SS SCS HCS HB 2058 -- TAX INCENTIVES FOR BUSINESS DEVELOPMENT

This bill changes the laws regarding tax incentives for business
development.

VARIOUS TAX CREDIT PROGRAMS

The bill:

(1)  Increases the annual cap on the amount of tax credits the
Department of Economic Development may authorize for the Enhanced
Enterprise Zone Program from $14 million to $24 million;

(2)  Increases the fiscal year cap for economic development tax
credits that are approved as part of the Neighborhood Assistance
Program from $4 million to $6 million;

(3)  Specifies that all demolition activities are part of
remediation and allows remediation tax credits to include up to
100% of demolition costs that are not directly part of the
remediation but which are necessary to accomplish the planned use
of the facility.  Demolition may occur on adjacent property that
independently qualifies as abandoned or underutilized and is
located in a municipality with fewer than 20,000 residents.
Currently, some demolition activities associated with brownfield
redevelopment are separate from remediation activities;

(4)  Prohibits a taxpayer who receives tax credits for a new or
expanded business facility from simultaneously receiving Quality
Jobs tax credits under Sections 620.1875 - 620.1890, RSMo, at the
same facility;

(5)  Prohibits the authorization of new tax credits for Missouri
wood energy producers after June 30, 2013;

(6)  Extends the expiration date on the New Generation
Cooperative Incentive Tax Credit Program and the Agricultural
Product Utilization Contributor Tax Credit Program from
December 31, 2010, to December 31, 2016;

(7)  Allows a corporation, firm, partnership, trust, association,
or other entity to receive state-authorized tax credits,
abatements, exemptions, or loans even if a conflict of interest
exists due to a relationship of any degree or affinity to any
statewide elected official or member of the General Assembly,
when the related person holds an equity interest of less than 2%
in the entity that will receive the state benefit;

(8)  Deems a taxpayer eligible for any state tax credit program
even if a conflict of interest exists due to a relationship of
any degree or affinity to any statewide elected official or
member of the General Assembly, when the related person holds an
equity interest of less than 2% in the taxpayer;

(9)  Requires every state agency charged with administering a tax
credit program to make public the name of each tax credit
recipient and the amount of tax credits issued to each recipient;
and

(10)  Requires any tax credit program applicant who purposely and
directly employs unauthorized aliens to forfeit any tax credits
issued but not redeemed and to repay all tax credits that have
been redeemed during the time the unauthorized alien was employed
by the applicant.

QUALITY JOBS PROGRAM

The bill:

(1)  Increases the annual cap on the amount of tax credits that
can be issued for the Quality Jobs Program from $40 million to
$60 million;

(2)  Allows tax credits to be issued for job retention projects
until August 30, 2013.  Tax credits for this project type were
only authorized through August 30, 2007;

(3)  Allows a project facility to include separate buildings
within the same county.  Currently, they must be located within
one mile of each other; and

(4)  Allows a company that leases or owns facilities that produce
electricity derived from qualified renewable energy sources, or
which produce fuel for the generation of electricity from
qualified renewable energy sources, to participate in the program
as a technology business project if it meets the other
requirements of the program.  Qualified renewable energy sources
include open-looped biomass, close-looped biomass, solar, wind,
geothermal, and hydropower but not ethanol distillation or
production or biodiesel production.

COMMUNITY IMPROVEMENT DISTRICTS

The bill:

(1)  Allows community improvement districts (CID) to exist in
special business districts within the City of St. Louis.
Currently, any CID in St. Louis that is also in a special
business district cannot levy a CID sales tax unless special
assessments imposed on real property or businesses within the
special business district are repealed; and

(2)  Excludes sales by public utilities and providers of
communications, cable, or video services from the CID sales tax.

TAX INCREMENT FINANCING

The bill:

(1)  Specifies the terms served by members of tax increment
financing (TIF) commissions in the counties of Jefferson, St.
Charles, and St. Louis; and

(2)  Specifies the requirements for public hearings related to
TIF projects in the counties of Jefferson, St. Charles, and St.
Louis.

TAX POLICY AND TAXATION

The bill:

(1)  Authorizes the department to issue letter rulings regarding
the New Markets Tax Credit Program.  The letter rulings are
binding in a court of law and must be issued within 60 days of a
request.  The department can refuse to issue the letter ruling
for good cause, but must explain the reason for refusal.  Letter
rulings are closed to the public; however, information can be
released as long as anything which would identify the applicant
or is otherwise protected is redacted;

(2)  Establishes in statute an exemption from state and local
sales and use tax on all tangible personal property included on
the United States munitions list that is sold to or purchased by
a foreign government for a governmental purpose.  Currently, this
exemption is granted by the Department of Revenue through a
letter ruling;

(3)  Specifies that the true value in money for assessment
purposes of any possessory interest in real property located on
or within the ultimate airport boundary shown by a federal
airport layout plan of a commercial airport owned by a political
subdivision will be the true value in money of the possessory
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 possessory interest,
unless paid by the political subdivision, regardless of the year
the costs were incurred;

(4)  Prohibits earnings limitations from being imposed on any
purchaser that is not an urban redevelopment corporation or life
insurance company operating as an urban redevelopment corporation
as a condition of receiving partial tax relief provided in
Section 353.110, RSMo;

(5)  Allows information regarding state tax credits claimed by a
member of the General Assembly or any statewide elected public
official to be disclosed to the public; and

(6)  Requires members of the General Assembly and statewide
elected public officials to disclose on financial interest
statements whether they, their spouses, or dependent children
claimed any state tax credits on their most recent state income
tax return.

ENTREPRENEURIAL DEVELOPMENT COUNCIL

The bill establishes the Entrepreneurial Development Council
within the Department of Economic Development consisting of seven
members from Missouri businesses and licensed attorneys
specializing in intellectual property law.  All members will be
appointed by the Governor with the advice and consent of the
Senate.  The department will establish the terms of membership,
which will be permanent and apply to all subsequent members.

The council will provide benefits to entrepreneurs who register
with it.  The council may impose a registration fee, as provided
by department rule, for Missouri entrepreneurs who wish to avail
themselves of the council's benefits.

The Entrepreneurial Development and Intellectual Property Right
Protection Fund is created to accept state and federal
appropriations, grants, bequests, gifts, fees, and awards to be
used by the council.

The council will evaluate allegations of intellectual property
rights infringement and may, based on need, award grants or
financial assistance to subsidize legal expenses incurred in
instituting the legal action necessary to remedy the alleged
infringement.  The council may allocate money from the fund, as
provided by department rule, for low-interest loans and grants to
registered entrepreneurs to provide financial aid for product
development, manufacturing, and advertising of new products.

REPEAL OF CERTAIN PROVISIONS

The bill repeals Section 135.348, the Sponsorship and Mentoring
Program, and Section 260.285, the Recycling Flexible Cellulose
Casing Tax Credit.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:11 pm