SB 895 Establishes the Missouri Science and Innovation Reinvestment Act
Sponsor: Dempsey Co-Sponsor(s)
LR Number: 4472S.03C Fiscal Note: 4472-03N.ORG
Committee: Jobs, Economic Development and Local Government
Last Action: 5/14/2010 - S Informal Calendar S Bills for Perfection--SBs 895, 813, 911, 924, 922 & 802-Dempsey, et al, with SCS, SS for SCS, SA 1, SSA 1 for SA 1 & SA 1 to SSA 1 for SA 1 (pending) Journal Page:
Title: SCS SBs 895, 813, 911, 924, 922 & 802 Calendar Position:
Effective Date: August 28, 2010

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Current Bill Summary


SS/SCS/SB's 895, 813, 911, 924, 922, & 802 - This act allows municipalities to adopt ordinances establishing Missouri Jobs for the Future Districts in which municipalities can develop such area to attract business and create jobs. The act requires a higher education institution or research institutions to have a physical presence in the district which directly involves the application of science or technology to targeted industry clusters in the district. In order to establish Missouri Jobs for the Future Districts, municipalities must hold public hearings to adopt ordinances providing a comprehensive plan for the district and any projects which will be undertaken for the benefit of the district, and receive approval from the department of economic development. The act provides notice requirements for public hearings, establishes requirements for plans and projects, and places limitations upon obligations issued to fund projects within Missouri Jobs for the Future Districts. In order establish a Missouri Jobs for the Future District, the total amount of eligible project costs to be paid by appropriation of MO-JFF revenues cannot exceed thirty-five percent of the total project cost and at least fifteen percent of the eligible project cost must be offset by municipal funding federal grant money and other non-state donations or grants that the municipality secures for the project may be counted as part of the municipality's required funding. Eligible costs incurred within a district may be repaid by appropriations from the state general revenue fund. Appropriations will be based upon the incremental increase in state general revenue collections of sales tax and income tax withholdings of employees located within the district.

Various tax incentive programs are modified to allow the director of the Department of Economic Development to increase tax incentives available for Missouri businesses upon a finding of economic benefit to the state. The act allows the director of the Department of Economic Development to increase the amount of appropriation from the economic development supplemental tax increment financing fund, for redevelopment projects or plans which result in net new jobs from the relocation, or expansion, of a Missouri business. Such appropriation may be increased by as much as two percent for every continuous five year period the company was a Missouri business up to a total increase of ten percent.

The director of the Department of Economic Development may, upon a finding of economic benefit to the state, increase the amount of incentives available for Missouri businesses under the rebuilding communities tax credit program; enhanced enterprise zone tax credit program; job retention program; new job training program; or quality jobs tax credit program by as much as two percent for each continuous five year period the business has been a Missouri business, but not to exceed a total increase of ten percent.

The act establishes the Missouri Science and Innovation Reinvestment Act. The act requires the advise and consent of the Senate for Gubernatorial appointments to the Missouri Technology Corporation's board of directors and sets the terms and requirements for the various members of the board of directors. The powers and duties of the Missouri Technology Corporation are expanded to allow the corporation to assume all monies and assets of the Missouri Seed Capital Investment Board and to establish a proof of concept finance program, an angel investment finance program, and a venture capital co-investment fund. The act provides application, approval, and reporting requirements for programs established by the Missouri Technology Corporation. In addition to the exceptions to open records and meetings requirements provided under the Sunshine Act, the act authorizes the Missouri Technology Corporation to close certain meetings and records held by the corporation. The directors of the Department of Economic Development and the Department of Revenue must annually determine the incremental increase in gross wages paid within the state to science and innovation employees and apply a formula to such amount to determine the amount of funding necessary to administer the programs of the corporation. Once a determination is made, the directors of the Department of Economic Development and the Department of Revenue must report their findings to the Governor and the General Assembly. The act replaces the Missouri Technology Fund with the Missouri Science and Innovation Reinvestment Fund, which will receive annual appropriations made by the General Assembly, based upon recommendations made by the directors of the Departments of Economic Development and Revenue, and contributions made by private entities, the federal government, and local governments. The act requires that any contract entered into between the corporation and any not-for-profit organization must provide at least a one hundred percent match of funding received from the corporation.

The act establishes the proof of concept business finance program to be administered by the Missouri Technology Corporation. The program will provide one-time loans to eligible advanced technology companies which must be repaid within five years of the date of the loan in an amount equal to two times the amount of the loan. Early repayment will result in a proration of the repayment amount. No more than one million two hundred fifty thousand dollars will be made available for loans to advanced technology companies each fiscal year. Loans made under the program cannot exceed seventy-five thousand dollars per eligible advanced technology company and must be leveraged dollar-for-dollar by additional equity investment in the company. Loan proceeds may be used by eligible advanced technology companies for intellectual property development, building prototypes, market studies, identifying and securing a management team, and business operations.

The act creates a new type of project under the Quality Jobs Act known as show-me fund projects. Show-me fund project benefits will be available for projects which qualify as small and expanding business, high impact, or technology business projects under the Quality Jobs Act and meet certain additional job creation and capital investment requirements. In determining eligibility for show-me fund benefits, the act requires the director of the department of economic development to consider factors including the creditworthiness of the company, proposed wages for employees of the company, growth potential of the company, net economic benefit to the state, and local incentives provided to the project. Local incentives equaling no less than fifty percent of new direct local revenues must be provided in order for high impact projects to receive show-me fund credits. If the department approves a company for show-me fund benefits and enters into a contract with such company setting out performance requirements for the receipt of benefits, the company may receive refundable tax credits equal to the amount of income tax withholdings for new employees of the company over a period of years ranging between five and twelve years depending upon the type of project. The act contains provisions allowing for a recapture of tax credits in the event a company should default or fail to comply with performance requirements set by the department. No more than sixty million dollars in tax credits may be issued annually for show-me fund projects. Under current law, no more than eighty million dollars in quality jobs tax credits or more than twenty-five million dollars in BUILD tax credits may be issued annually. The act prohibits the issuance of more than a total of one hundred five million dollars in tax credits under the quality jobs and BUILD programs. The director of the Department of Economic Development is authorized to allocate BUILD tax credits for issuance as show-me fund tax credits provided that such allocation does not exceed statutory limits. The act prohibits companies from receiving show-me fund credits in conjunction with BUILD tax credits or other benefits available under the Quality Jobs Act for other types of projects.

JASON ZAMKUS