SB1099C-TAX CREDITS
Summary of the House Committee Version of the Bill

HCS SS SCS SB 1099 -- TAX CREDITS

SPONSOR:  Gibbons (Dempsey)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Job
Creation and Economic Development by a vote of 17 to 0 with 1
present.

Regarding the Tax Credit Accountability Act, this substitute:

(1)  Classifies all tax credit programs by subject.  These
subjects are agricultural, business recruitment, community
development, domestic and social, entrepreneurial, environmental,
housing, redevelopment, and training and educational;

(2)  Requires that specific additional information be included in
all tax credit applications submitted after January 1, 2005.  The
substitute explains these requirements.  If the tax credit is
given to someone who makes a contribution to a group, the
application requirements apply to the recipient of the
contribution, not the contributor;

(3)  Requires that specified follow-up information be reported
for three years after tax credits have been issued.  All of these
reports are due on June 30.  If the tax credit is given to
someone who makes a contribution to a group, the reporting
requirements apply to the recipient of the contribution, not the
contributor;

(4)  Assesses penalties for failure to report;

(5)  Requires the departments of Revenue and Insurance to verify
that tax credit applicants do not owe any delinquent taxes.  If
the applicant is delinquent, the amount of tax credits awarded
will be reduced by the amount of taxes owed;

(6)  Requires the administering agencies of all tax credit
programs to implement a system that will track the amount of tax
credits that are issued and redeemed except credits that are
issued and redeemed simultaneously;

(7)  Expands the duties of the Joint Committee on Tax Policy by
requiring the committee to examine and assess the public benefit
of any tax credit program that is subject to an audit by the
State Auditor and to provide a report to the General Assembly and
the Governor with their findings and recommendations within six
months of receiving the audit report;

(8)  Allows a variety of information to be disclosed in a civil
investigation, action, or proceeding.  Current law only allows
this information to be disclosed in criminal and quasi-criminal
investigations, actions, or proceedings;

(9)  States that records and documents related to tax credits
that are submitted as part of the application will be considered
closed records until a decision has been rendered regarding the
application;

(10)  Requires the Department of Economic Development to prepare
an annual report regarding all economic incentives administered
in the previous calendar year and specifies what must be included
in the report;

(11)  Requires the department to perform a cost-benefit analysis
evaluating the effectiveness of all tax credit programs every
four years;

(12)  Requires the Interagency Development Task Force to annually
submit a unified economic development report to the General
Assembly by the third week of the regular legislative session.
The substitute explains the requirements of this report as well
as the members of the task force; and

(13)  Prohibits tax credits for donations to the Missouri Higher
Education Scholarship Fund and the Advantage Missouri Program
from being approved, awarded, or issued after January 1, 2005.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $235,902
in FY 2005, $102,098 in FY 2006, and $104,694 in FY 2007.
Estimated Cost on Other State Funds of Unknown in FY 2005, FY
2006, and FY 2007.

PROPONENTS:  Supporters say that the bill is a tax credit
accountability measure.  It protects taxpayers and ensures that
all public dollars spent result in the best public benefit.  Most
tax credit programs do not have reporting or follow-up
requirements.  The State Auditor does not have enough information
to determine whether or not the programs are working as intended.
The bill gives the responsibility for auditing all tax credit
programs to the auditor, who will determine if a program should
be continued, modified, or eliminated.

Testifying for the bill were Senator Gibbons; Department of
Economic Development; Department of Revenue; Metropolitan
Congregations United; Missouri Coalition for Preservation and
Economic Development; and St. Louis Regional Commerce and Growth
Association.

OPPONENTS:  There was no opposition voiced to the committee.

Alice Hurley, Legislative Analyst

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