SS#2 SCS HCS HB 191 -- ECONOMIC DEVELOPMENT AND TAXATION

This bill changes the laws regarding economic development and
taxation.

NEIGHBORHOOD ASSISTANCE ACT (Section 32.105, RSMo)

Currently, a person or family is considered eligible to qualify
for assistance from the Missouri Housing Development Commission
under the Neighborhood Assistance Act for an affordable housing
unit of either a rental unit or an owner-occupied unit if the
household's combined, adjusted gross income is equal to or less
than the specified percentages of the median family income for
the geographic area in which the residential unit is located or
the median family income for the state, whichever is greater.
The bill increases the income threshold for an owner-occupier of
an affordable housing unit so that it is double the threshold
required for a rental unit.

TAX INCREMENT FINANCING REPORTING (Section 99.865)

The bill:

(1)  Requires the Director of the Department of Economic
Development to also submit to the State Auditor its annual tax
increment financing (TIF) report which is currently submitted to
the Speaker of the House of Representatives and the President Pro
Tem of the Senate;

(2)  Prohibits municipalities which fail to comply with state TIF
reporting requirements from implementing any new TIF project for
at least five years; and

(3)  Requires the State Auditor to post and maintain for at least
10 years information provided in the annual reports from
municipalities to his or her web site in a searchable database
available to the public.

MISSOURI DEVELOPMENT FINANCE BOARD TAX CREDITS (Section 100.286)

Currently, taxpayers who contribute to Missouri Development
Finance Board funds receive an infrastructure development
contribution tax credit equal to 50% of the contribution.  The
board cannot issue more than $10 million in tax credits in any
calendar year or 5% of the average growth in the general revenue
receipts in the preceding three fiscal years, whichever is less;
but the limitation may be exceeded if agreed to by the
Commissioner of the Office of Administration and the directors of
the departments of Economic Development and Revenue.  The bill
specifies that the total annual amount of tax credits which the
board may authorize or approve cannot exceed $10 million, but
this limitation can be exceeded if agreed upon by the
commissioner and the department directors in a signed notarized
letter, in which case no more than $25 million in tax credits can
be authorized or approved in that year.

BUSINESS USE INCENTIVES FOR LARGE-SCALE DEVELOPMENT PROGRAM
(Sections 100.760, 100.770, and 100.850)

Currently, in order to approve an application for tax credits for
the Business Use Incentives for Large-Scale Development (BUILD)
Program, the Missouri Development Finance Board must find that
there is at least one other state that the applicant verifies is
being considered for the BUILD project and that there is a
significant disparity in the project's costs based on the
incentives offered by the competing state.  The bill removes
these requirements and increases the total amount of tax credits
that can be authorized annually for the program from $15 million
to $25 million.

TRANSPORTATION DEVELOPMENT DISTRICTS (Sections 105.145, 238.207,
238.212, and 238.235)

The bill:

(1)  Requires the board of directors of any transportation
development district to submit an annual report of financial
transactions to the State Auditor as required of political
subdivisions under Section 105.145.  Failure to timely submit a
copy of the annual financial statement will result in a fine of
up to $500 per day;

(2)  Requires a petition to create a district to include details
of the budgeted expenditures, including estimated expenditures
for real physical improvements, estimated land acquisition
expenses, estimated expenses for professional services, and
estimated interest charges;

(3)  Requires the circuit court to order at least one public
hearing on the creation and funding of a proposed district if the
petition to create a district was filed by the owners of all real
property within the proposed district;

(4)  Requires that the sales tax authorized in a district will be
effective on the first day of the second calendar quarter after
the Department of Revenue receives notification of the tax.
Currently, the tax goes into effect on the first day of the month
following its adoption by the qualified voters; and

(5)  Requires the Director of the Department of Revenue, instead
of the district, to perform all functions incidental to the
administration, collection, enforcement, and operation of
district sales taxes.

BUILD AMERICA AND RECOVERY ZONE BONDS (Sections 108.1000 -
108.1020)

The bill:

(1)  Allows the Missouri Development Finance Board to issue Build
America bonds and recovery zone bonds to pay for the cost of
financing qualifying projects and authorizes any development
agency, board, commission, or body corporate and politic of the
state that is authorized to issue bonds to designate bonds as
Build America bonds and recovery zone bonds;

(2)  Requires the Department of Economic Development to allocate
recovery zone bonds to counties and large cities in accordance
with the federal Internal Revenue Code.  Counties and large
cities can waive any allocation at any time by giving written
notice to the department, and waived allocations may be
reallocated by the department; and

(3)  Specifies that the bonds and any interest they earn are
exempt from all taxation by the state and its political
subdivisions.

TAX CREDIT REPORTING REQUIREMENTS (Sections 135.800, 135.802, and
135.805)

The bill:

(1)  Revises provisions regarding the Tax Credit Accountability
Act of 2004 to include the enhanced zone in Sections 135.950 -
135.975 and the Missouri Quality Jobs Program;

(2)  Requires the number of estimated jobs created as a result of
tax credits to be reported by all recipients, if applicable, as
part of the act;

(3)  Requires all tax credit recipients to report annually for
three years following the issuance of the tax credits the actual
number of jobs created as a result of the tax credits.  This
provision does not apply to recipients of domestic and social tax
credits, environmental tax credits, or financial and insurance
tax credits; and

(4)  Requires the Department of Economic Development to publish
the information in the reports on its web site and on the
Missouri Accountability Portal.

HISTORIC PRESERVATION TAX CREDITS (Sections 253.550 and 253.559)

The bill:

(1)  Prohibits, between January 1, 2010, and June 30, 2010, the
Department of Economic Development from approving applications
for historic preservation tax credits which exceed $70 million in
total.  For fiscal years beginning on or after July 1, 2010, the
department cannot approve applications for tax credits which
exceed $140 million in total.  Both of these amounts can be
increased by the amount of tax credits which are rescinded in a
given year.  These limitations will not apply to:

(a)  Applications approved for projects which will receive less
than $275,000 in tax credits;

(b)  Applications which have received approval from the
department prior to January 1, 2010; and

(c)  Applications filed on or before January 1, 2010, from any
taxpayer stating that he or she has incurred costs and expenses
for an eligible property which exceed 5% of the total project
costs or $1 million, whichever is less, and received an approved
Part I from the Secretary of the United States Department of the
Interior or applications filed on or after January 1, 2010, from
any taxpayer who has received certification from the state
historic preservation officer that the rehabilitation plan meets
certain standards and that the expenses associated with the
rehabilitation will exceed 50% of the total basis in the
property;

(2)  Prohibits more than $250,000 in tax credits from being
issued for the eligible costs and expenses incurred when
rehabilitating an eligible residential property.  An eligible
residential property is a non-income producing single-family,
owner-occupied residential property that is either a certified
historic structure or a structure in a certified historic
district;

(3)  Requires all tax credit applications, including those for
additional tax credits in excess of the amount approved, to be
prioritized for review and approval based on the date of the
postmark.  Applications with the same postmark will go through a
lottery process to determine the order in which they will be
reviewed;

(4)  Specifies the requirements that a preliminary application
must meet in order to be approved;

(5)  Specifies that applications awaiting review will be kept on
file and reviewed in order when the department receives its next
allocation of tax credits if the department has allocated all of
its tax credits;

(6)  Requires all projects that receive tax credit authorization
to begin rehabilitation within two years of the date noted on the
letter received by the applicant notifying him or her of the
approval.  Commencement of rehabilitation means that as of the
date on which physical work has begun, the applicant has incurred
at least 10% of the estimated total costs of the rehabilitation.
If a taxpayer fails to submit this evidence, the tax credit
approval will be rescinded and the amount of those tax credits
will be included in the total amount of tax credits available for
approval;

(7)  Requires an applicant with tax credit authorization to seek
final approval from the department prior to claiming the tax
credits.  The bill specifies the requirements of final approval;
and

(8)  Allows a taxpayer to apply for additional tax credits if the
amount of eligible rehabilitation costs and expenses incurred
exceed the amount approved in the taxpayer's application.

QUALITY JOBS PROGRAMS (Sections 620.1878 and 620.1881)

The bill:

(1)  Revises the definition of "project facility" as it relates
to the Quality Jobs Program so that it may include separate
buildings located within 15 miles of each other or within the
same county.  Currently, the buildings must be within one mile of
each other or within the same county;

(2)  Allows a company which has filed or announced its intention
to file for bankruptcy between January 1, 2009, and December 31,
2009, to be a qualifying company for the program.  Currently, any
company which has filed for bankruptcy or has publicly announced
its intention to file for bankruptcy protection is prohibited
from being deemed a qualifying company for the purposes of the
program.  A qualifying company can be eligible if it:

(a)  Certifies to the Department of Economic Development that it
plans to reorganize and not to liquidate; and

(b)  Produces proof after its bankruptcy petition has been filed
that it is not delinquent in filing any tax returns or making any
payments due to the state including, but not limited to, all tax
payments due after the filing of the bankruptcy petition and
under the terms of the plan of reorganization;

(3)  Specifies that any taxpayer who receives benefits from the
program and files for bankruptcy under Chapter 7 of the United
States Bankruptcy Code, Title 11 U.S.C., must notify the
Department of Economic Development, forfeit the benefits, and
repay the state an amount equal to any state tax credits already
redeemed and any withholding taxes already retained;

(4)  Revises the definition of "technology business project" as
it relates to the program to include certain clinical molecular
diagnostic laboratories;

(5)  Specifies how the department must apply the definition of
"project facility" when a business that has already received an
approved notice of intent later files another notice of intent;

(6)  Eliminates the per-company annual cap on technology business
projects within the program.  Currently, the per-company cap is
$500,000;

(7)  Eliminates the per-company annual cap on high impact
projects within the program.  Currently, the per-company cap is
$750,000 or $1 million under certain conditions; and

(8)  Increases the annual tax credit cap for the program from $60
million to $80 million.

MISCELLANEOUS PROVISIONS

The bill:

(1)  Codifies Executive Order 07-24 into statute, which requires
the Commissioner of the Office of Administration to maintain the
Missouri Accountability Portal.  The portal consists of an
easy-to-search database of financial transactions related to the
purchase of goods and services and the distribution of funds for
state programs.  The portal must be updated each state business
day and maintained as the primary source of information about the
activity of Missouri's government (Section 37.850);

(2)  Increases the amount of distressed areas land assemblage tax
credits which can be issued annually from $10 million to $20
million (Section 99.1205);

(3)  Allows business headquarters to receive tax credits for new
or expanding businesses for expansions done before January 1,
2020.  Expansions at headquarter facilities will be considered
separate business facilities and entitled to the credits if at
least 25 new employees and at least $1 million of new investment
are attributed to the expansion.  Buildings on multiple,
noncontiguous properties will be considered one facility if they
are in the same county or municipality (Section 135.155);

(4)  Limits the total amount of tax credits that may be
authorized for low-income housing to taxpayers owning an interest
in a qualified Missouri project to $6 million each fiscal year
for projects financed through tax-exempt bonds (Section 135.352);

(5)  Increases the tax credit cap for qualified equity
investments under the New Markets Tax Credit Program from $15
million to $25 million per year (Section 135.680);

(6)  Prohibits a tax credit for guaranty fees for eligible small
businesses from being authorized on or after the thirtieth day
following the effective date of the bill (Section 135.766);

(7)  Increases, beginning January 1, 2010, the outstanding shares
and surplus threshold amount used to calculate a corporation's
annual franchise tax from $1 million to $10 million (Section
147.010);

(8)  Reduces, beginning July 1, 2010, the amount of tax credits
that can be authorized per fiscal year for the Family Development
Account Program from $4 million to $300,000 (Section 208.770);

(9)  Specifies that, under certain conditions, an out-of-state
wholesale drug distributor that is a drug manufacturer which
produces and distributes from a facility inspected and approved
by the federal Food and Drug Administration and is licensed by
the state in which the facility is located will not be required
to be licensed but must register its business name and address
with the Board of Pharmacy within the Department of Insurance,
Financial Institutions and Professional Registration and pay a
$10 filing fee.  This also applies to a wholesale drug
distributor located in a foreign country if it is authorized and
in good standing to operate as a drug manufacturer within its
jurisdiction (Section 338.337);

(10)  Allows a prorated amount of tax credits which remain for a
brownfield redevelopment project to be released when a letter of
completion is issued by the Department of Natural Resources for a
portion of the specific project (Section 447.708);

(11)  Revises the provisions regarding the Open Meetings and
Records Law, commonly known as the Sunshine Law, to allow a
public governmental body to close meetings, records, and votes
regarding information submitted by an individual, corporation, or
other business entity to a public institution of higher education
in connection with a proposal to license intellectual property or
perform sponsored research which contains sales projections or
other business plan information (Section 610.021);

(12)  Allows certain records pertaining to a business prospect
with which the Department of Economic Development; the Missouri
Economic Development, Export, and Infrastructure Board; or a
regional planning commission is currently negotiating to be
deemed a closed record (Section 620.014);

(13)  Requires contracts that the Department of Economic
Development enters into with another party for any financial
assistance to include a summary of the jobs created and to report
annually as required in Section 135.805.  The annual report must
be made available to the public on the Missouri Accountability
Portal (Section 620.017);

(14)  Allows the department to include pre-employment training in
its new or expanding industry training program.  The bill
specifies what services may be provided including development of
training plans, the provision of training through qualified
training staff, fees for training professionals, and
transportation expenses if the training can be more effectively
provided outside the community where the jobs will be located
(Section 620.472); and

(15)  Establishes the Big Government Get Off My Back Act which
prohibits user fees imposed by the state from increasing for four
years from the effective date of the bill unless the fee increase
is to implement a federal program administered by the state or is
a result of an act of the General Assembly.  For four years,
beginning on the effective date of the bill, any state agency
proposing a rule must certify that it does not have an adverse
impact on small businesses with fewer than 25 employees or that
it is necessary to protect the life, health, or safety of the
public or the agency must exempt any small business with fewer
than 25 employees from the rule.  Rules established as a result
of a federal mandate or to implement a federal program
administered by the state or an act of the General Assembly are
excluded from these provisions (Section 1).

The bill contains an emergency clause for the provisions
regarding the Missouri Development Finance Board tax credits, the
Business Use Incentives for Large-Scale Development Program, the
increase on the tax credit cap for qualified equity investments,
the historic preservation tax credits, and the Quality Jobs
Program.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:24 am