- Introduced -
SB 1048 - This "Tax Credit Responsibility Act" modifies several tax credit programs administered by the Department of Economic Development to promote the responsible use of incentives and concentrate efforts on those programs that produce the greatest benefit for the state. Ineffective or duplicative programs are repealed.
The carry-forward provisions of all tax credit programs is now 5 years. A notice must be filed with the Department of Economic Development prior to the transfer or sale of tax credits.
COMMUNITY AND SMALL BUSINESS DEVELOPMENT - The amount of tax credits available for qualified investment in small businesses in section 135.400 to 135.430, RSMo, is changed from $13 million to $9 million annually with $4 million annually set aside for investments in small businesses located in distressed communities. The Department of Economic Development may pro rate revocation or repayment of the tax credits for investment in qualified small businesses for early disinvestment. The $100,000 limit on tax credits for investment by a single investor is removed.
A "Community Based Organization" implementing the "Family Development Account" program may be any not-for-profit corporation.
The aggregate amount of tax credits for qualified research expenses is changed $10 million in any taxable year to $11 million per year.
The tax credit available for "brownfield" remediation activities on abandoned properties may now be used to offset 100% of demolition costs if the project is part of a redevelopment plan that is approved by the local government entity and the Department of Economic Development.
The "Rebuilding Communities and Neighborhood Preservation Act" in section 135.475, RSMo, is renamed the "Neighborhood Preservation Act". This act clarifies that the tax credit for rehabilitation and construction of residences in distressed communities is not available to not-for-profit corporations. The Director may reallocate credits after July 1 each year to maximize rehabilitation benefit for the state.
The tax credit available for transportation development projects in distressed communities is modified to be "up to" 50% instead of 50%, and the credits allowed are decreased from $10 million per year to $5 million per year. Clarification is included that not-for-profit entities are not eligible.
GENERAL ECONOMIC DEVELOPMENT PROGRAMS - This act changes the New and Expanding Business Facility tax credit program to allow the credit to be used for targeted industries. The Director of the Department of Economic Development has the discretion to authorize applications for the program.
Three conflicting versions of Enterprise Zone law have been reconciled in this act. The Director also has the discretion to authorize applications for the program.
For all relevant sections, references to the "Standard Industrial Classification System" (SIC) have been changed to the "North American Industrial Classification System" (NAICS) which is currently used by the federal government.
This act clarifies that the right to claim New Business Facility or Enterprise Zone tax credits vests with the commencement of operations at the facility. The right to credits is waived for any tax year in which the business does not meet qualification criteria.
After January 1, 2001, the Director of the Department of Economic Development may grant or deny applications and claims for a tax credit at his or her discretion.
The wine and grape tax credit program is changed to allow the Department discretion in awarding credits.
JOB TRAINING - Jobs created by the health care and professional services industry may now qualify for the "New Jobs Training Program". Administrative costs related to program administration are limited to be between 10% and 15% of total program cost.
Businesses may create a consortium for a common type of job training for participation in a the Job Training Program in sections 620.470 to 620.481, RSMo. Basic industry retraining may be provided pursuant to other types of investment, rather than solely capital investment. The requirement to contract with the Department of Elementary and Secondary Education to provide training services through the "Job Development Training Fund" is removed.
The "Individual Training Account Program" in sections 620.1400 to 620.1460 is combined with the "Mature Workers" program to provide training in high demand industries. The Department of Economic Development will conduct an independent evaluation of the "Individual Training Account Program" every 2 years beginning in 2003.
OTHER - This act repeals the Seed Capital Tax Credit which was replaced in 1999 with the New Enterprise Creation Act Seed Capital Program.
The exemption from sales tax available to life sciences companies for the purchase of equipment for research activities is repealed.
The tax credit for small business guaranty fees is also repealed.
The 50% tax credit issued by the Missouri Development Finance Board for contributions to the development and reserve fund and the export finance fund is removed.
ELIZABETH BAX