|SB 0617||Modifies current tax incentives for community economic development|
|LR Number:||2187L.12F||Fiscal Note:||2187-12|
|Committee:||Local Government and Economic Development|
|Last Action:||05/18/01 - H Conferees Appointed||Journal page:||H2539S1801|
|Title:||HS HCS SCS SB 617|
|Effective Date:||August 28, 2001|
HS/HCS/SCS/SB 617 - This act makes a wide variety of modifications relating to tax incentives for community economic development, including:
- Allows Newton County to impose a hotel-motel tax of not more than 5% for the promotion of tourism (Section 67.1360);
- Allows property owners in Springfield to remove their property from a Community Improvement District (CID), or to move it from one zone designation to another, after public notice and a hearing. Adds notice and election requirements to Kansas City CID provisions (Sections 67.1442 and 67.1545);
- Adds "electrical service activities classified as SIC 4911" to those types of businesses which constitute "revenue- producing enterprises" for purposes of eligibility for tax credits for new or expanded business facilities. (Section 135.100) Adds business who provide "electric power generation, transmission or distribution activities or natural gas transportation or distribution activities" to those types of businesses which constitute "revenue-producing enterprises" for purposes of eligibility for tax credits for new or expanded business facilities (Section 135.100), and for purposes of Enterprise Zone eligibility (Section 135.200). Removes the provision prohibiting "public utilities" from receiving such tax credits. (Sections 135.110 and 135.230) Deletes duplicate section 135.100 from the RSMo;
- Places a cap of $4 million per year on tax credits issued by DED for new and expanded business facilities; for taxpayers commencing operations on or after 1/1/01 (Section 135.150);
- Clarifies that airports are included in the definition of "revenue producing enterprises" for purposes of enterprise zone tax relief laws. Adds hotels and motels operated in Salem (Dent County) to the list of businesses and activities which qualify as a "revenue-producing enterprise" for purposes of enterprise zone tax relief laws. The act explicitly prohibits eligibility of these hotels and motels for state Enterprise Zone tax credits, but allows them to be eligible for real property improvement exemptions, regardless of the number of new jobs created or maintained. Deletes duplicate section 135.200 from the RSMo (Section 135.200);
- Allows the designation of an additional Enterprise Zone in any fourth class city (with pop. 3,500 - 4,500) in Jackson County (Sections 135.208 - 135.209);
- Broadens the class of employees of the Harley-Davidson plant in Kansas City who count toward achieving the fifteen- percent requirement in order for the plant to be granted the tax credits and exemptions available to a business located within an Enterprise Zone, in that it allows Harley-Davidson to count current employees who resided within the Enterprise Zone at the initial date of their employment and for 90 days thereafter regardless of whether the employee continues to reside within the Enterprise Zone on the date of the count, as long as the employee continues to reside in Missouri and work at H-D (Section 135.230);
- Redefines "Community Development Corporation" as a not- for-profit corporation with a board of directors composed of business, civic and community leaders the primary purpose of which is to promote economic development-type projects, regardless of whether the corporation receives Community Development Block Grant funds (Section 135.400);
- Reduces (from $13 million per year to $4 million per year for 10 years) the aggregate amount of tax credits available for qualified investments in Missouri small businesses; with a reduced portion (from $4 million to $2 million) of the aggregate amount authorized for investment in small businesses in distressed communities. Reduces (from 10 years to 5 years) the time frame over which these tax credits may be claimed (Section 135.403);
- Restricts (to no more than $500,000 per year) the amount of tax credits available for qualified investments in Missouri small businesses dealing with pharmaceutical R & D (Section 135.406);
- Increases (from less than 50% to less than 65%) the amount of ownership interest in a small business which may be held by investors after claiming a tax credit for a qualified investment (Section 135.408);
- Reduces (from 5 years to 3 years) the length of time which a qualified investment must remain in the business, except qualified investments made in small businesses located in distressed communities, which investments must remain in the distressed community for at least 5 years (Section 135.411);
- Allows the Department of Economic Development to require repayment of tax credits already applied against tax liability if the application contains a misrepresentation. Revocation of repayment of credits pursuant to this section shall only apply to the original credit applicant, not to good faith third-party purchasers of the credit (Section 135.423);
- Broadens the programs eligible for tax credits pursuant to the Youth Opportunities & Violence Prevention Act. Allows sale and transfer of these tax credits (Section 135.460);
- Broadens the definition of "eligible residences" for purposes of tax credits for rehabilitation of residences in distressed communities to include a condominium or residence with a multiple residence structure or a structure containing multiple family residences. Also broadens the definition of "new residences" to include vacant agricultural/horticultural property that is within Christian or Greene Counties and is zoned residential. Broadens the definition of a "project" for purposes of tax credits for rehabilitation of residences in distressed communities to include a multiple residence structure or multiple individual structures (Section 135.478);
- Increases (from 15% to 20%) the amount of eligible costs of a new residence, located in a distressed community or certain census block groups, which can be claimed as a Neighborhood Preservation tax credit (Section 135.481);
- Reduces (from $3 million to $1.5 million) the per-project maximum tax credits available for Rebuilding Communities & Neighborhood Preservation projects. Requires reallocation of unused tax credits (Section 135.484);
- Allows tax credits to be approved and issued upon substantial completion of each individual residence, rather than delaying approval and issuance until substantial completion of the entire project (Section 135.487);
- Increases (from 10% to 15%) the amount of ownership interest in a Missouri certified capital company (CAPCO) a person must hold to be defined as an "affiliate of a certified company". Modifies the term "certified capital" to "certified capital investment" and narrows the definition to include only those CAPCO investments that fully fund either the investor's equity CAPCO interest, or a qualified debt instrument issued by a CAPCO. Allows "capital in a qualified Missouri business" to include secured debt instruments. Defines the new terms "qualified debt instrument" and "qualified Missouri agricultural business". Narrows the definition of "qualified distribution" to include payment of CAPCO management and operation fees only if such fees of the CAPCO do not, on an annual basis, exceed 2.5% of the CAPCO's certified capital. Narrows the definition of what constitutes a "qualified investment". Clarifies the definition of "qualified Missouri business" and requires the business to maintain its HQ, principal operations and 80% of its employees in Missouri, or in a distressed community, for 3 years after the qualified investment (Section 135.500);
- Caps the aggregate amount of CAPCO tax credits at $4 million per year for 10 years, beginning in 2002. Caps the "cumulative" amount of CAPCO tax credits at $180 million (Section 135.503);
- Significantly expands the requirements for an entity to be a certified CAPCO. At least 2 principals (1 of which must be full-time and located in Missouri) must have 5 years of private equity venture capital investment experience with no less than $20 million from third-party venture investors. The applicant shall not have violated the CAPCO laws or any criminal laws, or made false representations, or been found liable for civil fraud or other crimes of moral turpitude (Section 135.508);
- Significantly expands the restrictions for investments by CAPCOs of certified capital which is not required to be placed in qualified investments, to require that such investments be held in a financial institution or held by a broker, shall not be reciprocally invested, shall be invested only in US Treasury obligations, CDs, obligations rated "A" or better, mortgage- backed securities, collateralized mortgage obligations, or interests in money market funds. At least 25% of qualified investments made with certified capital raised after 8/28/01 must be made in Missouri agricultural businesses (Section 135.516);
- Requires each certified CAPCO to file an annual report with the Department. Allows the Department to audit CAPCOs and to audit and examine the businesses receiving CAPCO investments. Requires CAPCOs to include, as a condition of funding an investment, a requirement that the qualified Missouri business or qualified Missouri agricultural business provide information so that the CAPCO can fulfill its reporting requirements. Requires the Department to file an annual report with the General Assembly and the Governor (Section 135.527);
- Reduces (from 2,500 to 500) the amount of population required of a low-income census block group or contiguous block groups to be eligible as a "distressed community". Further expands the definition of "distressed community" to include those areas within Metropolitan Statistical Areas designated as a federal Empowerment Zone; or a federal Enhanced Enterprise Community; or a state Enterprise Zone which was designated as a state Enterprise Zone prior to 1/1/86 (Section 135.530);
- Expands those businesses eligible for tax credits for investments in, or relocating a business to, a distressed community, by reducing (from 75% to 60%) the amount of employees of the business which must work at facilities within the distressed community and by increasing (from 100 to 150) the total number of employees which the business may have on the payroll. Increases (from $75,000 to $150,000) the maximum tax credits which may be claimed for purchase or lease of computers or other equipment. Reduces (from $10 million to $7.5 million) the aggregate annual cap for these tax credits. Deletes duplicate section 135.535 from the law (Section 135.535);
- Reduces (from $10 million to $7.5 million) the aggregate annual tax credits available for investing in transportation development in a distressed community (Section 135.545);
- Extends (from 12/31/2003 to 12/31/2010) the expiration date for the Petroleum Storage Tank Insurance Fund (Section 319.129). Allows owners and operators of petroleum storage tanks to continue to participate in the Fund subsequent to the transfer of their property to another party. Allows the Board to prioritize claims against the Fund, in consultation with DNR. (Section 319.131) Establishes a procedure for making claims for refunds of overpayments of the surcharge on petroleum products. (Section 319.132) Removes references to a Fund "participation fee" (Section 319.133);
- Modifies the definition of "follow-up capital" for tax credits for contributions to innovation centers to include capital provided to "any Missouri business" in which a qualified fund has invested seed capital or start-up capital "within the previous 3 years" (Section 348.300);
- Reduces (from $9 million to $4 million) the aggregate amount of annual tax credits available for qualified contributions to Innovation Centers. Increases (from 50% to 60%) the amount of a qualified contribution which may serve as the basis for the tax credit (Section 348.302); and
- Reduces (from $6 million to $0) the aggregate amount of annual tax credits available for qualified contributions to the Individual Training Account Program (Section 620.1450).
HA 1 - TECHNICAL AMENDMENT REGARDING A STATUTORY REFERENCE.
HA 2 - TECHNICAL AMENDMENT CORRECTING THE POPULATION OF SPRINGFIELD IN SECTION 67.1442.
HA 3 - REMOVES SECTIONS 319.129 to 319.133, REGARDING PETROLEUM STORAGE TANKS, FROM THE BILL.
HA 4 - TECHNICAL CLEAN-UP OF SECTIONS 135.500 to 135.516, REGARDING CAPCOs.
HA 5 - AUTHORIZES THE CITY OF SPRINGFIELD, IN COOPERATION WITH THE DIRECTOR OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT, TO DESIGNATE UP TO 3 SATELLITE ZONES WITHIN THE CITY OF SPRINGFIELD. THE DIRECTOR MUST APPROVE THE CITY'S OVERALL PLAN FOR ENTERPRISE ZONE AND SATELLITE ZONE USE PRIOR TO THE DESIGNATION. (Section 135.207)
HA 6 - ALLOWS 25% OF THE DEMOLITION COSTS (up to $125,000) OF A STRUCTURE LOCATED ON UNDERUTILIZED PROPERTY IN WASHINGTON (FRANKLIN COUNTY) TO COUNT AS ALLOWABLE COSTS UNDER THE BROWNFIELD REMEDIATION TAX CREDIT PROGRAM. (Section 447.700)
HA 8 - ALLOWS A TAX CREDIT FOR UP TO 50% OF A CONTRIBUTION TO A SEXUAL VIOLENCE CRISIS CENTER. THE CREDIT IS CAPPED at $50,000 PER TAXPAYER PER YEAR, AND HAS AN ANNUAL AGGREGATE CAP OF $2 MILLION. (SECTION 135.552) ALLOWS A TAX CREDIT FOR UP TO 50% OF A CONTRIBUTION TO AN UNPLANNED PREGNANCY RESOURCE CENTER. THE CREDIT IS CAPPED AT $50,000 PER TAXPAYER PER YEAR, AND HAS AN ANNUAL AGGREGATE CAP OF $2 MILLION. (SECTION 135.630) BOTH OF THESE TAX CREDITS SUNSET ON 12/31/2006. (SECTION 135.631) REDUCES (FROM $9.7 MILLION to $5.7 MILLION) THE ANNUAL AGGREGATE AMOUNT OF TAX CREDITS FOR QUALIFIED RESEARCH EXPENSES AVAILABLE PURSUANT TO SECTION 620.1039.
HA 10 - ALLOWS AN 85% TAX CREDIT (UP TO $10,000) FOR COST OF IMPROVING A RECREATIONAL FACILITY HAVING AT LEAST 6 BASEBALL FIELDS LOCATED IN CERTAIN THIRD CLASSIFICATION COUNTIES (INCLUDING VERNON COUNTY).
HA 11 - BROADENS THE POPULATION CRITERIA FOR AN AREA TO QUALIFY AS AN ENTERPRISE ZONE; FROM 1,000-20,000 INHABITANTS TO 1,000- 25,000 INHABITANTS. (SECTION 135.205)
HA 12 - ALLOWS THE GOVERNOR TO CONVEY STATE-OWNED LAND IN ST. FRANCOIS COUNTY TO THE ST. FRANCOIS COUNTY HABITAT FOR HUMANITY.
HA 13 - REGARDING LICENSEES OF THE DIVISION OF PROFESSIONAL REGISTRATION OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT; REMOVES A LICENSEE'S ADDRESS FROM THE LIST OF INFORMATION WHICH IS NOT CONFIDENTIAL, THUS, MAKING THE LICENSEE'S ADDRESS CONFIDENTIAL. (SECTIONS 620.010 and 620.145)
HA 15 - CHANGES ALL REFERENCES TO "SCHOOLS" IN THE YOUTH
OPPORTUNITIES & VIOLENCE PREVENTION ACT TO "PUBLIC SCHOOLS".