SS/SCS/HCS/HB 780 - This act makes a wide variety of modifications relating to support for community economic development, including:

Allows Caldwell County to impose a sales tax on retail sales of up to one-half of one percent for the purpose of economic development within the county. (Section 67.1300)

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)

Allows Kansas City to re-submit a failed capital improvements sales tax proposal to the voters before the expiration of 12 months. There is an emergency clause for this section. (Section 94.577)

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)

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)

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)

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 CDBG 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 timeframe over which these tax credits may be claimed. (Section 135.403)

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. (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. Increases (from $40,000 to $55,000) the maximum tax credit which a taxpayer may claim within a 10-year period, per new residence. (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, to wit: 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 such groups to be eligible as a "distressed community". Further expands the definition of "distressed community" to include those areas within MSAs 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 RSMo. (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. Reduces (from 10 years to 5 years) the length of time such unused credits may be carried forward. Makes not-for-profit entities ineligible for these tax credits. Allows the Director to implement rules and regulations to ensure that the cap is not exceeded. (Section 135.545)

Removes health and professional services from the list of those business excluded from the definition of "industry" for purposes of the New Jobs Training Program. (Section 178.892)

Under current law, at least 50% of grants and loans made with moneys from the Missouri Housing Trust Fund (public housing) must be distributed to persons and families with household combined gross income equal to or less than various stepped incomes within the range of 18% to 33% of the median family income, and the remainder of such grants and loans must be distributed to persons and families with household combined gross income equal to or less than various stepped incomes within the range of 35% to 66% of the median family income. This act removes the 18% to 33% tier of eligible income levels for qualification for public housing assistance. The act also broadens the types of projects eligible for public housing assistance to include: tenant-based and project-based rent subsidies and day care facilities. (Sections 215.036 and 215.038)

Regarding tax credits for contributions to innovation centers: Modifies the definition of "follow-up capital" 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)

Allows the City of St. Louis to have a lien on real property when it has ordered a person to demolish a dangerous building on that property and it has paid the person for the work within 120 days of completing the work. Also requires architects, professional engineers, land surveyors, and their corporations to be licensed when performing services directly connected with the erection or repair of a building or the abatement of dangerous buildings. Current law requires architects, professional engineers, and land surveyors to be "registered", but not "licensed". (Section 429.015)

Allows the demolition and reconstruction of structures which are not the object of remediation to count as allowable costs under the brownfield remediation tax credit program under certain circumstances. Allows properties adjacent to underutilized property to qualify as an "eligible project" under the brownfield remediation program under certain circumstances. Allowable costs also include 25% of demo costs (up to $125,000) of any structure located on underutilized property in Washington (Franklin County). (Sections 447.700 and 447.708)

Creates the Contiguous Property Redevelopment Fund for grants to Kansas City, Jackson County, St. Louis City, St. Louis County, and Greene County to acquire and redevelop certain properties. Sunsets on 8/28/2006. (Section 447.721)

Broadens the definition of "industry" for purposes of the Department's Job Training program to include a consortium of entities organized for the purpose of training their employees. (Section 620.470)

Broadens the types of industries which may obtain assistance for basic industry retraining programs by removing the requirement that such industries must make investments "in manufacturing" and by removing the requirement that such retraining be required to support new investments which are "capital" investments. (Section 620.474)

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)

Allows an 80% tax credit (up to $10,000) for costs of improving a recreational facility having at least 6 baseball fields located in certain third class counties (including Vernon County). (Section 1)

SA 1 - LIMITS (to 15%) THE PERCENTAGE OF TAX CREDITS AVAILABLE THROUGH THE YOUTH OPPORTUNITIES AND VIOLENCE PREVENTION ACT WHICH MAY BE USED FOR THE NEW PROGRAMS ADDED BY THIS ACT (Section 135.460)

SA 2 - AUTHORIZES THE DIVISION OF DESIGN AND CONSTRUCTION TO ENTER INTO "DESIGN-BUILD" CONTRACTS FOR THE DEVELOPMENT OF STATE BUILDINGS AS PILOT PROJECTS. THE DIVISION MAY USE THE DESIGN- BUILD PROCESS FOR UP TO FOUR PROJECTS WITH A PROJECTED COST OF $5 MILLION OR LESS AND FOUR PROJECTS WITH A COST OF MORE THAN $5 MILLION. THE DIRECTOR MUST SUBMIT ANNUAL PROGRESS REPORTS TO THE GENERAL ASSEMBLY. THE AUTHORITY TO ENTER INTO THE DESIGN-BUILD PILOT PROJECTS TERMINATES DECEMBER 31, 2004. (See SB 320, Sections 8.1000-8.1027) ALLOWS THE STATE HIGHWAYS & TRANSPORTATION COMMISSION TO ENTER INTO ONE INTERSTATE HIGHWAY DESIGN-BUILD PILOT PROJECT CONTRACT WITHIN 10 YEARS of 8/28/01. (Section 227.107) EXEMPTS DESIGN-BUILD CONTRACTORS FROM THE REQUIREMENT OF HOLDING A CERTIFICATE OF REGISTRATION IF THE ARCHITECTURAL, ENGINEERING AND SURVEYING SERVICES ARE PERFORMED UNDER CERTAIN CIRCUMSTANCES. (Section 327.465)

SA 3 - ADDS JOBS RETAINED AS A RESULT OF THE PURCHASE OF LARGE (OVER 5,000 EMPLOYEES) BANKRUPT BUSINESSES, TO THE DEFINITION OF "NEW JOBS" FOR PURPOSES OF THE NEW JOBS TRAINING PROGRAM. (Section 178.892)

SA 4 - EXEMPTS FROM STATE SALES TAX THOSE DUES OR FEES PAID TO HEALTH AND FITNESS CENTERS SOLELY FOR "HEALTH-BENEFIT ACTIVITIES", AS OPPOSED TO "RECREATIONAL ACTIVITIES". (Section 144.020)

SA 5 - REMOVES THE REQUIREMENT THAT HEARING NOTICES FOR REQUESTS FOR REDUCTION OR ENLARGEMENT OF A SPECIAL BUSINESS DISTRICT BE MAILED BY REGISTERED OR CERTIFIED MAIL WITH RETURN RECEIPT ATTACHED; THUS, ALLOWING SUCH NOTICE TO BE SENT BY REGULAR MAIL. (Section 71.794)

SA 6 - ALLOWS JEFFERSON COUNTY, GREENE COUNTY AND ST. CHARLES COUNTY TO ADOPT ORDINANCES TO PROVIDE FOR ABATEMENT OF NUISANCES (SUCH AS WEED CUTTING). IF THE CITY MUST REMOVE THE NUISANCE, THEY ARE ALLOWED TO BILL THE PROPERTY OWNER FOR THE COST OF THE ABATEMENT. (Section 67.398)

SA 7 - ALLOWS TAX CREDITS TO THE OWNERS OF CERTAIN CHILD-OCCUPIED FACILITIES FOR UP TO 50% OF THE COSTS OF A LEAD ABATEMENT PROJECT. THE CREDITS MAY BE TAKEN AGAINST INCOME TAX, FRANCHISE TAX OR FINANCIAL INSTITUTIONS TAX, BUT CANNOT BE CLAIMED IN MORE THAN TWO CONSECUTIVE YEARS. THE CREDIT IS NOT REFUNDABLE BUT MAY BE CARRIED BACK FOR THREE YEARS OR FORWARD FOR FIVE YEARS. THE CREDIT WILL APPLY FOR TAX YEARS BEGINNING ON OR AFTER 1/1/2002. (See SB 409, Section 135.915)

SA 8 - ALLOWS TAX CREDITS FOR UP TO 50% OF THE AMOUNT OF A CONTRIBUTION TO AN ECONOMIC OPPORTUNITY SCHOLARSHIP CHARITY. (Section 135.344)

SA 9 - PROHIBITS THE AVAILABILITY OF NEW TAX CREDITS (AFTER 6/30/2002) FOR QUALIFIED INVESTMENTS IN MISSOURI SMALL BUSINESSES DEALING WITH PHARMACEUTICAL R & D .(Section 2)

SA 10 - REMOVES THE SS's ADDITION OF BUSINESSES 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 ENTERPRISE ZONE ELIGIBILITY. (Section 135.200) LEAVES INTACT THE PROVISION IN CURRENT LAW PROHIBITING "PUBLIC UTILITIES" FROM RECEIVING SUCH TAX CREDITS. (Section 135.230)

SA 11 - ALLOWS TAX CREDITS FOR UP TO 35% OF THE AMOUNT OF A DONATION TO THE MISSOURI HIGHER EDUCATION SCHOLARSHIP DONATION FUND. (Section 173.840)

SA 12 - STRIKES SECTION 135.530 FROM THE BILL.

SA 13, PART II - ALLOWS TAX CREDITS FOR UP TO 50% OF THE AMOUNT OF A CONTRIBUTION TO AN UNPLANNED PREGNANCY RESOURCE CENTER; EFFECTIVE 1/1/2002. (Section 135.630)

SA 14 - REQUIRES THAT A MINIMUM OF 30% OF QUALIFIED INVESTMENT IN MISSOURI SMALL BUSINESSES IN DISTRESSED COMMUNITIES BE INVESTED IN PRE-SEED OR SEED VENTURES LOCATED IN INCUBATORS FUNDED, IN WHOLE OR IN PART, BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT. REQUIRES PRE-SEED AND SEED VENTURES WHICH RECEIVE QUALIFIED INVESTMENTS TO MAINTAIN IT'S HQ OR PRIMARY CUSTOMER BASE WITHIN THE DISTRESSED COMMUNITY FOR A MINIMUM PERIOD OF 5 YEARS. (Sections 135.411 and 135.516)
ALAN KELLY