hb0888t-Truly Bill Text

FIRST REGULAR SESSION

[TRULY AGREED TO AND FINALLY PASSED]

SENATE SUBSTITUTE FOR

SENATE COMMITTEE SUBSTITUTE FOR

HOUSE COMMITTEE SUBSTITUTE FOR

HOUSE BILL NO. 888

90TH GENERAL ASSEMBLY

S1916.13T 1999




AN ACT

To repeal sections 348.020 and 348.060, RSMo 1994, and sections 348.406, 348.407, 348.408 and 348.410, RSMo Supp. 1998, relating to the Missouri agricultural and small business development authority, and to enact in lieu thereof thirteen new sections relating to rural agricultural businesses, with an emergency clause and an expiration date for certain sections.






Be it enacted by the General Assembly of the state of Missouri, as follows:

Section A. Sections 348.020 and 348.060, RSMo 1994, and sections 348.406, 348.407, 348.408 and 348.410, RSMo Supp. 1998, are repealed and thirteen new sections enacted in lieu thereof, to be known as sections 348.020, 348.060, 348.406, 348.407, 348.408, 348.410, 348.414, 1, 2, 3, 4, 5 and 6, to read as follows:

348.020. There is hereby created, with such duties and powers as are set forth in sections 348.005 to [348.180] 348.415 to carry out the provisions hereof, a body politic and corporate, [not a state agency, but] an independent instrumentality exercising essential public functions, to be known as the "Missouri Agricultural and Small Business Development Authority". The powers of the authority shall be vested in seven commissioners, who shall be residents of this state, to be appointed by the governor, by and with the advice and consent of the senate, except that the director of the department of agriculture shall serve as a member of the authority as an ex officio member. Not more than four of the commissioners shall be of the same political party.

348.060. The commissioners shall employ an executive director. The executive director shall be the secretary of the authority and shall administer, manage, and direct the affairs and business of the authority, subject to the policies, control, and direction of the commissioners. The commissioners may employ technical experts and such other officers, agents, and employees as they deem necessary, and may fix their qualifications, duties, and compensation. The executive director and all other employees of the authority shall be state employees and eligible for all corresponding benefits. The commissioners may delegate to the executive director, or to one or more of its agents or employees, such powers and duties as it may deem proper.

348.406. 1. The authority, upon application, may issue certificates of guaranty covering a first loss guarantee up to but not more than twenty-five percent of the loan on a declining principal basis for loans to eligible borrowers, executing a note or other evidence of a loan made for the purpose of an agricultural business development loan, but not to exceed the amount of two hundred fifty thousand dollars for any eligible borrower and to pay from the fund to an eligible lender up to twenty-five percent of the amount on a declining principal basis of any loss on any guaranteed loan made pursuant to the provisions of sections 348.400 to 348.415, in the event of default on the loan. Upon payment on the guarantee, the authority shall be subrogated to all the rights of the eligible lender.

2. The authority shall charge for each guaranteed loan a one-time participation fee of one percent which shall be collected by the eligible lender at the time of closing and paid to the authority. In addition, the authority may charge a special loan guarantee fee of up to one percent per annum of the outstanding principal which shall be collected from the eligible borrower by the eligible lender and paid to the authority. [Amounts so collected shall be deposited in the program fund and used, upon appropriation, to pay the costs of administering the program.]

3. All moneys paid to satisfy a defaulted guaranteed loan shall only be paid out of the fund.

4. The total outstanding guaranteed loans shall at no time exceed an amount which, according to sound actuarial judgment, would allow immediate redemption of forty percent of the outstanding loans guaranteed by the fund at any one time.

348.407. 1. The authority shall develop and implement agricultural products utilization grants as provided in this section.

2. The authority may reject any application for grants pursuant to this section.

3. The authority shall make grants, and may make loans or guaranteed loans from the grant fund to persons [or entities] for the creation, development and operation, for up to three years from the time of application approval, of rural agricultural businesses whose projects add value to agricultural products and aid the economy of a rural community.

4. The authority may, upon the provision of a fee by the requesting person in an amount to be determined by the authority, provide for a feasibility study of the person's rural agricultural business concept.

5. Upon a determination by the authority that such concept is feasible and upon the provision of a fee by the requesting person, in an amount to be determined by the authority, the authority may then provide for a marketing study. Such marketing study shall be designed to determine whether such concept may be operated profitably.

6. Upon a determination by the authority that the concept may be operated profitably, the authority may provide for legal assistance to set up the business. Such legal assistance shall include, but not be limited to, providing advice and assistance on the form of business entity, the availability of tax credits and other assistance for which the business may qualify as well as helping the person apply for such assistance.

7. The authority may provide or facilitate loans or guaranteed loans for the business including, but not limited to, loans from the United States Department of Agriculture Rural Development Program, subject to availability. Such financial assistance may only be provided to feasible projects, and for an amount that is the least amount necessary to cause the project to occur, as determined by the authority. The authority may structure the financial assistance in a way that facilitates the project, but also provides for a compensatory return on investment or loan payment to the authority, based on the risk of the project.

8. The authority may provide for consulting services in the building of the physical facilities of the business.

9. The authority may provide for consulting services in the operation of the business.

10. The authority may provide for such services through employees of the state or by contracting with private entities.

11. The authority may consider the following in making the decision:

(1) The applicant's commitment to the project through the applicant's risk;

(2) Community involvement and support;

(3) The phase the project is in on an annual basis;

(4) The leaders and consultants chosen to direct the project;

(5) The amount needed for the project to achieve the bankable stage; and

(6) The projects planning for long-term success through feasibility studies, marketing plans and business plans.

[5. The authority may charge for each grant application a one-time fee not to exceed two hundred dollars to be paid to the authority at the time of application. Such moneys shall be deposited to the program fund.]

12. The department of agriculture, the department of natural resources, the department of economic development and the University of Missouri may provide such assistance as is necessary for the implementation and operation of this section. The authority may consult with other state and federal agencies as is necessary.

13. The authority may charge fees for the provision of any service pursuant to this section.

14. The authority may adopt rules to implement the provisions of this section.

15. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, that is created under the authority delegated in sections 348.005 to 348.180 shall become effective only if it complies with and is subject to all of the provisions of chapter 536, RSMo, and, if applicable, section 536.028, RSMo. All rulemaking authority delegated prior to August 28, 1999, is of no force and effect and repealed. Nothing in this section shall be interpreted to repeal or affect the validity of any rule filed or adopted prior to August 28, 1999, if it fully complied with all applicable provisions of law. This section and chapter 536, RSMo, are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536, RSMo, to review, to delay the effective date or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 1999, shall be invalid and void.

348.408. 1. There is hereby established in the state treasury the "Agricultural Product Utilization Grant Fund". The fund shall consist of money appropriated to it by the general assembly[, charges, gifts, grants, bequests from federal, private or other sources,] and investment income on the fund. Notwithstanding the provisions of section 33.080, RSMo, no portion of the fund shall be transferred to the general revenue fund.

2. The fund shall be administered by the authority.

3. [Beginning with fiscal year 1997-98,] The general assembly may appropriate moneys not to exceed [one and one-half] three million dollars [for the establishment and initial funding of the fund] annually. In any given year, at least [one-third] ten percent of the appropriation shall be awarded to grant requests of twenty-five thousand dollars or less. No single [grant award shall exceed one] rural agricultural business concept shall receive more than two hundred [fifty] thousand dollars in grant awards from the authority.

4. Moneys in the fund may be invested by the state treasurer, and any income therefrom shall be deposited to the credit of the fund.

348.410. 1. There is hereby created in the state treasury the "Agricultural Product Utilization Business Development Loan Program Fund". The fund shall consist of money [collected by the authority and transmitted to the department of revenue and deposited pursuant to subsection 2 of section 348.406 and subsection 5 of section 348.407] appropriated to it by the general assembly and investment income on the fund. Notwithstanding the provisions of section 33.080, RSMo, no portion of the fund shall be transferred to the general revenue fund. The money in the program fund shall be used, upon appropriation, for [administration of the program] purposes established pursuant to sections 348.400 to 348.415 and for no other purpose. Moneys necessary for [the start-up of] this program may be transferred to this program fund from the fund established pursuant to [sections] section 348.408 [and 348.409].

2. For purposes of this section, the department of agriculture shall, as part of the program administration, establish market promotion activities that assist grant recipients and loan applicants in the planning and marketing of value-added products. The department of agriculture is specifically authorized to employ qualified individuals to fulfill such duties.

3. The department of agriculture shall promote products derived from development facilities and renewable fuel production facilities as defined in section 1 of this act.

348.414. 1. The executive director of the authority shall act for the authority except that the appeal of the executive director's decisions shall be to the authority.

2. The executive director of the authority shall be paid on a level to be determined by the authority but not to exceed that of a division director of the department of agriculture.

3. The authority shall not provide services or funds for any project not located in this state.

Section 1. 1. The tax credit created in this section shall be known as the "Agricultural Product Utilization Contributor Tax Credit".

2. As used in this section, the following terms mean:

(1) "Authority", the agriculture and small business development authority as provided in this chapter;

(2) "Contributor", an individual, partnership, corporation, trust, limited liability company, entity or person that contributes cash funds to the authority;

(3) "Development facility", a facility producing either a good derived from an agricultural commodity or using a process to produce a good derived from an agricultural product;

(4) "Eligible new generation cooperative", a nonprofit cooperative association formed pursuant to chapter 274, RSMo, or incorporated pursuant to chapter 357, RSMo, for the purpose of operating a development facility or a renewable fuel production facility;

(5) "Renewable fuel production facility", a facility producing an energy source which is derived from a renewable, domestically grown, organic compound capable of powering machinery, including an engine or power plant, and any by-product derived from such energy source.

3. For tax year 1999, a contributor who contributes funds to the authority may receive a credit against the tax otherwise due pursuant to chapter 143, other than taxes withheld pursuant to sections 143.191 to 143.265, RSMo, chapter 148, RSMo, chapter 147, RSMo, in an amount of up to one hundred percent of such contribution. The awarding of such credit shall be at the approval of the authority, based on the least amount of credits necessary to provide incentive for the contributions. A contributor that receives tax credits for a contribution to the authority shall receive no other consideration or compensation for such contribution, other than a federal tax deduction, if applicable, and goodwill. A contributor that receives tax credits for a contribution provided in this section may not be a member, owner, investor or lender of an eligible new generation cooperative that receives financial assistance from the authority either at the time the contribution is made or for a period of two years thereafter.

4. A contributor shall submit to the authority an application for the tax credit authorized by this section on a form provided by the authority. If the contributor meets all criteria prescribed by this section and the authority, the authority shall issue a tax credit certificate in the appropriate amount. Tax credits issued pursuant to this section shall initially be claimed for the taxable year in which the contributor contributes funds to the authority. Any amount of credit that exceeds the tax due for a contributor's taxable year may be carried forward to any of the contributor's five subsequent taxable years. Tax credits issued pursuant to this section may be assigned, transferred or sold whenever a certificate of tax credit is assigned, transferred, sold or otherwise conveyed, a notarized endorsement shall be filed with the authority specifying the name and address of the new owner of the tax credit or the value of the credit.

5. The funds derived from contributions in this section shall be used for financial assistance or technical assistance for the purposes provided in section 348.407, to rural agricultural business concepts as approved by the authority. The authority may provide or facilitate loans, equity investments, or guaranteed loans for rural agricultural business concepts, but limited to two million dollars per project or the net state economic impact, whichever is less. Loans, equity investments or guaranteed loans may only be provided to feasible projects, and for an amount that is the least amount necessary to cause the project to occur, as determined by the authority. The authority may structure the loans, equity investments or guaranteed loans in a way that facilitates the project, but also provides for a compensatory return on investment or loan payment to the authority, based on the risk of the project.

6. In any given year, at least ten percent of the funds granted to rural agricultural business concepts shall be awarded to grant requests of twenty-five thousand dollars or less. No single rural agricultural business concept shall receive more than two hundred thousand dollars in grant awards from the authority. Agricultural businesses owned by minority members or women shall be given consideration in the allocation of funds.

Section 2. 1. The tax credit created in this section shall be known as the "New Generation Cooperative Incentive Tax Credit".

2. As used in this section, the following terms mean:

(1) "Authority", the agriculture and small business development authority as provided in chapter 348, RSMo;

(2) "Development facility", a facility producing either a good derived from an agricultural commodity or using a process to produce a good derived from an agricultural product;

(3) "Eligible new generation cooperative", a nonprofit cooperative association formed pursuant to chapter 274, RSMo, or incorporated pursuant to chapter 357, RSMo, for the purpose of operating a development facility or a renewable fuel production facility and approved by the authority;

(4) "Member", a person, partnership, corporation, trust or limited liability company that invests cash funds to an eligible new generation cooperative;

(5) "Renewable fuel production facility", a facility producing an energy source which is derived from a renewable, domestically grown, organic compound capable of powering machinery, including an engine or power plant, and any by-product derived from such energy source.

3. Beginning tax year 1999, and subsequent tax years, any member who invests cash funds in an eligible new generation cooperative may receive a credit against the tax otherwise due pursuant to chapter 143, other than taxes withheld pursuant to sections 143.191 to 143.265, RSMo, or chapter 148, RSMo, chapter 147, RSMo, in an amount equal to the lesser of fifty percent of such member's investment or fifteen thousand dollars.

4. A member shall submit to the authority an application for the tax credit authorized by this section on a form provided by the authority. If the member meets all criteria prescribed by this section and is approved by the authority, the authority shall issue a tax credit certificate in the appropriate amount. Tax credits issued pursuant to this section shall initially be claimed for the taxable year in which the member contributes capital to an eligible new generation cooperative. Any amount of credit that exceeds the tax due for a member's taxable year may be carried back to any of the member's three prior taxable years and carried forward to any of the member's five subsequent taxable years. Tax credits issued pursuant to this section may be assigned, transferred or sold whenever a certificate of tax credit is assigned, transferred, sold or otherwise conveyed, a notarized endorsement shall be filed with the authority specifying the name and address of the new owner of the tax credit or the value of the credit.

5. At least ten percent of the tax credits authorized pursuant to this section shall be offered in any fiscal year to projects with capital costs of no more than one million dollars. If the amount of tax credits allowed pursuant to this section exceeds the amount needed for such smaller projects, the remaining tax credits may be offered for projects with capital costs in excess of one million dollars.

6. If members of a project would be eligible for tax credits in excess of one million five hundred thousand dollars, tax credits authorized pursuant to this section shall be prorated between the members on a percent of investment basis, not to exceed the maximum allowed per member.

Section 3. 1. The aggregate of tax credits issued per fiscal year pursuant to sections 1 and 2 of this act shall not exceed six million dollars.

2. Upon the effective date of this section and ending June 30, 2000, tax credits shall be issued pursuant to section 1 of this act, except that, the authority shall allocate no more than three million dollars to fund section 2 of this act in fiscal year 2000. Beginning in fiscal year 2001 and each subsequent year, tax credits shall be issued pursuant to section 2 of this act.

3. Beginning the first day of May of each fiscal year following implementation of section 2 of this act, the authority may determine the extent of tax credits, pursuant to section 2 of this act, that will be utilized in each fiscal year. If the authority determines that:

(1) Less than six million dollars for a fiscal year is to be utilized in tax credits pursuant to section 2 of this act; and

(2) The assets available to the authority, pursuant to section 1 of this act, do not exceed twelve million dollars; then, the authority may offer the remaining authorized tax credits be issued pursuant to section 1 of this act.

Section 4. The provisions of sections 1 to 4 of this act shall expire December 31, 2010.

Section 5. The department of natural resources, the department of economic development and the department of agriculture may provide to an eligible new generation cooperative any technical support necessary to assist in the operation of the facility or the marketing of its products.

Section 6. The tax credits issued in sections 1 to 6 of this act by the Missouri agricultural and small business development authority shall be subject to oversight provisions. Effective January 1, 2000, notwithstanding the provisions of section 32.057, RSMo, the authority shall annually report to the office of administration, president pro tem of the senate, the speaker of the house of representatives, and the joint committee on economic development regarding the tax credits authorized pursuant to sections 1 to 6 of this act, which were issued in the previous fiscal year. The report shall contain, but not be limited to, the aggregate number and dollar amount of tax credits issued by the authority, the number and dollar amount of tax credits claimed by taxpayers, and the number and dollar amount of tax credits unclaimed by taxpayers as well as the number of years allowed for claims to be made. This report shall be delivered no later than November of each year.

Section B. Because immediate action is necessary to promote the welfare and continuing existence of the state's farms, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.












Missouri House of Representatives