SCS/HS/HB 1409 - This act makes various changes to the law regarding economic development. A summary follows:

SECTION 30.750 - LINKED DEPOSIT - The act adds "eligible multi- tenant development enterprises" to the current law concerning linked deposits. These enterprises must be a new business that develops multi-tenant lab space for targeted industries, as determined by the department of economic development. A similar use of the property must continue throughout the five year period of the linked deposit program.

SECTION 32.105 DEVELOPMENT TAX CREDIT - 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 $4 million.

SECTION 32.110 - Removes eligible farmers' markets from the list of organizations to which services can be provided in exchange for tax credits. Eligible new generation cooperative is also removed from the list of definitions. DED says these changes are the result of a court decision that declared SB 894 unconstitutional. Everything that was in SB 894 was left in statute, but is unenforceable.

SECTION 67.265 - Allows any city or county of this state may enact ordinances addressing substance related health issues.

SECTION 67.1303 - The act allows, upon voter approval, the city of Springfield, the City of Joplin, any city within Jasper County, Butler County, and any city within Butler County to impose a sales tax for economic development. The tax cannot be more than 0.5%. 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 appropriate governing body can repeal the tax. If a petition calling for the repeal is signed by 10% of the registered voters, the governing body must hold an election regarding the repeal of the tax.

SECTIONS 67.1401 & 67.1545 - The act expands the community improvement district law to enable any district formed as a political subdivision to establish a sales tax to fund the district. current law enables this tax for Kansas City only. Consistent with constitutional provisions, such tax, under the current law, would have to be submitted to a vote of the people.

SECTION 71.620: 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. This increases that limit to $15,000.

SECTION 94.578 - Enables Springfield to enact a community improvement sales tax.

SECTIONS 100.255 100.293: JOBS NOW PROGRAM - Section 100.255: Defines "jobs now projects" as the purchase, construction, extension, and improvement of real estate, plants, buildings, structures, or facilities whether or not now in existence that are used primarily as infrastructure facilities, public facilities, or public higher education infrastructure facilities, except when any entity provides a certified design or operation plan that is demonstrably less expensive than the usual and customary average industry cost for installation, construction, purchasing, extension, and improvement of real estate, or a variety of other buildings and facilities. In this case, the company providing these services may receive a payment equal to the usual and customary fee for the project plus additional compensation equal to two times the percentage by which the cost of the activity is less than the usual and customary average for the same activity. The entity must also pay the company that is providing the service compensation equal to 25% of any annual operational costs which are lower than the usual and customary average industry determination of cost for operation for such facility, procedure, or service for a period of time equal to 1/4 the design lifetime of such entity or 5 years, whichever is less.

SECTION 100.260: CREATES THE JOBS NOW FUND - Creates the Jobs Now Fund, which will be administered by the Missouri Development Finance Board. The MDFB is authorized to make loans and grants from the Jobs Now Fund.

SECTION 100.263 - MULTI-TENANT LAB SPACE - Extends the list of recipients of moneys from the Infrastructure Development fund to include specialized multi-tenant rental property.

SECTION 100.275: MDFB Can Issue Bonds for Jobs Now Fund Allows the MDFB to issue revenue bonds to provide the initial money needed for the Jobs Now Fund. No bonds can be issued after 2015. These bonds will paid by appropriations made by the General Assembly.

SECTION 100.281: REPEALS CERTAIN PROVISIONS RELATED TO DED'S RECEIPT OF LOAN INFORMATION - Current law say that copies of all documents filed with the MDFB in support of a loan application, copies of all agreements, notes, evidence of debts, or security agreements connected with a loan can be forwarded to the Department of Economic Development. If this information is forwarded, the department becomes 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 MDFB so that the MDFB can take whatever steps necessary to protect its interests. This act repeals these provisions.

SECTION 100.293: CREATES THE JOBS NOW RECOMMENDATION COMMITTEE - 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 MDFB for Jobs Now projects. Applications must be submitted simultaneously to the committee and the MDFB. The committee will review the applications and prepare analyses and recommendations for submission to the MDFB, which the MDFB can use when determining whether or not to approve a particular project for a grant or loan.

SECTION 100.293: DETERMINATIONS THE MDFB MUST MAKE BEFORE APPROVING A GRANT OR LOAN - Explains what determinations must be made by the MDFB before all or part of a grant or loan can be made. These determinations are that the Jobs Now project:

1. will not happen without the grant or loan; or

2. will have a significant local economic impact; or

3. demonstrates high levels of job creation.

In the case of a low- or no-interest loan , the MDFB 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 $5 million.

Twenty percent of the money available for Jobs Now grants and loans must be set aside for projects that will use the grant or loan to leverage additional matching funds from federal or non-state sources. Twenty percent must also be set aside for projects that are for public higher education infrastructure facilities that have a high probability of creating jobs in targeted industries. Projects of these types are not prohibited from applying for grants or loans from the unreserved portion of the Jobs Now fund.

SECTION 100.710: TAX PREPARATION HEADQUARTERS - Expands the definition of "eligible industry", as it relates to the 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 meet the other BUILD requirement, which is to invest at least $15 million dollars in an economic development project.

SECTION 100.850: BUILD TAX CREDIT - Increases the aggregate amount of BUILD tax credits that can be authorized from $11 million to $15 million. This section is also being repealed because it was double-enacted. One section will remain in statute and one will be removed.

SECTION 135.155: ELIMINATES THE NEW OF EXPANDED BUSINESS FACILITY TAX CREDIT - Prohibits tax credits for new or expanded business facilities from being approved, awarded, or issued after January 1, 2005 .

SECTION 135.207: SATELLITE ENTERPRISE ZONE IN SUGAR CREEK - Requires DED to designate one satellite enterprise zone in Sugar Creek.

SECTION 135.212: ENTERPRISE ZONES - Designates or modifies the following enterprise zones (numbers below correspond with subsections in the act):

1. Laclede County;

2. Richland;

3. Crocker;

4. Nixa;

5. Ozark;

6. Douglas County;

7. A zone that located within Sugar Creek, Independence, and Kansas City;

8. St. Clair;

9. Pacific;

10. An enterprise zone in the area between Ozark and Nixa;

11. Webster County;

12. Postpones the expiration of the enterprise zones in Linn and Macon counties to 2015;

13. Shelby County;

14. St. Ann; Macon County; and

15. RaytownSection

SECTION 135.215: SPRINGFIELD'S ENTERPRISE ZONE - Allows designations within Springfield's enterprise zone to be continued for 25 years from the time the time of the designation rather than from the time the zone was created, as required in current law.

Any abatement or exemption for an enterprise zone will 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.

SECTION 135.262: STATEWIDE ENTERPRISE ZONE DESIGNATION - Requires that any area that meets all the requirements of an enterprise zone be designated as one by the Department of Economic Development.

SECTION 135.286: ENTERPRISE ZONE TAX EXEMPTIONS AND CREDITS - Prohibits revenue-producing enterprises from receiving enterprise zone tax exemptions, tax credits or refunds for businesses that begin operations after January 1, 2005.

The act 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 as current law requires.

SECTION 135.288: ENTERPRISE ZONE TAX CREDITS - Prohibits tax credits for enterprise zones (urban redevelopment) from being approved, awarded, or issued after January 1, 2005.

SECTION 135.530: DISTRESSED COMMUNITY DEFINITION - For a United States census block group, or contiguous group of block groups, within a metropolitan statistical area to be considered a "distressed community", current law states that the population for the block group must be 2,500 and the median household income must be below 70% of the median household income for the metropolitan area. This legislation decreases the population requirement to 500.

The act expands the definition of a "distressed community" to include areas within metropolitan statistical areas that are designated as either a federal empowerment zone, a federal enhanced enterprise community, or state enterprise zones designated prior to January 1, 1986, but will not include the expansion of those zones done after March 16, 1988.

SECTIONS 135.610 & 163.036 - "BETTY L. THOMPSON SCHOLARSHIP CHARITY TAX CREDIT ACT" - This section authorizes an individual income tax credit for tax years beginning on after January 1, 2005, or contributions of $200 or more made to a Missouri nonprofit educational assistance organization. Contributions for the educational expenses of a taxpayer's dependent do not qualify.

The amount of the tax credit will be equal to 50% of the contribution. The amount of the tax credit cannot exceed the tax liability of the taxpayer in any one year. Any unused credit can be carried forward for four years. The cumulative amount of tax credits cannot exceed $10 million per fiscal year.

The Director of the Department of Economic Development will establish a procedure to apportion the tax credits among all nonprofit educational assistance organizations and annually determine which organizations qualify based on the specified conditions. The act allows the director to contract with a nonprofit educational assistance organization to be a designated oversight organization to administer the program. Contributions are to be distributed for student scholarships less up to 2% for administrative costs. School boards of certain school districts may opt to participate in this program by adopting a resolution and submitting it to the Department of Elementary and Secondary Education.

The act requires the eligible pupil count to be adjusted if a pupil no longer is enrolled or transfers to another school because of an educational scholarship.

SECTIONS 135.1050 135.1075: ENHANCED ENTERPRISE ZONES

SECTION 135.1050 DEFINITIONS

SECTION 135.1055: ENHANCED ENTERPRISE ZONE CRITERIA - To qualify as an enhanced enterprise zone, the area must meet the following criteria:

(1) The area must be a blighted area, have pervasive poverty, unemployment and general distress; and

(2) At least 60% of the residents living in the area have incomes below 90% of the median income of all residents within the state or within the county in which the area is located.

(3) In metropolitan statistical areas, the population of the area must be between 500 and 100,000 at the time of designation. If the area is not within a metropolitan statistical area, the population of the area at the time of designation must be between 500 and 40,000. If the population of the jurisdiction of the governing authority does not meet the minimum population requirements the population of the area must be at least 50% of the population of the jurisdiction. However, an entire county cannot be designated as an enhanced enterprise zone; and

(4) The level of unemployment within the area exceeds the average rate of unemployment for either the state over the previous 12 months or the county in which the area is located over the previous 12 months.

An enhanced enterprise zone may also be established in an area for which public and individual assistance has been requested by the Governor for an emergency due to a natural disaster of major proportions. The area must also demonstrate that it has the potential to create sustainable jobs in a targeted industry or a demonstrated impact on industry cluster development.

SECTION 135.1057: ENHANCED ENTERPRISE ZONE BOARD - Board will have 7 members. The draft explains the membership of the board.

SECTION 135.1060: PUBLIC HEARING REQUIREMENTS - Any governing authority that wants to have an enhanced enterprise zone within its jurisdiction must hold public hearings. The draft outlines the requirements of the hearing and notification.

This section explains the required elements of the governing body's petition asking the department to designate and enhanced enterprise zone.

The enhanced enterprise zone designation will be effective upon the department's approval and will expire in 25 years.

The board is required to report annually to the director of the department on the status of the zone.

SECTION 135.1065: LOCAL PROPERTY TAX ABATEMENT - Improvements made to real property located within an enhanced enterprise zone may 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 improvement to real property located within an enhanced enterprise zone shall be exempt from taxation for at least 10 years.

SECTION 135.1070: ENHANCED ENTERPRISE ZONE TAX CREDIT - 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 2 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 relocating a business to a distressed community. The credit will be equal to the lesser of:

1. The projected economic benefit the state will receive from the project (as determined by DED); or

2. A credit equal to $400 for each employee working at the facility located within the EEZ; plus $400 for each employee who lives in the EEZ; plus $400 for each employee who is paid a wage that exceeds the average wage paid within the county in which the business is located; plus a credit equal to 2% of the business facility's investment within the EEZ.

Regardless, DED cannot authorize more than $4 million annually for all enhanced business enterprises.

If a facility which is not a new business is expanded by the taxpayer, the expansion will be eligible for the tax credits, as long as the same criteria for a new business facility are met.

Tax credits may not be carried forward but can be sold or transferred.

SECTION 135.1075: RULEMAKING AUTHORITY - The department may adopt rules, policies, and procedures that are necessary to carry out the enhanced enterprise zone provisions.

SECTIONS 178.980 178.985: JOB TRAINING FOR RETAINED JOBS - 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, and 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 costs of the programs, with a statewide cap of $25 million. Timetables for the approval of projects are specified; establishes special funds; and regulates the disbursal of moneys to those funds, certification of withholdings, and borrowing for and issuance of certificates by community college districts. The Department of Economic Development can collect 2% of the total training costs for administrative expenses associated with this program.

A project is prohibited from using this program if it is also using the New Jobs Training Program. These provisions will expire six years from the effective date and no certificates can be sold after July 1, 2014.

SECTION 190.304: WIRELESS 911 FOR SPRINGFIELD - Enables Springfield to choose from several options to enact a charge for wireless 911 services.

SECTIONS 620.472, 620.848 & 620.484: CREATES A TAX CREDIT FOR THIRD PARTY TRAINING AND RETRAINING - The credit will be equal to 50% of the amount paid to an approved third party training or retraining provider. The credit is capped at $500,000 per fiscal year, statewide. The credit may be transferred, carried forward 5 years and carried back 3 years.

SECTION 620.1039: QUALIFIED RESEARCH EXPENSES - Prohibits tax credits for qualified research expenses from being approved, awarded, or issued after January 1, 2005.

SA 1 - ADDS THE DOR SALES TAX LICENSING LANGUAGE FROM SB 1394

SA 2 - ADDS BARRY COUNTY TO THE 911 LANGUAGE

SA 3 - REGARDS COMPETITIVE BROADBAND SERVICES

SA 4 - MODIFIES THE SELECTION OF CHAIRS FOR THE JOINT COMMITTEE ON ECONOMIC DEVELOPMENT POLICY AND PLANNING

SA 5 - ADDS "COMMUNITY-BASED NOT-FOR-PROFIT ORGANIZATIONS THAT ARE ACCREDITED BY THE COUNCIL ON ACCREDITATION FOR REHABILITATION FACILITIES (CARF) THAT PROVIDE JOB TRAINING AND OTHER RELATED SERVICES" TO THE PROVISIONS OF 178.980

SA 6 -REGARDS LAND FILL FEES

SA 7 - ADDS A DISABLED HOME MODIFICATION TAX CREDIT

SA 1 TO SA 7 - SUBJECTS THE TAX CREDIT TO THE PROVISIONS OF THE TAX CREDIT ACCOUNTABILITY ACT OF 2004

SA 8 - ADDS ENDOWED RESEARCH CHAIRS TO THE ACT

SA 9 - ADDS VARIOUS PROVISIONS REGARDING THE KANSAS CITY SPORTS AUTHORITY

SA 1 TO SA 9 - MODIFIED THE ABOVE AMENDMENT

SA 2 TO SA 9 - FURTHER MODIFICATIONS
JEFF CRAVER