SB617 - Modifies current tax incentives for community economic development
| SB 0617
| Modifies current tax incentives for community economic development
|
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Current Bill Summary
HS/HCS/SCS/SB 617 - This act makes a wide variety of
modifications relating to tax incentives for community economic
development, including:
- Allows Newton County to impose a hotel-motel tax of not
more than 5% for the promotion of tourism (Section 67.1360);
- Allows property owners in Springfield to remove their
property from a Community Improvement District (CID), or to move
it from one zone designation to another, after public notice and
a hearing. Adds notice and election requirements to Kansas City
CID provisions (Sections 67.1442 and 67.1545);
- Adds "electrical service activities classified as SIC
4911" to those types of businesses which constitute "revenue-
producing enterprises" for purposes of eligibility for tax
credits for new or expanded business facilities. (Section
135.100) Adds business who provide "electric power generation,
transmission or distribution activities or natural gas
transportation or distribution activities" to those types of
businesses which constitute "revenue-producing enterprises" for
purposes of eligibility for tax credits for new or expanded
business facilities (Section 135.100), and for purposes of
Enterprise Zone eligibility (Section 135.200). Removes the
provision prohibiting "public utilities" from receiving such tax
credits. (Sections 135.110 and 135.230) Deletes duplicate
section 135.100 from the RSMo;
- Places a cap of $4 million per year on tax credits issued
by DED for new and expanded business facilities; for taxpayers
commencing operations on or after 1/1/01 (Section 135.150);
- Clarifies that airports are included in the definition of
"revenue producing enterprises" for purposes of enterprise zone
tax relief laws. Adds hotels and motels operated in Salem (Dent
County) to the list of businesses and activities which qualify as
a "revenue-producing enterprise" for purposes of enterprise zone
tax relief laws. The act explicitly prohibits eligibility of
these hotels and motels for state Enterprise Zone tax credits,
but allows them to be eligible for real property improvement
exemptions, regardless of the number of new jobs created or
maintained. Deletes duplicate section 135.200 from the RSMo
(Section 135.200);
- Allows the designation of an additional Enterprise Zone in
any fourth class city (with pop. 3,500 - 4,500) in Jackson County
(Sections 135.208 - 135.209);
- Broadens the class of employees of the Harley-Davidson
plant in Kansas City who count toward achieving the fifteen-
percent requirement in order for the plant to be granted the tax
credits and exemptions available to a business located within an
Enterprise Zone, in that it allows Harley-Davidson to count
current employees who resided within the Enterprise Zone at the
initial date of their employment and for 90 days thereafter
regardless of whether the employee continues to reside within the
Enterprise Zone on the date of the count, as long as the employee
continues to reside in Missouri and work at H-D (Section
135.230);
- Redefines "Community Development Corporation" as a not-
for-profit corporation with a board of directors composed of
business, civic and community leaders the primary purpose of
which is to promote economic development-type projects,
regardless of whether the corporation receives Community
Development Block Grant funds (Section 135.400);
- Reduces (from $13 million per year to $4 million per year
for 10 years) the aggregate amount of tax credits available for
qualified investments in Missouri small businesses; with a
reduced portion (from $4 million to $2 million) of the aggregate
amount authorized for investment in small businesses in
distressed communities. Reduces (from 10 years to 5 years) the
time frame over which these tax credits may be claimed (Section
135.403);
- Restricts (to no more than $500,000 per year) the amount
of tax credits available for qualified investments in Missouri
small businesses dealing with pharmaceutical R & D (Section
135.406);
- Increases (from less than 50% to less than 65%) the amount
of ownership interest in a small business which may be held by
investors after claiming a tax credit for a qualified investment
(Section 135.408);
- Reduces (from 5 years to 3 years) the length of time which
a qualified investment must remain in the business, except
qualified investments made in small businesses located in
distressed communities, which investments must remain in the
distressed community for at least 5 years (Section 135.411);
- Allows the Department of Economic Development to require
repayment of tax credits already applied against tax liability if
the application contains a misrepresentation. Revocation of
repayment of credits pursuant to this section shall only apply to
the original credit applicant, not to good faith third-party
purchasers of the credit (Section 135.423);
- Broadens the programs eligible for tax credits pursuant to
the Youth Opportunities & Violence Prevention Act. Allows sale
and transfer of these tax credits (Section 135.460);
- Broadens the definition of "eligible residences" for
purposes of tax credits for rehabilitation of residences in
distressed communities to include a condominium or residence with
a multiple residence structure or a structure containing multiple
family residences. Also broadens the definition of "new
residences" to include vacant agricultural/horticultural property
that is within Christian or Greene Counties and is zoned
residential. Broadens the definition of a "project" for purposes
of tax credits for rehabilitation of residences in distressed
communities to include a multiple residence structure or multiple
individual structures (Section 135.478);
- Increases (from 15% to 20%) the amount of eligible costs
of a new residence, located in a distressed community or certain
census block groups, which can be claimed as a Neighborhood
Preservation tax credit (Section 135.481);
- Reduces (from $3 million to $1.5 million) the per-project
maximum tax credits available for Rebuilding Communities &
Neighborhood Preservation projects. Requires reallocation of
unused tax credits (Section 135.484);
- Allows tax credits to be approved and issued upon
substantial completion of each individual residence, rather than
delaying approval and issuance until substantial completion of
the entire project (Section 135.487);
- Increases (from 10% to 15%) the amount of ownership
interest in a Missouri certified capital company (CAPCO) a person
must hold to be defined as an "affiliate of a certified company".
Modifies the term "certified capital" to "certified capital
investment" and narrows the definition to include only those
CAPCO investments that fully fund either the investor's equity
CAPCO interest, or a qualified debt instrument issued by a CAPCO.
Allows "capital in a qualified Missouri business" to include
secured debt instruments. Defines the new terms "qualified debt
instrument" and "qualified Missouri agricultural business".
Narrows the definition of "qualified distribution" to include
payment of CAPCO management and operation fees only if such fees
of the CAPCO do not, on an annual basis, exceed 2.5% of the
CAPCO's certified capital. Narrows the definition of what
constitutes a "qualified investment". Clarifies the definition
of "qualified Missouri business" and requires the business to
maintain its HQ, principal operations and 80% of its employees in
Missouri, or in a distressed community, for 3 years after the
qualified investment (Section 135.500);
- Caps the aggregate amount of CAPCO tax credits at $4
million per year for 10 years, beginning in 2002. Caps the
"cumulative" amount of CAPCO tax credits at $180 million (Section
135.503);
- Significantly expands the requirements for an entity to be
a certified CAPCO. At least 2 principals (1 of which must be
full-time and located in Missouri) must have 5 years of private
equity venture capital investment experience with no less than
$20 million from third-party venture investors. The applicant
shall not have violated the CAPCO laws or any criminal laws, or
made false representations, or been found liable for civil fraud
or other crimes of moral turpitude (Section 135.508);
- Significantly expands the restrictions for investments by
CAPCOs of certified capital which is not required to be placed in
qualified investments, to require that such investments be held
in a financial institution or held by a broker, shall not be
reciprocally invested, shall be invested only in US Treasury
obligations, CDs, obligations rated "A" or better, mortgage-
backed securities, collateralized mortgage obligations, or
interests in money market funds. At least 25% of qualified
investments made with certified capital raised after 8/28/01 must
be made in Missouri agricultural businesses (Section 135.516);
- Requires each certified CAPCO to file an annual report
with the Department. Allows the Department to audit CAPCOs and
to audit and examine the businesses receiving CAPCO investments.
Requires CAPCOs to include, as a condition of funding an
investment, a requirement that the qualified Missouri business or
qualified Missouri agricultural business provide information so
that the CAPCO can fulfill its reporting requirements. Requires
the Department to file an annual report with the General Assembly
and the Governor (Section 135.527);
- Reduces (from 2,500 to 500) the amount of population
required of a low-income census block group or contiguous block
groups to be eligible as a "distressed community". Further
expands the definition of "distressed community" to include those
areas within Metropolitan Statistical Areas designated as a
federal Empowerment Zone; or a federal Enhanced Enterprise
Community; or a state Enterprise Zone which was designated as a
state Enterprise Zone prior to 1/1/86 (Section 135.530);
- Expands those businesses eligible for tax credits for
investments in, or relocating a business to, a distressed
community, by reducing (from 75% to 60%) the amount of employees
of the business which must work at facilities within the
distressed community and by increasing (from 100 to 150) the
total number of employees which the business may have on the
payroll. Increases (from $75,000 to $150,000) the maximum tax
credits which may be claimed for purchase or lease of computers
or other equipment. Reduces (from $10 million to $7.5 million)
the aggregate annual cap for these tax credits. Deletes
duplicate section 135.535 from the law (Section 135.535);
- Reduces (from $10 million to $7.5 million) the aggregate
annual tax credits available for investing in transportation
development in a distressed community (Section 135.545);
- Extends (from 12/31/2003 to 12/31/2010) the expiration
date for the Petroleum Storage Tank Insurance Fund (Section
319.129). Allows owners and operators of petroleum storage tanks
to continue to participate in the Fund subsequent to the transfer
of their property to another party. Allows the Board to
prioritize claims against the Fund, in consultation with DNR.
(Section 319.131) Establishes a procedure for making claims for
refunds of overpayments of the surcharge on petroleum products.
(Section 319.132) Removes references to a Fund "participation
fee" (Section 319.133);
- Modifies the definition of "follow-up capital" for tax
credits for contributions to innovation centers to include
capital provided to "any Missouri business" in which a qualified
fund has invested seed capital or start-up capital "within the
previous 3 years" (Section 348.300);
- Reduces (from $9 million to $4 million) the aggregate
amount of annual tax credits available for qualified
contributions to Innovation Centers. Increases (from 50% to 60%)
the amount of a qualified contribution which may serve as the
basis for the tax credit (Section 348.302); and
- Reduces (from $6 million to $0) the aggregate amount of
annual tax credits available for qualified contributions to the
Individual Training Account Program (Section 620.1450).
HA 1 - TECHNICAL AMENDMENT REGARDING A STATUTORY REFERENCE.
HA 2 - TECHNICAL AMENDMENT CORRECTING THE POPULATION OF
SPRINGFIELD IN SECTION 67.1442.
HA 3 - REMOVES SECTIONS 319.129 to 319.133, REGARDING PETROLEUM
STORAGE TANKS, FROM THE BILL.
HA 4 - TECHNICAL CLEAN-UP OF SECTIONS 135.500 to 135.516,
REGARDING CAPCOs.
HA 5 - AUTHORIZES THE CITY OF SPRINGFIELD, IN COOPERATION WITH
THE DIRECTOR OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT, TO
DESIGNATE UP TO 3 SATELLITE ZONES WITHIN THE CITY OF SPRINGFIELD.
THE DIRECTOR MUST APPROVE THE CITY'S OVERALL PLAN FOR ENTERPRISE
ZONE AND SATELLITE ZONE USE PRIOR TO THE DESIGNATION. (Section
135.207)
HA 6 - ALLOWS 25% OF THE DEMOLITION COSTS (up to $125,000) OF A
STRUCTURE LOCATED ON UNDERUTILIZED PROPERTY IN WASHINGTON
(FRANKLIN COUNTY) TO COUNT AS ALLOWABLE COSTS UNDER THE
BROWNFIELD REMEDIATION TAX CREDIT PROGRAM. (Section 447.700)
HA 8 - ALLOWS A TAX CREDIT FOR UP TO 50% OF A CONTRIBUTION TO A
SEXUAL VIOLENCE CRISIS CENTER. THE CREDIT IS CAPPED at $50,000
PER TAXPAYER PER YEAR, AND HAS AN ANNUAL AGGREGATE CAP OF $2
MILLION. (SECTION 135.552) ALLOWS A TAX CREDIT FOR UP TO 50% OF
A CONTRIBUTION TO AN UNPLANNED PREGNANCY RESOURCE CENTER. THE
CREDIT IS CAPPED AT $50,000 PER TAXPAYER PER YEAR, AND HAS AN
ANNUAL AGGREGATE CAP OF $2 MILLION. (SECTION 135.630) BOTH OF
THESE TAX CREDITS SUNSET ON 12/31/2006. (SECTION 135.631) REDUCES
(FROM $9.7 MILLION to $5.7 MILLION) THE ANNUAL AGGREGATE AMOUNT
OF TAX CREDITS FOR QUALIFIED RESEARCH EXPENSES AVAILABLE PURSUANT
TO SECTION 620.1039.
HA 10 - ALLOWS AN 85% TAX CREDIT (UP TO $10,000) FOR COST OF
IMPROVING A RECREATIONAL FACILITY HAVING AT LEAST 6 BASEBALL
FIELDS LOCATED IN CERTAIN THIRD CLASSIFICATION COUNTIES
(INCLUDING VERNON COUNTY).
HA 11 - BROADENS THE POPULATION CRITERIA FOR AN AREA TO QUALIFY
AS AN ENTERPRISE ZONE; FROM 1,000-20,000 INHABITANTS TO 1,000-
25,000 INHABITANTS. (SECTION 135.205)
HA 12 - ALLOWS THE GOVERNOR TO CONVEY STATE-OWNED LAND IN ST.
FRANCOIS COUNTY TO THE ST. FRANCOIS COUNTY HABITAT FOR HUMANITY.
HA 13 - REGARDING LICENSEES OF THE DIVISION OF PROFESSIONAL
REGISTRATION OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT; REMOVES A
LICENSEE'S ADDRESS FROM THE LIST OF INFORMATION WHICH IS NOT
CONFIDENTIAL, THUS, MAKING THE LICENSEE'S ADDRESS CONFIDENTIAL.
(SECTIONS 620.010 and 620.145)
HA 15 - CHANGES ALL REFERENCES TO "SCHOOLS" IN THE YOUTH
OPPORTUNITIES & VIOLENCE PREVENTION ACT TO "PUBLIC SCHOOLS".
(SECTION 135.460)
ALAN KELLY