HB 191 Creates various tax incentives for job development

Current Bill Summary

- Prepared by Senate Research -


SS#2/SCS/HCS/HB 191 - This act modifies several provisions of law regarding taxation.

NEIGHBORHOOD ASSISTANCE ACT (Section 32.105)

Under current law, persons or families are eligible to qualify for assistance from the Missouri Housing Development Commission under the Neighborhood Assistance Act for an affordable housing unit if the household's combined, adjusted gross income of the individual or family is equal to or less than certain statutory percentages of the median family income for the geographic area in which the residential unit is located or the median family income for the state, whichever is larger. Under this act, the current statutory income thresholds are applied to rental units while the act creates more favorable income percentage thresholds for owner-occupied units. The act doubles the current statutory income percentage thresholds for persons residing in owner-occupied units. For example, a one person household making 35% or less of the family median income is eligible for assistance under the Neighborhood Assistance Act for a rental unit, while a one person household making 70% or less of the family median income is eligible for assistance under Neighborhood Assistance Act provided the person resides in a owner-occupied unit.

MISSOURI ACCOUNTABILITY PORTAL (Section 37.050)

The Commissioner of the Office of Administration shall maintain the Missouri Accountability Portal website to provide the public with information on an easy-to-search database of financial transactions relating to the purchase of goods and services and the distribution of funds for state programs

TAX INCREMENT FINANCE (Section 99.865)

Any municipality which fails to provide the statutorily required report to the department of economic development will be prohibited from implementing any new tax increment finance project for a period of no less than five years from the date of failure to comply. The State Auditor is required to make information on municipal tax increment finance projects available to the public in a searchable database on the Auditor's website.

DISTRESSED AREAS LAND ASSEMBLAGE TAX CREDITS (Section 99.1205)

The annual limit on tax credit issuance of distressed areas land assemblage tax credits is increased from ten million dollars to twenty million dollars.

INFRASTRUCTURE DEVELOPMENT FUND CONTRIBUTION TAX CREDITS (Section 100.286)

Under current law, the Missouri Development Finance Board is prohibited from issuing the greater of ten million dollars or an amount equal to five percent of growth in general revenue receipts for the preceding three years in Missouri Development Finance Board Infrastructure Development Fund Contribution Tax Credits annually unless the Commissioner of Administration, the director of the Department of Economic Development, and the director of the Department of Revenue agree to exceed such limit. This act limits the authorization or approval of infrastructure and development contribution credits to no more than ten million dollars annually. The limitation on authorization and approval of infrastructure development fund contribution tax credits may only be exceeded by a signed and notarized letter evidencing mutual agreement by the Commissioner of Administration, the director of the Department of Economic Development, and the director of the Department of Revenue, provided that in such case no more than twenty-five million dollars in tax credits may be authorized in such year. Taxpayers must file an application with the department of economic development for infrastructure development contribution tax credits.

BUILD TAX CREDITS (Sections 100.760, 100.770, 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 annual limit on BUILD tax credit authorizations is increased from fifteen million to twenty-five million dollars.

TRANSPORTATION DEVELOPMENT DISTRICTS (Sections 105.145, 238.207, 238.212, and 238.235)

The act requires the circuit court to order a public hearing on the creation and funding of a proposed transportation development district, if the petition to create such district was filed by the owners of all real property within the proposed district. The director of the Department of Revenue will perform all functions incident to the administration, collection, enforcement, and operation of transportation development district sales taxes. The board of directors of every transportation development district is required to annually submit a report of financial transactions to the state auditor. Failure to timely file such a report by a transportation development district will result in the imposition of a fine not to exceed five hundred dollars per day. Petitions to create transportation development districts must include details of the budgeted expenditures, including estimated expenditures for real physical improvements, estimated land acquisition expenses, estimated expenses for professional services, and estimated interest charges.

BUILD AMERICA BONDS (Sections 108.1000, 108.1010, and 108.1020)

The act authorizes the department of economic development to allocate bonds for counties and large municipalities to issue for the purpose of funding qualifying local projects.

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.

LOW-INCOME HOUSING TAX CREDITS (Section 135.352)

No more than six million dollars in four percent low-income housing tax credits may be authorized each fiscal year.

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. 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.

SMALL BUSINESS GUARANTEE FEE TAX CREDITS (Section 135.766)

No small business guaranty fee tax credits may be authorized on or after the thirtieth day following the effective date of the act.

TAX CREDIT ACCOUNTABILITY ACT (Sections 135.800, 135.802, and 135.805)

The act modifies provisions of the Tax Credit Accountability Act of 2004 to require tax credit recipients to report job creation resulting from tax credit utilization. The act requires the Department of Economic Development to make certain tax credit utilization information available on the department's website and the Missouri Accountability Portal.

CORPORATE FRANCHISE TAX (Section 147.010)

Under current law, corporations with outstanding shares and surplus in excess of one million dollars are subject to an annual franchise tax equal to one-thirtieth of one percent of its outstanding shares and surplus. This amendment would subject only those corporations with outstanding shares and surplus in excess of ten million dollars to the annual franchise tax.

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.

HISTORIC PRESERVATION TAX CREDITS (Sections 253.545, 253.550 and 253.559)

For the period beginning January 1, 2010, but ending June 30, 2010, the Department is prohibited from issuing more than seventy million dollars in historic preservation tax credits for large projects. Beginning fiscal year 2011, and each fiscal year thereafter, the department is prohibited from issuing more than one hundred forty million dollars in tax credits increased by the amount of any recisions of approved applications of tax credit. No more than one hundred fifty million dollars in historic preservation tax credits may be authorized each fiscal year beginning FY 2010. No more than twenty-five thousand dollars in historic preservation tax credits may be awarded per project for residential rehabilitation projects. Applicants for projects, which have incurred certain levels of expenses or received certification from the state historical preservation officer on or before the thirtieth day following the effective date of the act will not be precluded from receiving tax credit authorization. The act creates a preliminary approval process for historic preservation tax credits.

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.

BROWNFIELD REDEVELOPMENT TAX CREDITS (Section 447.708)

The act allows for the release of a prorated amount of tax credits upon receipt of a letter of completion, for a portion of a project, from the Department of Natural Resources.

OPEN RECORDS LAW (Section 610.021)

The act modifies Missouri's Open Records law by authorizing the closing of records submitted by an individual, corporation, or other business entity to a public institution of higher education in connection with a proposal to license intellectual property or perform sponsored research and which contains sale projections or other business plan information.

DEPARTMENT OF ECONOMIC DEVELOPMENT RECORDS & CONTRACTS (Sections 620.014, and 620.017)

Records pertaining to a business project with which the Department of Economic Development, the Economic Development Export Finance Board, or a regional planning commission may be deemed closed records. Department of economic development contracts must include a requirement for reporting of job creation as a result of tax credit utilization and such information must be made available by the department on the Missouri accountability portal.

NEW AND EXPANDING INDUSTRY TRAINING (Section 620.472)

The Department of Economic Development is allowed to include pre-employment training in its new or expanding industry training. The act specifies what services may be provided including development of training plans, the provision of training through qualified training staff, fees for training professionals, and transportation expenses if the training can be more effectively provided outside the community where the jobs will be located. Any assistance provided which does not result in an increase in employment within one year from the date the department provides such assistance will be subject to a claw-back provision.

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. Benefits received under the Quality Jobs Act by a taxpayer who subsequently files for bankruptcy for liquidation purposes will be subject to recapture. 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 eighty million dollars.

THE BIG GOVERNMENT GET OFF MY BACK ACT (Section 1)

Increases in user fees imposed by the state are prohibited for a four year period beginning on the effective date of the act. New regulations including administrative costs, fees, and procedures for obtaining a small business license may not be created for a period of no more than four years from the effective date of the act.

The act contains an emergency clause for the repeal and re-enactment of the new markets tax credit provision contained in the act.

JASON ZAMKUS


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