SB 215 Modifies various provisions of law relating to taxation
Sponsor: Shields
LR Number: 0321L.04C Fiscal Note: 0321-04
Committee: Ways and Means
Last Action: 5/15/2009 - S Calendar S Bills with H Amendments--SB 215-Shields, with HCS, as amended Journal Page:
Title: HCS SB 215 Calendar Position: 2
Effective Date: August 28, 2009
House Handler: Flook

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Current Bill Summary


HCS/SB 215 - This act establishes the procedure to establish a port improvement district.

ESTABLISHMENT OF A PORT IMPROVEMENT DISTRICT - This act establishes the Port Improvement District Act. Under the terms of the act, a port authority may establish a port improvement district within its boundaries for the purpose of funding qualified project costs. The port authority board must hold public hearings on whether to create port improvement district. After the public hearing, the board may approve the petition to create a district by resolution. The port authority board must file a petition in circuit court requesting the creation of a port improvement district. Within 30 days of the circuit court's certification of the petition and establishment of the district, the board must file a copy of the board's resolution approving the petition, the certified petition and the court's judgment certifying and establishing the district with the Missouri Highways and Transportation Commission.

CONTENTS OF PETITION TO CREATE A DISTRICT - The act sets forth what information the petition must contain in order to be certified by the circuit court. For example, the petition must set forth a legal description of the district, the district's name, the maximum rate and duration of any proposed real property or sales tax, and the estimated revenues projected to be generated from such taxes.

PUBLIC HEARING ON PROPOSED PETITION - The act establishes the notice requirements the port authority board must follow prior to submitting the petition to the circuit court. A public hearing must be held on the proposed projects, proposed real property or sales taxes, and the establishment of the district. The act requires notice to be provided by both publication and mailing.

CIRCUIT COURT HEARING PROCEDURE - The act establishes the procedure in which the circuit court must conduct certification hearing. A copy of the petition must be served on all of the respondents (property owners, political subdivisions, etc.). The respondents will have 30 days after receipt of service to file an answer stating agreement with or opposition to the creation of the district. The court will the hear the case without a jury. The parties may appeal a circuit court's order in the same manner provided for other appeals.

NOTICE TO PUBLIC FOR CIRCUIT COURT HEARING - The act also establishes how the circuit clerk must provide notice to the public of the circuit court hearing. The statutory notice shall be published in a newspaper of general circulation once a week for four consecutive weeks.

TERMINATION OF DISTRICT - The act establishes a procedure in which a port improvement district may be terminated. The district may be terminated by a board resolution provided that there are no outstanding obligations secured by district revenues. Public hearings must be held before a district is terminated.

REAL PROPERTY TAX AUTHORIZED - SUBMISSION TO QUALIFIED VOTERS - Under the terms of the act, the port authority may levy a real property tax provided the qualified voters approve the tax by mail-in ballot. The act sets forth the sample ballot language. The act also establishes the procedure in which the real property taxes are collected and distributed.

SALES AND USE TAX AUTHORIZED - SUBMISSION TO QUALIFIED VOTERS - Under the terms of the act, the port authority may levy sales and use taxes within the district in increments of one-eight of one percent, up to a maximum of one percent provided the sales and use tax is approved by the qualified voters in a mail-in ballot election. The act establishes a procedure for collecting and distributing the sales and use tax. Revenues generated from the sales and use tax must be deposited into a special trust fund. Port authorities may repeal by resolution any sales and use tax unless the repeal would impair the port authority’s ability to repay any obligations the port authority has incurred to pay qualified project costs of the district.

ELECTION PROCEDURE FOR REAL PROPERTY AND SALES TAX - The act sets forth an election procedure that must be followed for any proposed real property tax or sales and use tax. After the board has passed a resolution approving the levying of a tax, the board must provide written notice of the resolution, along with the circuit court's certified question regarding the tax, to the election authority. After receiving the written notice of the resolution and the court's certified question, the election authority must specify a date upon which the election shall occur. In addition, the election authority must publish notice of the election in a newspaper of general circulation. The election authority must mail ballots to the qualified voters. Each qualified voter shall have one vote. The act requires the port authority to reimburse the election authority for the costs incurred to conduct an election. A port authority may propose a real property tax and a sales and use tax question to the district's qualified voters in the same election.

STATUTE OF LIMITATIONS FOR CHALLENGING VALIDITY OF DISTRICT'S CREATION OR VALIDITY OF TAXES - Under the terms of the act, no lawsuit to set aside an established district or a tax shall be brought after the expiration of 90 days from the effective date of the resolution establishing such district in question or the effective date of the resolution levying such real property or sales tax.

ANNUAL REPORTS BY PORT AUTHORITIES - The act requires port authorities that have formed port improvement districts to file reports with the Department of Transportation and the local political subdivision in which the district was formed stating the services provided, the revenues collected and expenditures made by the district during the fiscal year. The port authority must submit an annual report of the district's financial transactions to the state auditor.

A petition to create a port improvement district must be signed by the property owners collectively owning more than 60% per capita of all owners of real property within the boundaries of the proposed district.

The act provides that the state auditor shall have the power to audit port authorities.

Under the act, any expenditure by a port authority that is over $25,000 must be competitively bid.

These provisions are contained in the perfected version of SB 215 (2009).

BUILD TAX CREDITS (Sections 100.710, 10.760, and 100.850)

The act removes the requirement that applicants for the BUILD program consider locating within another state and state that a disparity in costs exist between such state and Missouri. The requirement of creation of five hundred new jobs for economic development projects which are an office industry located within a distressed community is decreased to one hundred new jobs. The annual limit on BUILD tax credit authorizations is increased from fifteen million to twenty-five million dollars.

BUSINESS FACILITY TAX CREDITS (Section 135.115)

The act allows headquarters facilities to receive tax credits for new or expanded business facilities for expansions done before January 1, 2020. At least twenty-five new employees and at least one million dollars in new investment must be attributed to such expansion. Buildings on multiple, non-contiguous property will be considered one facility if the buildings are within the same municipality.

NEW MARKETS TAX CREDITS (Section 135.680)

Under current law, the department of economic development is required to limit the monetary amount of qualified equity investments to a level necessary to limit tax credit utilization to no more than fifteen million dollars annually. Following fiscal year 2010, no equity investments may be made unless reauthorization is provided by enactment of a general law by the general assembly.

This act would require the department to limit the monetary amount of qualified equity investments to a level necessary to limit tax credit utilization to no more than twenty-five million dollars annually. The requirement for reauthorization by enactment of a general law by the general assembly is moved back two fiscal years to fiscal years following fiscal year 2012.

FAMILY DEVELOPMENT ACCOUNT (Section 208.770)

Under current law, the department of economic development is prohibited from authorizing more than four million dollars in tax credits per fiscal year for contributions to the Missouri family development account. Beginning FY 2010, the department will be limited to authorizing no more than three hundred thousand dollars each fiscal year for such contributions.

LICENSING BY THE STATE BOARD OF PHARMACY (Section 338.337)

Under current law, any out-of-state wholesale drug distributor, that is a drug manufacturer which produces and distributes from a facility which has been inspected and approved by the FDA within the last two years and is licensed by the state in which such facility is located, need not be licensed by the state board of pharmacy. This act would exempt any out-of-state wholesale drug distributor, that is a drug manufacturer which produces and distributes from a facility which has been inspected and approved by the FDA and is licensed or authorized to operate and in good standing in the state in which such facility is located, from the requirement that it be licensed by the board of pharmacy.

ANGEL INVESTMENT TAX CREDITS (Sections 348.273 and 348.274)

The Department of Economic Development will be allowed to authorize up to five million dollars in tax credits tax credits per fiscal year to encourage equity investment in technology-based early stage Missouri companies, commonly referred to as angel investments. Investors who contribute the first five hundred thousand dollars in equity investment to a qualified Missouri business may be issued a tax credit equal to thirty percent of the investment or forty percent of the investment if the qualified business is located in a rural area or distressed community. An investor can receive a credit of up to fifty thousand dollars for an investment in a single qualified business and up to one hundred thousand dollars for investments in more than one qualified business per year. Tax credits for equity investment in technology-based early stage Missouri companies may be carried forward for up to three years or transferred.

SMALL BUSINESS INCUBATORS TAX CREDITS (Section 620.495)

The aggregate cap on small business incubator tax credit authorization is increased from five hundred thousand dollars to one million per tax year.

QUALIFIED RESEARCH EXPENSE TAX CREDITS (Section 620.1039)

The act modifies provisions of law which authorize a tax credit for qualified research expenses. The tax credit will be equal to ten percent of qualified research expenses incurred during the taxable year unless such expenses were incurred in a distressed community, in which case the credit will be equal to twenty-five percent of such expenses. Eligibility for receipt of the tax credit is limited to taxpayers with less than two hundred twenty-five employees, seventy-five percent of which must be employed within the state. Such taxpayers must be engaged, on a for-profit basis, in the development of medical instruments and devices, medical diagnostics and therapeutics, plant science products, or pharmaceutical or veterinary products with agricultural applications in order to receive the credit. Under current law, no qualified research expense tax credits may be approved, awarded or issued after January 1, 2005. This act removes the prohibition on approval and issuance of tax credits and provides that for each fiscal year beginning FY 2010, no more than three million dollars tax credits for qualified research expenses may be authorized. No less than two million dollars in tax credits must be made available for qualified research expenses incurred in a distressed area. No more than five hundred thousand dollars may be issued annually per taxpayer unless such taxpayer incurred the qualified research expenses in a distressed community in which case such taxpayer may not receive more than one million dollars in tax credits annually. No taxpayer may simultaneously receive tax credits under this tax credit program and the newly created tax credit in section 620.1041 of this act. No tax credits for qualified research expenses may be authorized after June 30, 2015.

QUALIFIED RESEARCH EXPENSES TAX CREDITS (Section 620.1041)

The act creates a new tax credit for qualified research expenses. The amount of the tax credit will be based upon the increase in a taxpayer's qualified research expenses over an average of the three preceding year's expenses. A taxpayer can receive a tax credit equal to: three percent of the amount of increased expenses which do not exceed two million five hundred thousand dollars; five percent of the amount of increased expenses which exceed two million five hundred thousand but do not exceed five million dollars; and seven and one half percent of the amount of increased expenses which exceed five million dollars. No more than seven million dollars in tax credits for qualified research expenses may be authorized in each fiscal year beginning FY 2010. Qualified research expenses will be limited to those incurred in the research and development of agricultural biotechnology, plant genomics products, diagnostic and therapeutic medical devices, prescription pharmaceuticals consumed by humans or animals, and electronic patient health records. Expenses incurred in the research, development, or manufacturing of power system technology for aerospace, space, defense, alternative energy, alternative energy vehicles, or implantable or wearable medical devices are also permitted. The department director may allow a taxpayer to transfer up to forty percent of the tax credits issued, but not yet claimed, between January 1, 2010, and December 31, 2016. The Director of the Department of Economic Development must act between August 1 and August 15th on tax credit applications filed between January 1 and July 1st for claims from the previous year. A formula is provided by which tax credits will be issued if the eligible claims for the credits exceed the amount of tax credits available. No one taxpayer can be issued more than thirty percent of the total amount of tax credits authorized in any calendar year. Taxpayers are prohibited from simultaneously receiving benefits under this program and the other qualified research tax credit program contained in the act. No tax credits for qualified research expenses may be authorized after June 30, 2015.

QUALITY JOBS (Sections 620.1878 and 620.1881)

The act specifies how the department must apply certain definitions when a business that has already received an approved notice of intent later files another notice of intent and eliminates the per-company annual cap on technology business projects. The act modifies the quality jobs act definition of the term "project facility" to include separate buildings located within fifteen miles of each other or within the same county and requires that for high impact projects, where such facilities are located within two adjacent counties, the new payroll must equal or exceed the higher county wage of the two counties. Companies which file for, or publically announce intentions to seek, bankruptcy protection in the form of a reorganization between January 1, 2009 and January 1, 2011, may be eligible as qualified companies under the quality jobs act provided certain conditions are met. The definition of the term "technology business project" is modified to include clinical molecular diagnostic laboratories focused on detecting and monitoring infections in immunocompromised patient populations. The per project caps for technology business projects and high impact projects are removed. Under current law, no more than sixty million dollars in quality jobs tax credits may be issued annually. This act limits annual issuance of quality jobs tax credits to no more than one hundred million dollars.

JASON ZAMKUS