SB 120 Modifies provisions relating to tax credits and tax incentives
Sponsor: Schmitt
LR Number: 0722S.15P Fiscal Note available
Committee: Jobs, Economic Development and Local Government
Last Action: 3/27/2013 - Referred H Economic Development Committee Journal Page: H735
Title: SS SCS SB 120 Calendar Position:
Effective Date: Emergency Clause

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Current Bill Summary


SS/SCS/SB 120 - This act modifies provisions relating to taxation and economic incentives.

DATA STORAGE CENTERS TAX INCENTIVES

Sections 67.2050 & 144.810

This act allows the governing body of any municipality to enter into loan agreements, or sell, lease, or mortgage municipal property to private entities for the development of a technology business facility project. Municipalities include utility boards of counties, cities, towns or villages. Transactions involving the lease or rental of such properties will be exempt from state and local sales taxes and any leasehold interests on such properties will not be subject to property taxes. The act allows municipalities to sell or otherwise dispose of municipal property to private entities for technology business facility projects provided that the terms and methods utilized reasonably protect the economic well being of the municipality. Any private entity which transfers property to the municipality for purposes of a technology business facility project will reserve the right to request that the municipality transfer such property back to the entity at no cost.

This act provides state and local sales and use tax exemptions for all machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and internet services, used in new data storage center facilities. The act also provides a state and local sales and use tax exemption for purchases of tangible personal property for the construction of a new data storage center facility. In order to receive the sales tax exemption provided for new data storage center facilities, an application must be made to the Department of Economic Development for certification. Such application must show that the project will result in at least thirty-seven million dollars of new facility investment and create at least thirty new jobs with wages of at least 150 percent of the county average wage over a three year period. A project shall be approved even though the investment and job creation requirements are not met if exemptions do not exceed the project fiscal benefit to the state over ten years. Projects must meet the job creation and investment amounts projected in their notice of intent to receive exemptions under the act.

The act also creates a state and local sales and use tax exemption for existing data storage center facilities for all machinery, equipment, computers, electrical energy, gas, water and other utilities, including telecommunication and internet services. The exemption will only apply to the increase in expenditures for utilities over the previous year's expenditures. The exemptions for tangible property will be available only on the increase in expenditures over the average of the previous three years expenditures. In order to receive the sales tax exemption provided for existing data storage center facilities, an application must be made to the Department of Economic Development for certification. Such application must show that the project will result in at least five million dollars of new facility investment over a one year period and create at least five new jobs with wages of at least 150 percent of the county average wage over a two year period. A project shall be approved even though the investment and job creation requirements are not met if exemptions do not exceed the project fiscal benefit to the state over ten years. Projects must meet the job creation and investment amounts projected in their notice of intent to receive exemptions under the act.

The Department of Economic Development and the Department of Revenue are authorized to conduct random audits to ensure compliance with the requirements for state and local sales and use tax exemptions authorized under the act.

The data storage centers tax incentive will expire on September 1, 2019. The expiration will not impair any agreements or exemptions granted before the expiration.

These provisions are similar to HB 222 (2013), SB 46 (2013), and SB 394 (2013). These provisions are similar to provisions contained in HCS/HB 698 (2013), HCS/SB 23 (2013), HCS/SS/SCS/SB 83 (2013), and HCS/SB 112 (2013).

LOW-INCOME HOUSING TAX CREDITS

Sections 135.350 & 135.352

This act modifies provisions relating to low-income housing tax credits. A one hundred million dollar fiscal year cap for authorizations of 9% low-income housing tax credits is established, beginning FY 2014. Authorizations of 4% low-income housing tax credits are capped at ten million dollars each fiscal beginning FY 2014. 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. The carry-forward is reduced from ten years to two years.

These provisions are similar to provisions in SCS/HCS/HB 222 (2013), HB 698 (2013), SB 5 (2013), SB 32 (2013), SB 103 (2013), SB 531 (2012), SCS/SB 548 (2012), and provisions of SB 8 (2011 1st Ex. Session).

NEIGHBORHOOD PRESERVATION ACT

Section 135.484

Currently, there is a $16 million per year cap on tax credits authorized under the neighborhood preservation act. The act prohibits authorization of the tax credit after the effective date of the act.

These provisions are similar to HB 116 (2011) and SB 8 (2011 1st Ex. Session).

MISSOURI EXPORT INCENTIVE ACT

Sections 135.1550 to 135.1575

This act creates the Missouri Export Incentive Act. For all fiscal years beginning on or after July 1, 2013, this act authorizes air export tax credits for freight forwarders in an amount equal to forty cents per chargeable kilo shipped on a qualifying outbound flight from an airport owned and operated by the City of St. Louis. 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 withing 120 days of the flight. The act requires the Department to establish procedures to allow freight forwarders to receive air export tax credits within twenty business days of the departure of the qualifying flight.

The amount of air export tax credits which may be issued each fiscal year is $7.5 million, unless the Department of Economic Development approves a larger amount. The total aggregate amount of air export tax credits that may be authorized over eight years is $60 million. If the cap on issuance is not met in a fiscal year, the following fiscal year's cap will be increased by the amount of unissued credits below the cap. The authorization of air export tax credits is prohibited after June 30, 2021, but the act allows for the subsequent issuance of any tax credits which are authorized prior to such date.

The air export tax credit is refundable.

These provisions are similar to HB 201 (2013), HCS/HB 221 (2013), SCS/HCS/HB 222 (2013), HCS/HB 698 (2013), HB 1476 (2012), HB 840 (2011) & SB 390 (2011).

SELF-EMPLOYED HEALTH INSURANCE TAX CREDIT

Section 143.119

Current, self employed taxpayers who are unable to deduct health insurance premiums on their federal income taxes are allowed a refundable tax credit against their state income tax liability. This act eliminates the tax credit.

These provisions are similar to HB 116 (2011) and SB 8 (2011 1st Ex. Session).

HISTORIC PRESERVATION

Sections 253.550, 253.557 & 253.559

This act modifies provisions of law relating to 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 2014, and each fiscal year thereafter, this act would prohibit the Department of Economic Development from approving a total amount of more than seventy-five million dollars in historic preservation tax credits increased by the amount of any rescissions of approved applications for such tax 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.

This 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.

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.

Currently, historic preservation tax credits can be carried back three years and carried forward ten years. Tax credits issued after the effective date of the act can be carried backwards one year and forwards two years. The stacking of state historic preservation tax credits with state 9% low-income housing tax credits is prohibited.

These provisions are similar to SCS/HCS/HB 222 (2013), HB 698 (2013), SB 5 (2013), SB 32 (2013), SB 103 (2013), HCS/HB 1476 (2012) and to provision in the perfected version of SB 8 (1st Ext. Session 2011).

BROWNFIELD REMEDIATION TAX CREDITS

Section 447.708

The act prohibits more than $30 million in Brownfield Remediation tax credits being authorized in any fiscal year beginning FY 2014. If the Distressed Areas Land Assemblage tax credit is authorized in a fiscal year, the cap on Brownfield Remediation tax credits is increased to $40 million for FY 2014-2017 and $35 million for all fiscal years beginning after FY 2017. No more than $10 million in tax credits may be authorized each fiscal year for FY 2014 - 2017 for projects receiving benefits under the Distressed Areas Land Assemblage tax credit. No more than $5 million in tax credits may be authorized for each fiscal year beginning after FY 2017 for projects receiving benefits under the Distressed Areas Land Assemblage tax credit.

These provision are similar to provisions contained in SB 8 (1st Ext. Session 2011).

This act contains an emergency clause for provisions relating to low-income housing tax credits, neighborhood preservation tax credits, the Missouri Export Incentive Act, historic preservation tax credits, and brownfield remediation tax credits.

MIKE HAMMANN