HB 1258 -- TAX CREDIT FOR CHILD CARE (Bland)

This bill authorizes several different tax credits for child
care.  In its main provisions, the bill:

(1)  Authorizes a state income tax credit equal to 10% of
certain expenditures made in making child care services
available to employees of the taxpayer.  To qualify for the
credit, the taxpayer must provide subsidized child care services
based on need, not discriminate based on race, creed, religion,
or national origin, and use a licensed child care facility.  Any
excess unused credit may be carried forward to future tax years;

(2)  Authorizes a state individual income tax credit equal to
any amount claimed as a credit for child and dependent care
expenses on the individual's federal income tax return;

(3)  Authorizes a child care credit against state individual
income tax liability equal to $400 for taxpayers with a
qualified spouse.  "Qualified spouse" is defined as a person
married to a taxpayer who receives no public assistance and who
is not employed in a trade or business and who is not providing
any service for hire.  The qualified spouse must also provide
the majority of supervision, instruction, and care to a
qualified dependent child; and

(4)  Establishes a Tobacco Settlement Trust Fund for depositing
proceeds from court awards or settlements received by the state
from tobacco manufacturers.  These funds are earmarked for
financing an income tax credit for child care service payments.

Residents who purchase child care services from child care
facilities meeting the statutory requirements for licensure
pursuant to chapter 210, RSMo., receive a credit against income
taxes due pursuant to chapter 143, RSMo., excluding the
withholding tax.  When the amount of the child care services
credit exceeds the tax liability, the difference will be
refunded to the taxpayer.  The taxpayer must file documentary
proof of payment with the taxpayer's return.  Filing of a false
claim for a credit is a class A misdemeanor.  This section has a
sunset provision effective December 31, 2023.

This bill has an effective date of January 1, 1999.

FISCAL NOTE:  Partial Estimated Net Loss to General Revenue Fund
is Unknown in FY 1999, $95,980,731 to $110,914,551 in FY 2000,
$98,038,627 to $113,420,462 in FY 2001.  Estimated Net Effect on
Tobacco Settlement Trust Fund* is Unknown in FY 1999, Unknown
less $145,000,000 in FY 2000 and FY 2001.  *Subject to
appropriation.

HB 1258 -- TAX CREDIT FOR CHILD CARE

SPONSOR:  Bland

COMMITTEE ACTION:  Voted "do pass" the Committee on Children,
Youth & Families by a vote of 15 to 0.

This bill authorizes a state income tax credit equal to 10% of
certain expenditures made in making child care service available
to employees of the taxpayer.  To qualify for the credit the
taxpayer must provide subsidized child care services based on
need, not discriminate based on race, creed, religion or
national origin, and use a licensed child care facility.

The credit may be taken for tax year 1999 and thereafter.  And
any excess unused credit may be carried forward to future tax
years.

FISCAL NOTE:  Estimated Net Loss to General Revenue Funds of $0
in FY 1999, $14,933,821 to $29,867,641 in FY 2000, and
$15,381,835 to $30,763,670 in FY 2001.

PROPONENTS:  Supporters say that this bill will give Missouri
businesses incentive to provide some type of child care services
to employees.  Providing child care services will reduce
employee absenteeism and aid in child development by allowing
parents to observe and visit with their children occasionally
during the work day.

Testifying for the bill were Representative Bland; Associated
Industries of Missouri; Missouri Chamber of Commerce; and
Maryann Pabst.

OPPONENTS:  There was no opposition voiced to the committee.

Julie Jinkens McNitt, Legislative Analyst

HB 1258 -- State Income Tax

Sponsor:  Bland

This bill authorizes a state income tax credit equal to 10% of
certain expenditures made in making child care service available
to employees of the taxpayer.  To qualify for the credit the
taxpayer must provide subsidized child care services based on
need, not discriminate based on race, creed, religion or
national origin, and use a licensed child care facility.

The credit may be taken for tax year 1999 and thereafter.  And
any excess unused credit may be carried forward to future tax
years.