable and necessary costs for the cleanup or
containment incurred by the political subdivision or volunteer
fire protection association providing the emergency services.  No
later than 60 days after completion of the hazardous substance
cleanup, the political subdivision or the emergency services
provider is required to furnish the liable person with an
itemized statement of all costs associated with the hazardous
substance release.  The statement of costs must include certain
explanations for why the costs were incurred.  A cleanup cost
statement may be appealed to the Director of the Department of
Natural Resources with the burden of proof on the political
subdivision or the emergency services provider.

NAME CHANGES

The substitute renames the Marketing Division within the
Department of Agriculture as the Agriculture Business Development
Division, the Marketing Development Fund as the Agriculture
Business Development Fund, the Missouri Agricultural Products
Marketing Development Fund as the AgriMissouri Fund, and the
Citizens' Advisory Commission for Marketing Missouri Agricultural
Products as the AgriMissouri Advisory Commission for Marketing
Missouri Agricultural Products.

NOXIOUS WEEDS

The substitute requires persons, corporations, the Highways and
Transportation Commission, state departments, state agencies,
county commissions, township boards, school boards, drainage
boards, governing bodies of incorporated cities, railroad
companies and other transportation companies, and persons
supervising state-owned lands to control the spread of and
eradicate by methods approved by the federal Environmental
Protection Agency spotted knapweed (Centaurea stoebe ssp.
Micranthos, including all subspecies), which are designated as
noxious and dangerous weeds to agriculture.

DAIRY COWS AND DAIRY OPERATIONS

Subject to appropriations, the Missouri Agricultural and Small
Business Development Authority must pay the first year of charged
interest payments on all linked deposit loans used for the
acquisition of dairy cows.  The authority is authorized to charge
a service fee, not to exceed $50, to defray the administrative
costs of processing a loan.

The authority is required to develop and implement dairy business
planning grants.  The aggregate amount of the grants will not
exceed $50,000; and no single grant can exceed $5,000.  An
application fee may be charged, not to exceed $50 per grant
application, to defray the administrative costs of administering
the grant.

The applicant's dairy operation must be located in Missouri and
at least 51% owned by Missouri residents.  The grant proceeds
must be used solely to contract with a dairy business planning
professional approved by the authority.  The authority is
required to establish rules on eligibility and award criteria
including improved profitability, modernization, and expansion of
the dairy operation.  The experience, education, and relevant
dairy experience of both the grant applicant and the dairy
business planning professional are required to be part of the
respective selection criteria.

AGRICULTURAL TAX CREDITS

The substitute requires that certain types of agricultural
production facilities be located in Missouri to qualify its
producer member for agricultural tax credits.

FAMILY FARM LIVESTOCK LOAN PROGRAM

The substitute increases from $150,000 to $300,000 the maximum
amount of tax credits that the Missouri Agricultural and Small
Business Development Authority is authorized to issue annually to
eligible lenders participating in the Family Farm Livestock Loan
Program.

LOAN GUARANTEES

The substitute requires the Missouri Agricultural and Small
Business Development Authority to provide assistance to
independent livestock and poultry family farm operations by
implementing a livestock feed and crop input loan guarantee
program to grant partial loan guarantees on loans for the
purchase of livestock feed and crop inputs to produce crops for
feeding livestock.

The Livestock Feed and Crop Input Loan Guarantee Fund is created
consisting of moneys appropriated by the General Assembly;
bequests from federal, private, or other sources; and investment
income on the fund.  The General Assembly may appropriate up to
$4 million to the fund.  Qualified independent livestock and
poultry family farm operations may borrow up to $40,000.  The
authority provides a 50% first-loss guarantee, on a declining
principal basis, to local lenders and will charge a one-time
participation fee of $50 on the loan.  A special loan guarantee
fee of up to 1% per annum of the outstanding principal of the
loan may be charged by the lender and paid to the authority.

AUTOMOTIVE LUBRICANTS AND PETROLEUM PRODUCTS

Automotive lubricants are required to meet the American Society
for Testing and Materials (ASTM) current standards.  If no ASTM
standard exists for certain fuels and petroleum-based products,
the Department of Agriculture may adopt other generally
recognized national consensus standards by rule.

The department is authorized to regulate the posting of prices at
gas stations and convenience stores for fuels, petroleum
products, and automotive lubricants.

Currently, the penalty for a first violation of the product
standards or labeling and advertisement requirements for certain
fuels and petroleum products is not to exceed a written
reprimand.

The substitute also:

(1)  Requires dealers, distributors, producers, or compounders of
certain fuels and oils to immediately provide a sample upon a
department request;

(2)  Allows the department director to have access during
business hours to all places where automotive lubricants are
marketed;

(3)  Prohibits the storing or selling of automotive lubricants in
a deceptive manner;

(4)  Allows the directors of the departments of Agriculture and
Revenue, upon request, to have access to shipping records of
automotive lubricants as kept by common carriers and marketers of
fuels or petroleum products; and

(5)  Increases the maximum inspection fee on gasoline,
gasoline-alcohol blends, kerosene, diesel fuel, heating oil,
aviation turbine fuel, and other motor fuels from 2.5 cents per
barrel to three cents per barrel.

The provisions regarding the managed environment livestock
operation tax credits will expire August 28, 2011.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Greater
than $170,000 in FY 2009, Greater than $691,892 in FY 2010, and
Greater than $691,892 in FY 2011.  Estimated Cost on Other State
Funds of Unknown in FY 2009, FY 2010, and FY 2011.

PROPONENTS:  Supporters say that the bill will aid the Department
of Agriculture regarding certain administrative and enforcement
responsibilities while adding to the overall viability and
sustainability of Missouri agriculture and agri-business.

Testifying for the bill were Representative Munzlinger; Missouri
Soybean Association; Missouri Farm Bureau; Missouri Petroleum
Marketers and Convenience Store Association; Missouri Cattlemens
Association; Missouri Dairy Association; Dave Drennan, Missouri
Dairy Growth Association; Missouri Agricultural and Small
Business Authority; Department of Agriculture; Department of
Conservation; Missouri AgriBusiness Association; and Brian
Brookshire, Missouri Forest Products Association.

OPPONENTS:  Those who oppose the bill say that certain provisions
regarding the cleanup of hazardous materials need to be added.

Testifying against the bill was Missouri Fire Service Alliance.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:10 pm