HCS HB 2393 -- TAX INCENTIVES FOR BUSINESS DEVELOPMENT (Richard)

COMMITTEE OF ORIGIN:  Special Committee on Job Creation and
Economic Development

This substitute authorizes an income tax credit for mega-projects
and changes the manner in which property taxes are assessed on
property located near the Kansas City International Airport.

TAX CREDITS FOR MEGA-PROJECTS

The substitute allows a taxpayer to receive an income tax credit
for a mega-project.  The tax credit will be equal to a percentage
of the taxpayer's payroll.  No mega-projects can be approved
after December 31, 2008.  The department cannot issue any tax
credits for mega-projects prior to July 1, 2010, and no more than
$40 million can be issued annually for all mega-projects or to
any single taxpayer.

"Mega-project" is defined as any manufacturing or assembling
facility approved by the Department of Economic Development for
construction and operation that is located within an enhanced
enterprise zone and which:

(1)  Projects new capital investment in excess of $300 million
over an eight-year period from the date the project is approved
by the department;

(2)  Projects that the number of new jobs will exceed 1,000 over
an eight-year period from the date the project is approved by the
department;

(3)  Pays an average wage for new jobs that exceeds the county
average wage;

(4)  Offers health insurance to all new employees and pays at
least 80% of the premiums; and

(5)  Provides an acceptable plan to repay the mega-project's tax
credits to the state.

The taxpayer may submit an application to the department for
approval of a mega-project.  The department may approve an
application if certain specified criteria are met.  Prior to
final approval of an application, a binding contract must be
executed between the taxpayer and the department.  The substitute
specifies the contract's requirements.

Records and documents relating to the proposed mega-project will
be deemed closed until the application has been approved;
however, information containing business plan information which
may endanger the competitiveness of the business will remain
closed.

Upon the application's approval, tax credits will be issued
annually for up to 22 years from the commencement of the
mega-project's commercial operations and may be extended beyond
the life of the enhanced enterprise zone.  Tax credits will be
equal to the following percentages of annual payroll for the new
jobs located at the mega-project:

(1)  80% for the first three years that tax credits are issued
for the mega-project;

(2)  60% for the next two subsequent years;

(3)  50% for the next two subsequent years;

(4)  30% for the next two subsequent years; and

(5)  25% for all subsequent years.

These tax credits may be claimed against income taxes in Chapter
143, RSMo, excluding withholding taxes.  The credits are
redeemable; however, owners of these tax credits are not required
to have any Missouri income tax liability in order to redeem the
credits and receive a refund.  The credits may be sold or
transferred but cannot be carried forward past the year of
issuance.

Taxpayers who are issued these credits must provide an annual
report to the department and cannot also receive tax credits
under the New or Expanded Business Facility Program, Enterprise
Zones Program, Relocating a Business to a Distressed Community
Program, or Quality Jobs Program.  If the department determines
the average wage is below the county average wage or the taxpayer
has not maintained the employee health insurance as required, the
taxpayer will not receive tax credits for that year.

Any action brought in any court contesting the approval of a
mega-project and the issuance of tax credits or taking any other
action related to the mega-project must be filed within 90 days
of the department's approval of the mega-project.

Taxpayers who receive these credits are prohibited from employing
certain individuals within five years of the department's
approval of the mega-project.  These individuals are:

(1)  Any elected Missouri public official holding office as of
January 1, 2008;

(2)  Any director, deputy director, division director, or
employee directly involved in negotiations between the department
and the taxpayer regarding the mega-project who was employed by
the department as of January 1, 2008; or

(3)  Any relative, within the second degree of consanguinity or
affinity, of any of these individuals.

More than five years after the department's approval of the
mega-project, the taxpayer must disclose in its annual report the
names of certain employees.  These employees are:

(1)  Anyone who has ever been an elected Missouri official;

(2)  Anyone who has ever been a director, deputy director,
division director, or employee directly involved in negotiations
between the department and the taxpayer regarding the
mega-project; and

(3)  Anyone who is a relative, within the second degree of
consanguinity or affinity, of any of these individuals.

PROPERTY TAX ASSESSMENT ON PROPERTY NEAR THE KANSAS CITY
INTERNATIONAL AIRPORT

The substitute specifies that the true value in money for
assessment purposes of any possessor interest in real property
located on or within the ultimate airport boundary shown by a
federal airport layout plan of the Kansas City International
Airport will be the true value in money of the possessor interest
in the real property less the total costs paid toward any new
construction or improvements completed on the property after
January 1, 2008, if included in the possessor interest, unless
paid by the political subdivision, regardless of the year the
costs were incurred.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2009, $0 in FY 2010, and $0 to $40,000,000 in FY 2011.
Estimated Cost on Other State Funds of $0 in FY 2009, Unknown in
FY 2010, and Unknown in FY 2011.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:12 pm