SB1155T-ECONOMIC DEVELOPMENT
Summary of the Truly Agreed Version of the Bill

HS SCS SB 1155 -- ECONOMIC DEVELOPMENT

This bill changes the laws regarding economic development.

JOBS NOW PROGRAM

The bill:

(1)  Creates the Jobs Now Recommendation Committee which is
comprised of representatives from the departments of Economic
Development, Agriculture, Natural Resources, and Transportation.
The committee will establish application materials and procedures
for development agencies to follow when applying for grants and
loans from the Board for Jobs Now projects.  Applications must be
submitted simultaneously to the committee and the board.  The
committee will review the applications and prepare analyses and
recommendations for submission to the board, which the board can
use when determining whether or not to approve a particular
project for a grant or loan;

(2)  Explains what determinations must be made by the board
before all or part of a grant or loan can be made.  The board
must give preference to projects that protect natural resources
or rehabilitate dilapidated or inadequate infrastructure found in
distressed communities.  The board must also determine that the
Jobs Now project will not happen without the grant or loan; will
have a significant local economic impact; or demonstrates high
levels of job creation.  In the case of a low- or no-interest
loan, the board must determine that the Jobs Now project will
generate sufficient revenues to repay the principal loan amount
and any applicable interest.  No loan or grant may exceed $2
million;

(3)  Creates the Jobs Now Fund, which will be administered by the
Missouri Development Finance Board.  The board is authorized to
make loans and grants from the Jobs Now Fund.  Up to $12 million
will be allocated to the fund annually.  This money will come
from the increase in state revenues resulting from the
elimination of new or expanded business facility tax credits,
enterprise zone tax credits and exemptions, transportation
development tax credits, and tax credits for qualified research
expenses;

(4)  Requires Jobs Now projects to provide appropriate employment
and business opportunities for minority, women, and disadvantaged
business enterprises;

(5)  Defines "jobs now projects";

(6)  Repeals a provision of current law that requires copies of
all documents filed with the board regarding a loan be forwarded
to the Department of Economic Development.  Current law requires
that, if this information is forwarded to the department, they
become responsible for the administration of the agreements.  In
the event of a substantial default in the terms of any of these
agreements, the department must notify the board so that it can
take the necessary steps to protect its interests.

ENHANCED ENTERPRISE ZONES

The bill:

(1)  Explains the criteria an area must meet to qualify as an
enhanced enterprise zone;

(2)  Requires all enhanced enterprise zones to have a board with
seven members.  The bill explains the membership of the board and
requires the board to report annually to the director of the
department on the status of the zone;

(3)  Requires all governing authorities that want to have an
enhanced enterprise zone within its jurisdiction to hold public
hearings.  The bill outlines the requirements of the hearing and
notification;

(4)  Explains the required elements of the governing body's
petition asking the department to designate an enhanced
enterprise zone;

(5)  States that enhanced enterprise zones will be designated for
25 years and become effective upon the department's approval;

(6)  Allows improvements made to real property located within an
enhanced enterprise zone to be exempt from ad valorem taxes for
up to 25 years from the date on which the zone is designated.  At
least 50% of the ad valorem taxes which are imposed on subsequent
improvements to real property located within an enhanced
enterprise zone will be exempt from taxation for at least 10
years;

(7)  Allows the owner of a new business in an enhanced enterprise
zone a tax credit.  The tax credit can be claimed for up to 10
years.  In order to receive a credit, the owner must employ at
least two people and invest at least $100,000 in the new business
facility.  Recipients of this tax credit cannot receive tax
credits for new or expanded business facilities, enterprise
zones, or the relocation of a business to a distressed community.
The credit will be equal to the lesser of:

(a)  The projected economic benefit the state will receive from
the project as determined by the department; or

(b)  Four hundred dollars for each employee working at the
facility located within the enhanced enterprise zone, $400 for
each employee who lives in the enhanced enterprise zone, $400 for
each employee who is paid a wage that exceeds the average wage
paid within the county where the business is located, and 2% of
the business facility's investment within the enhanced enterprise
zone;

(8)  Prohibits the department from authorizing more than $4
million annually for all enhanced business enterprises until
January 1, 2007, and no more than $7 million annually thereafter;

(9)  Allows expansions of existing businesses to be eligible for
the tax credits, as long as the same criteria for a new business
facility are met;

(10)  Allows tax credits to be sold or transferred but prohibits
them from being carried forward;

(11)  Allows the department to adopt rules, policies, and
procedures that are necessary to carry out the enhanced
enterprise zone provisions; and

(12)  Allows all enterprise zones established before January 1,
2006, to receive the tax benefits of an enhanced enterprise zone,
but not until after January 1, 2007.

JOB TRAINING FOR RETAINED JOBS

The bill allows community college districts to enter into project
agreements, with the approval of the Department of Economic
Development after consultation with the Office of Administration,
with employers who have retained jobs in a stable industry.  The
requirements for qualifying employers  are specified.  The term
"stable industry" is defined as one which has maintained at least
100 employees per year, has agreed to make a $1 million capital
investment, or is at risk of leaving the state.

Community colleges will provide job training, skills assessments,
and training facilities among other services and may subcontract
with other public or private colleges and governmental agencies.
The agreements may provide that program costs be met by receipt
of retained jobs credits from withholding, based on 2.5% of the
gross wages paid to  employees in the first 100 retained jobs and
1.5% for any additional retained jobs.  The employer is
responsible for meeting any shortfall in withholdings.  Community
college districts may issue industrial retained job training
certificates to provide funds for the payment of the costs of the
programs, with a statewide cap of $15 million.

A project is prohibited from using this program if it is also
using the New Jobs Training Program.

ST. CHARLES COUNTY THEATER, CULTURAL ARTS, AND ENTERTAINMENT
DISTRICT

The bill authorizes voters and property owners in St. Charles
County to establish a theater, cultural arts, and entertainment
district to be funded by a sales tax of up to 0.5%.  Minimum
criteria is established for the formation of the district,
including land area and petition requirements.

Registered voters or property owners may file a petition
requesting that the district be established.  This petition can
be filed with the governing body of the city in which the
district is to be established or any circuit court in St. Charles
County.  The bill specifies the requirements of the petition.  A
hearing regarding the formation of the proposed district must be
held before the question can be placed on a ballot at an
election.  Subdistricts within the district can oppose the
creation of the district and be excluded from the sales tax.

The district will be controlled by a board of directors.
Qualifications of the board and the powers possessed and
exercised by the district are specified.

The sales tax will be collected by the district and placed into a
special trust fund for the purposes of the district.  The sales
tax cannot be increased or abolished if the district has
outstanding debts.

HICKORY COUNTY RURAL EMPOWERMENT ZONES

Hickory County is authorized to establish up to two rural
empowerment zones.  The department will review the application to
ensure that the area meets certain criteria.

New businesses and revenue-producing enterprises located in the
zone will be exempt from paying all Missouri income taxes
attributable to the business until August 28, 2014, provided  the
business creates a certain number of new full-time jobs within
one year from the date on which the tax exemption begins.  New
businesses must create at least 10 new jobs; revenue-producing
enterprises that employ fewer than 20 people must create at least
five new jobs; and revenue-producing enterprises that employ 20
or more people must create a number of new jobs equal to 25% of
the number of full-time employees employed by the revenue-
producing enterprise.

LINKED DEPOSITS

The bill defines "eligible multi-tenant development enterprises"
as a new business that develops multi-tenant lab space for
targeted industries, as determined by the department.  The total
amount of money that can be invested in linked deposits is
increased by $10 million, raising the amount that can be invested
at any one time to $360 million.  No more than $10 million can be
used for linked deposits to eligible multi-tenant development
enterprises.

SALES TAXES

The cities of Springfield and Joplin, any city within the
counties of Jasper or Butler, and Butler County are allowed to
impose a sales tax for economic development.  Buchanan County or
the City of St. Joseph can also impose this tax.  The tax cannot
be more than 0.5%, and no revenue from the tax can be used for
any retail development project.  No more than 25% of the revenue
generated can be used for administrative purposes, and at least
20% of the revenue generated must be used for long-term economic
development preparation.  If this tax is imposed, the governing
body must establish an economic development tax board which must
develop economic development plans, economic development
projects, or designations of development areas.

The board must report annually to the appropriate governing body
on the status of any plan, project, or designation.  At any
election, the question of whether or not the tax should be
repealed can be put on the ballot at the discretion of the
governing body. If a petition calling for the repeal is signed by
10% of the registered voters, the governing body must hold an
election on the issue.

BUSINESS LICENSE TAX

Under current law, a business license tax up to $10,000 may be
imposed by villages with less than 1,300 inhabitants.  The limit
is increased to $15,000.

MISCELLANEOUS PROVISIONS

The bill also:

(1)  Prohibits tax credits for new or expanded business
facilities from being approved, awarded, or issued to new
businesses after January 1, 2005;

(2)  Prohibits tax credits for qualified research expenses from
being approved, awarded, or issued after January 1, 2005;

(3)  Prohibits revenue-producing enterprises from receiving
enterprise zone tax exemptions, tax credits, or refunds for
businesses that begin operations after January 1, 2005;

(4)  Prohibits tax credits for investment in, or relocating a
business to, a distressed community from being approved, awarded,
or issued after January 1, 2005;

(5)  Repeals the Missouri Individual Training Account and the
Mature Worker Child Care Program;

(6)  Increases the cap on Neighborhood Assistance Program tax
credits that can be approved from $4 million to $6 million in
2005, 2006, and 2007.  In 2008 and beyond, this cap will remain
at $4 million;

(7)  Expands the definition of "eligible industry" as it relates
to the Business Use Incentives for Large-Scale Development
(BUILD) Program to include a tax preparation company headquarters
in Kansas City as long as the company creates 100 new jobs for
eligible employees.  The company must also invest at least $15
million in an economic development project;

(8)  Increases the aggregate amount of BUILD tax credits that can
be authorized from $11 million to $15 million;

(9)  Prohibits any sales tax authorized in St. Louis County for
storm water control or local parks from being assessed on the
sale of food;

(10)  Repeals the Community Comeback Act.  The local use tax in
St. Louis County, which is currently used to fund the program,
will be used for economic development and enhancing local
government in St. Louis County.  This tax cannot be imposed on
the sale of food.  The bill defines "economic development";

(11)  Requires the department to designate enterprise zones in
the cities of Sugar Creek, St. Ann, Pacific, and St. Clair; an
enterprise zone that is partially located in the City of Nixa and
partially in the City of Ozark; and an enterprise zone that is
partially located in the cities of Sugar Creek, Independence, and
Kansas City;

(12)  Requires the department to designate enterprise zones in
Shelby, Webster, Douglas, and Laclede counties and authorizes
through 2015 the enterprise zones that exist in Linn and Macon
counties;

(13)  Requires any area of the state that qualifies to be an
enterprise zone to be designated as one;

(14)  Allows tax exemptions within the City of Springfield's
enterprise zone to continue for 25 years from the time the
exemption was first granted rather than from the time the zone
was created as required by current law;

(15)  Requires that any abatement or exemption for a business in
an enterprise zone stop 30 days after the business closes or
there is a significant change in the type of business conducted.
A new owner can reapply to receive the abatement or exemption,
but cannot receive the benefit for any period of time beyond the
life of the zone;

(16)  Allows property within an enterprise zone to be exempt from
taxation for up to 25 years from the date on which the exemption
is granted, not the date on which the zone is designated;

(17)  Expands the definition of "distressed community" to include
areas within metropolitan statistical areas that were designated
as either a federal empowerment zone, a federal enhanced
enterprise community, or a state enterprise zone designated prior
to January 1, 1986, but will not include the expansion of those
zones done after March 16, 1988;

(18)  Removes eligible farmers' markets from the list of
organizations to which services can be provided in exchange for
neighborhood assistance tax credits.  "Eligible new generation
cooperative" is also removed from the list of definitions.  These
changes are the result of a court decision that declared Senate
Bill 894, passed in 2000, unconstitutional.  Everything that was
in Senate Bill 894 was left in statute, but is unenforceable;

(19)  States that the St. Louis County Metropolitan Park District
is not restricted from initiating projects related to parks not
necessarily connected to trails.  The bill prohibits the district
from regulating water quality, watershed, or land use issues in
St. Louis County;

(20)  Expands the definition of "development project," as it
relates to the Missouri Rural Economic Stimulus Act (MORESA), to
include eligible new generation processing entities.  Current law
only allows projects that create renewable fuel production
facilities to participate in MORESA.  The bill also allows the
Missouri Agricultural and Small Business Development Authority to
charge reasonable fees associated with the development project,
instead of the Missouri Development Finance Board;

(21)  Allows the City of Springfield to levy a capital
improvement sales tax;

(22)  Prohibits the City of Edmundson from levying a hotel/motel
license fee in excess of $27 per room per year and prohibits the
City of Woodson Terrace from levying a hotel/motel license fee in
excess of $13.50 per room per year;

(23)  Expands the definition of "municipality," as it relates to
the Community Improvement District Act, to include any city,
village, incorporated town, or any unincorporated area of St.
Louis County.  Current law defines "municipality" as any city
located in any first or second classification county and the City
of St. Louis; and

(24)   Expands the Community Improvement District Act to allow
any district formed as a political subdivision to establish a
sales tax to fund the district.  Current law allows only the City
of Kansas City to levy this tax.

Copyright (c) Missouri House of Representatives

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Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:16 am