SB 8 Modifies provisions of Missouri tax credit programs in accordance with recommendations made by the Missouri Tax Credit Review Commission Report
Sponsor: Mayer
LR Number: 0031L.15C Fiscal Note: 0031-07P.ORG
Committee: Jobs, Economic Development and Local Government
Last Action: 10/25/2011 - Requests to Recede or Grant Conference Calendar--SS for SCS for SB 8-Mayer, with HCS, as amended (Senate requests House recede and pass the bill) Journal Page:
Title: HCS SS SCS SB 8 Calendar Position: 1
Effective Date: Emergency Clause
House Handler: Tilley

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Current Bill Summary


HCS/SS/SCS/SB 8 - This act modifies provisions of existing tax credit programs and establishes new tax incentive programs.

TAX CREDITS TO ATTRACT SPORTING EVENTS

The act creates a refundable income and financial institutions tax credit which may be available for sports commissions, convention and visitors bureaus, certain nonprofit organizations, counties, and municipalities to offset expenses incurred in attracting sporting events to the state. Applicants for the tax credit must submit game support contracts to the department of economic development for approval. The tax credit will be equal to the lesser of five dollars for each admission ticket sold for the event or one hundred percent of eligible expenses incurred. No more than three million dollars in tax credits may be issued per fiscal year. The tax credits are fully transferrable, provided a notarized endorsement is filed with the Department of Economic Development. The Department of Economic Development is prohibited from certifying game support contracts after August 28, 2017, but may certify game support contracts prior to such date which pertain to games to be held after August 10, 2017.

The act also creates an income tax credit equal to fifty percent of the amount of an eligible donation made, on or after January 1, 2011, to a certified sponsor or local organizing committee for the purposes of attracting sporting events to the state. The tax credit may not be applied against withholding taxes. The tax credit is non-refundable, but may be carried forward four years. The tax credit is transferable. Certified sponsors and local organizing committees may apply to the department of economic development for the tax credits. Applications for tax credits must be accompanied by payment in an amount equal to the tax credits requested. The Department of Economic Development is prohibited from issuing more than ten million dollars in tax credits each fiscal year. The provisions of this act shall automatically sunset six years after the effective date of the act unless reauthorized.

DISTRESSED AREAS LAND ASSEMBLAGE TAX CREDITS

This act modifies the definition of the term "acquisition costs" to Include any portion of reasonable demolition costs of vacant structures, engineering costs, attorney's fees, and architectural and planning costs in the definition of "acquisition costs" and removes the 5 year time limitation on maintenance costs under the Distressed Area Land Assemblage Tax Credit. The definition of of the term "eligible project area" is expanded to include a tax increment finance redevelopment area that contains at least three hundred acres of real property with an excess of one million square feet of commercial building space and contains eighty or more parcels located within a low-income community. The act allows a 100% tax credit for reasonable demolition costs and removes the time period for qualifying interest costs under the program. Applicants will be allowed to apply for tax credits on a quarterly basis and tax credits provided under the program will be awarded on a first-come, first-serve basis. The annual cap on the issuance of distressed areas land assemblage tax credits is increased from $20 million to $30 million. The act limits the amount of tax credits available to certain eligible project areas to 50% of the annual issuance cap. The sunset on the program is extended from August 28, 2013 to August 28, 2016.

AEROTROPOLIS TRADE INCENTIVE AND TAX CREDIT ACT

For all taxable years beginning on or after January 1, 2011, the act authorizes air export tax credits for freight forwarders in an amount equal to thirty cents per chargeable kilo shipped on a qualifying outbound flight. In lieu of the previously mentioned tax credit, a freight forwarder will be entitled to an air export tax credit equal to thirty-five cents per chargeable kilo if the shipment contains perishable freight. The department of economic development is required to adjust the tax credit amounts based upon fluctuations in fuel costs for over-the-road transportation. In order to receive air export tax credits, freight forwarders must file an application with the department containing the master airway bill for the shipment. The act requires the department to establish procedures to allow freight forwarders to receive air export tax credits within ten business days of the departure of the qualifying flight.

The total amount of air export tax credits which may be authorized under the act cannot exceed sixty million dollars. The act establishes annual caps on issuance of air export tax credits, and to the extent that in any given year more tax credits are authorized than may be issued, the amount in excess of the cap on issuance will be carried forward for issuance in the following year. The authorization of air export tax credits is prohibited after August 28, 2019, but the act allows for the subsequent issuance of any tax credits which are authorized prior to such date.

All tax credits provided under the act will be fully transferrable and non-refundable, but may be carried forward up to six years.

DEVELOPMENTAL DISABILITY CARE PROVIDERS TAX CREDITS

The act creates an income tax credit equal to fifty percent of the amount of an eligible donation made, on or after January 1, 2011, to a qualifying developmental disability care provider. The tax credit may not be applied against withholding taxes. The tax credit is non-refundable, but may be carried forward four years. The tax credit is transferable. A provider may apply to the Department of Revenue for the tax credits. The provisions of this act shall automatically sunset six years after the effective date of the act unless reauthorized.

DATA CENTERS

The act authorizes state and local sales and use tax exemptions for new and expanding data centers and permits donation lease agreements between municipalities and data center projects.

MISSOURI HOUSING DEVELOPMENT COMMISSION

The act subjects the operating budget of the Missouri Housing Development Commission to appropriation.

SPECIAL NEEDS ADOPTION TAX CREDITS

The act makes international adoptions ineligible for special needs adoption tax credits.

LOW-INCOME HOUSING TAX CREDITS

The act establishes a one hundred ten million dollar cap for authorizations of 9% low-income housing tax credits for all fiscal years beginning on or after July 1, 2011. Authorizations of 4% low-income housing tax credits are capped at twenty million dollars for all fiscal years beginning on or after July 1, 2011.

The stacking of state 9% low-income housing tax credits with state historic preservation tax credits for the same project is prohibited. The carry-back for low-income housing tax credits is reduced from three years to two years.

WINE AND GRAPE PRODUCER TAX CREDITS

Beginning January 1, 2012, the authorization of wine and grape producer tax credits will be limited to no more than two hundred thousand dollars each year.

RESIDENTIAL TREATMENT AGENCY TAX CREDITS

Under current law, residential treatment agencies are prohibited from applying for residential treatment agency tax credits in an amount greater than forty percent of the payments received by the agency from the Department of Social Services. This act would allow residential treatment agencies to apply for such tax credits in an amount which does not exceed the amount of payments received by the agency from the Department of Social Services. The act also broadens the definition of the term "taxpayer" as it relates to the residential treatment agency tax credit program.

HISTORIC PRESERVATION TAX CREDITS

Under current law, the Department of Economic Development is prohibited from issuing more than one hundred forty million dollars in historic preservation tax credits in any fiscal year for projects which will receive more than two hundred and seventy-five thousand dollars in tax credits. Beginning fiscal year 2012, and each fiscal year thereafter, this act would prohibit the Department of Economic Development from approving more than eighty million dollars in historic preservation tax credits increased by the amount of any recisions of approved applications for tax such credits. Projects which would receive less than two hundred seventy-five thousand dollars in tax credits will be subject to a ten million dollar fiscal year cap.

Non-Income Producing Residential Projects:

The act prohibits the department from issuing more than one hundred twenty-five thousand dollars in historic preservation tax credits per project for non-income producing residential rehabilitation projects.

Transition Rules:

Applicants for projects that, as of the effective date of the act, have: received approval from the department of economic development; incurred certain levels of expenses; or received certification from the state historical preservation officer will not be subject to the new limitations on tax credit issuance, but will be subject to the current law limitations on tax credit issuance.

Stacking:

The act also prohibits the stacking of state historic preservation tax credits with state 9% low-income housing tax credits. Historic preservation tax credits will now be capable of being carried back one year or forward five years.

Cost certifications and tax credit issuance:

The act requires historic preservation tax credit applications to include a cost certification performed by a licensed certified public accountant. Within one hundred twenty days following receipt of a tax credit application and cost certification, the department of economic development must issue the lesser of seventy-five percent of the amount of tax credits

certified as eligible under the cost certification or the amount of tax credits the project was preliminarily approved to receive.

For taxpayers receiving an initial tax credit issuance, the department of economic development must determine the final amount of tax credits available for the project and, if applicable, issue any remaining credits. Additional cost certification requirements and recapture provisions are created for projects which claim accrued developer fees as eligible costs for tax credits.

BROWNFIELD REMEDIATION TAX CREDITS

The act prohibits the authorization of more than forty million dollars in Brownfield remediation tax credits in each fiscal year for FY 2012 - FY 2015. Beginning in FY 2016, no more than thirty-five million dollars in Brownfield remediation tax credits may be authorized in each fiscal year. The act prohibits the authorization of more than ten million dollars in Brownfield tax credits each fiscal year, for FY 2012 - FY 2015, for projects that receive benefits under the Distressed Areas Land Assemblage program. Beginning FY 2016, no more than five million dollars in Brownfield tax credits may be authorized each fiscal year for projects that receive benefits under the Distressed Areas Land Assemblage program.

MO JOBS TRAINING PROGRAM

The act establishes the MO Jobs Training Program which will provide financial assistance for job training for new jobs created by qualified companies. Financial assistance will also be available to business and technology centers established by Missouri community colleges, or state-owned postsecondary technical colleges, to provide business and training services for growth industries. The act provides for the diversion of withholding taxes from new or retained jobs of qualified companies to pay costs incurred by new or retained jobs training projects administered by local educational agencies such as community and technical colleges.

The provisions of the act creating the MO Jobs Training Program will automatically sunset July 1, 2018, unless reauthorized

MISSOURI QUALITY JOBS

Provisions of the Missouri Quality Jobs Act are modified to provide additional benefits for job retention projects. In lieu of all other job retention benefits currently available under the Quality Jobs Act, a qualified company may be eligible to retain one hundred percent of withholding taxes for all full-time employees for up to ten years, if such company retains at least one hundred and twenty-five jobs over a ten year period and within two years makes capital investment at the facility equal to no less than three times the amount of benefits received. The department of economic development is prohibited from authorizing the retention of withholdings taxes in excess of six million in any fiscal year.

In addition, a qualified company may elect to receive refundable tax credits equal to eighty percent of withholdings taxes for full-time employees that such company could otherwise retain over a five-year period. Such tax credits will be subject to appropriation. The department of economic development is prohibited from awarding an amount of job retention benefits to any project which would exceed the net state benefit of the project.

The act creates a alternative benefit to all other quality jobs benefits for qualified companies in the form of a tax credit equal to seven percent of new payroll or if the qualified company is in a targeted industry tax credits equal to nine percent of new payroll. In either case, the benefit cannot exceed the projected net fiscal benefit to the state over a ten year period. The department is prohibited from authorizing more than ten million dollars in such tax credits annually. Prior to awarding such tax credits, the department must inform the president pro tem of the senate and the speaker of the house of representatives of the amount of the award, the projected net fiscal benefit to the state, the location of the facility, and the number of new jobs and wages.

SUNSET PROVISIONS FOR CERTAIN TAX CREDIT PROGRAMS

Due to the Tax Credit Review Commission's recommendation that reforms to programs be made on a prospective basis, rather than utilizing traditional sunset provisions, this act prohibits the authorization of Brownfield Jobs and Investment Tax Credits, Development Tax Credits, and Neighborhood Preservation Tax Credits after the effective date of the act.

The authorization of tax credits under the following programs will be prohibited after August 28, 2015:

1) The Pregnancy Resource Center Tax Credit;

2) The Residential Treatment Agency Tax Credit;

3) The Food Pantry Tax Credit;

4) The Children in Crisis Tax Credit; and

5) The Residential Dwelling Access Tax Credit.

Where, under current law, a tax credit was subject to the sunset act, the sunset provision is modified to sunset such program on the date provided above.

The limitations on tax credit authorizations provided in the act will not impair an administering agencies ability to issue tax credits that were authorized prior to the date on which authorizations are prohibited, nor will they affect a taxpayer's ability to redeem such tax credits.

REPEAL OF CERTAIN TAX CREDIT PROGRAMS

This act repeals the following tax credit programs:

1) The Charcoal Producers Tax Credit;

2) The Self-Employed Health Insurance Tax Credit; and

3) The Health Care Access Fund Tax Credit.

Provisions contained in this act are similar to provisions contained in the SS/SCS/HCS/HB's 116 & 316 (2011). This act contains an emergency clause.

JASON ZAMKUS

HA 2 - ALLOWS THE GENERAL ASSEMBLY TO PROHIBIT THE APPROVAL OF QUALIFIED MISSOURI PROJECTS FOR HISTORIC PRESERVATION TAX CREDITS AND LOW-INCOME HOUSING TAX CREDITS BY A CONCURRENT RESOLUTION PASSED IN THE 2016 CALENDAR YEAR AND EVERY FOURTH YEAR THEREAFTER. SUCH A RESOLUTION WILL NOT TAKE EFFECT UNTIL THE FIRST DAY OF THE FISCAL YEAR FOLLOWING THE FISCAL YEAR IN WHICH THE RESOLUTION WAS ADOPTED.

HA 3 - PLACES A FIVE MILLION DOLLAR FISCAL YEAR CAP ON DEVELOPMENTAL DISABILITY CARE PROVIDER TAX CREDITS AND REQUIRES THE DIRECTOR OF THE DEPARTMENT OF REVENUE TO ESTABLISH A PROCEDURE TO APPORTION TAX CREDITS AMONG ALL TAXPAYERS CLAIMING CREDITS.

HA 4 - REDUCES THE CORPORATE INCOME TAX RATE TO FIVE AND ONE-HALF PERCENT OF MISSOURI TAXABLE INCOME BEGINNING JANUARY 1, 2012.

HA 5 - ALLOWS FOR COMMERCIAL PROPERTY WHICH IS DESTROYED BY A NATURAL DISASTER TO BE REMOVED FROM THE CURRENT YEAR'S PROPERTY TAX BOOK. ONCE A CERTIFICATE OF OCCUPANCY IS ISSUED FOR SUCH PROPERTY OR THE ASSESSOR DETERMINES THE PROPERTY IS SUITABLE FOR COMMERCIAL USE, THE PROPERTY WILL BE RETURNED TO THE TAX ROLLS.

HA 6 - REPEALS THE SUNSET PROVISION ON THE FOOD PANTRY TAX CREDIT PROGRAM WITHOUT IMPOSING ANY NEW SUNSET DATE.

HA 1 TO HA 6 - REPEALS THE SUNSET PROVISION ON THE PREGNANCY RESOURCE TAX CREDIT PROGRAM WITHOUT IMPOSING ANY NEW SUNSET DATE.

HA 7 - REMOVES ALL MODIFICATIONS CONTAINED IN THE BILL REGARDING THE TERM "ACQUISITION COSTS" FOR THE DISTRESSED AREAS LAND ASSEMBLAGE ACT EXCEPT FOR THE REMOVAL OF THE FIVE YEAR LIMITATION ON REASONABLE MAINTENANCE COSTS AND REPEALS THE DEFINITION OF THE TERM "CONDEMNATION PROCEEDINGS".

HA 1 TO HA 7 - REMOVES THE REPEAL OF THE TERM "CONDEMNATION PROCEEDINGS" FROM THE AMENDMENT.

HA 8 - MODIFIES THE QUALITY JOBS ACT DEFINITION OF THE TERM "SMALL AND EXPANDING BUSINESS PROJECT" BY REDUCING JOB CREATION REQUIREMENTS FROM TWENTY JOBS IN A RURAL AREA TO TEN JOBS AND FORTY JOBS IN NON-RURAL AREAS TO TWENTY JOBS OR TWO JOBS IF THE PROJECT IS LOCATED IN AN ENHANCED ENTERPRISE ZONE.

HA 1 TO HA 8 - MAKES THE JOB CREATION REQUIREMENT FOR SMALL AND EXPANDING BUSINESS PROJECTS TEN JOBS FOR EITHER RURAL OR NON-RURAL AREAS.

HA 10 - CHANGES THE TIME REQUIREMENT FOR FINAL TAX CREDIT ISSUANCE OF HISTORIC PRESERVATION TAX CREDITS BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT AND ALLOWS RECAPTURE OF TAX CREDITS IN THE EVENT THE INITIAL TAX CREDIT ISSUANCE EXCEEDS ELIGIBLE AMOUNTS. THE AMENDMENT ALSO CREATES A THIRD-PARTY APPEALS PROCESS FOR OFFICIAL DECISIONS REGARDING HISTORIC PRESERVATION TAX CREDITS.

HA 1 TO HA 10 - REPLACES CERTAIN REFERENCES TO JULY 1, 2011 WITH THE EFFECTIVE DATE OF THIS ACT.

HSA 1 TO HA 12 - CREATES A "MADE IN THE USA" SALES TAX HOLIDAY. THE SALES TAX HOLIDAY WILL LAST FOR THE SEVEN DAY PERIOD FROM JULY 1ST TO JULY 7TH. THE EXEMPTION WILL BE FOR THE FIRST FIFTEEN THOUSAND DOLARS OF EACH PURCHASE OF A MADE IN THE USA PRODUCT, BUT WILL NOT APPLY TO MOTOR VEHICLE SALES. POLITICAL SUBDIVISIONS MAY OPT-IN TO ALLOW THE SALES TAX HOLIDAY TO APPLY TO THEIR LOCAL SALES TAXES.