SB 807
Modifies provisions relating to corporations
Sponsor:
LR Number:
3527H.05C
Committee:
Last Action:
4/28/2022 - Referred H Rules - Administrative Oversight
Journal Page:
Title:
HCS SS SB 807
Calendar Position:
Effective Date:
August 28, 2022
House Handler:

Current Bill Summary

HCS/SS/SB 807 - This act modifies provisions relating to corporations.

RIGHT-TO-START ACT

By no later than June 30, 2024, and annually thereafter, this act requires the Commissioner of Administration to file a report with the General Assembly that includes information on contracts awarded to businesses that have been in operation for less than three years, as described in the act.

This act also requires the Commissioner of Administration, in conjunction with the Office of Entrepreneurship, which is established by the act, to file a report with the General Assembly making recommendations on improving access and resources for new Missouri businesses that have been in operation for less than three years, including minority-owned businesses. (Section 34.195)

This provision is identical to a provision contained in HCS/HB 1590 (2022) and SS/HCS/HB 2587 (2022).

ZONING REGULATIONS ON HOME-BASED WORK BY POLITICAL SUBDIVISIONS

The act creates new provisions governing the regulation of home-based work, as defined in the act, by certain political subdivisions. Specifically, counties, municipalities, and townships are prohibited from enacting a zoning ordinance or regulation that:

· Prohibits mail order or telephone sales for home-based work;

· Prohibits service by appointment within the home or accessory structure;

· Prohibits structural modifications to the home or accessory structure that do not change the residential character of the residential building or adversely affect the character of the surrounding neighborhood;

· Requires structural modifications to the home or accessory structure that change the residential character of the residential building or adversely affect the character of the surrounding neighborhood;Restricts the hours of operation for home-based work; or

· Restricts storage or the use of equipment that does not produce effects outside the home or accessory structure.

Furthermore, any such zoning ordinance or regulation may not explicitly restrict or prohibit a particular occupation.

These provisions do not supersede any deed restriction, covenant or agreement restricting the use of land nor any master deed, by law or other document applicable to a common interest ownership community. (Sections 64.008, 65.710, and 89.500)

These provisions are substantially similar to provisions in SS/HCS/HB 1662 (2022), SCS/HB 2593 (2022), HCS/SS/SCS/SB 931 (2022), and SCS/SB 809 (2022).

LOCAL RESTRICTIONS ON HOME-BASED BUSINESSES

This act provides that a political subdivision shall not prohibit the operation of a no-impact, home-based business or require a person to apply for any permit or license to operate such a business. However, a political subdivision may establish reasonable regulations on such businesses that are narrowly tailored for the purpose of protecting public health and ensuring the businesses are compliant with state and federal law. (Section 71.990)

This provision is identical to a provision in SCS/HB 2593 (2022) and is substantially similar to a provision in SS/HCS/HB 1662 (2022) and HCS/SS/SCS/SB 931 (2022).

EARNINGS TAX

Current law authorizes the cities of Kansas City and St. Louis to levy an earnings tax, which is imposed in part on salaries, wages, commissions, and other compensation earned by nonresidents of the city for work done or services performed or rendered in the city. For all tax returns filed on or after January 1, 2022, this act provides that "work done or services performed or rendered in the city" shall not include any work or services performed or rendered through telecommuting or otherwise performed or rendered remotely unless the location where such work is performed is located in the city. Any taxpayer denied a refund for taxes paid for such work or services not performed or rendered in the city may bring a cause of action in a court of competent jurisdiction, and such taxpayer shall recover reasonable attorney's fees resulting from such cause of action. (Sections 92.111 and 92.115)

This provision is identical to HCS/HB 1740 (2022) and to a provision in HCS/SCS/SB 908 (2022), and is substantially similar to SCS/SB 604 (2021), HB 1294 (2021), and HB 1420 (2021), and to a provision contained in HCS/HB 394 (2021) and HCS/HB 688 (2021).

TAXATION OF BUSINESSES

Current law allows a taxpayer to subtract a percentage of the taxpayer's business income from the taxpayer's federal adjusted gross income. This act allows a taxpayer that begins business operations on or after January 1, 2023, to reduce such taxpayer's remaining business income by a further twenty percent for the first three years in which the taxpayer's business is in operation. (Section 143.022)

Current law provides for a corporate income tax of 4%. For all tax years beginning on or after January 1, 2023, for corporations beginning operations in this state on or after January 1, 2023, this act reduces such rate of tax to 3% for the first $100,000 of income, with the corporation's remaining income to be taxed at 4%. Beginning with the fourth year in which the corporation maintains operations in this state, all of such corporation's income shall be taxed at 4%. (Section 143.071)

This provision is identical to a provision contained in HCS/HB 1590 (2022) and SS/HCS/HB 2587 (2022).

S CORP TAX CREDIT

Current law authorizes a tax credit for the amount of income tax paid to another state for income that is also taxed in this state. This amendment allows such tax credit to be claimed by resident shareholders of an S corporation for the amount of tax imposed by this state on income earned in another state but not taxed by such state. (Section 143.081)

This provision is identical to SB 410 (2021) and to a provision in HCS/SS/SCS/SB 931 (2022), HCS/SS#2/SCS/SB 968 (2022), HCS/HB 1803 (2022), HCS/HB 2157 (2022), and SS/HB 2400 (2022).

EMPLOYEE STOCK OWNERSHIP PLAN DEDUCTION

Current law authorizes an income tax deduction equal to 50% of the net capital gain from selling employer securities to a qualified Missouri employee stock ownership plan, with such deduction scheduled to sunset on December 31, 2022. This act extends the sunset date to December 31, 2028. (Section 143.114)

This provision is identical to a provision in HCS/SS/SCS/SB 931 (2022).

MEDICAL MARIJUANA BUSINESS DEDUCTION

This act allows taxpayers authorized under the Missouri Constitution to operate a business related to medical marijuana to claim an income tax deduction in an amount equal to any expenditures otherwise allowable as a federal income tax deduction, but that are disallowed for federal purposes because cannabis is a controlled substance under federal law. (Section 143.121)

This provision is identical to SB 436 (2021) and to a provision in SS#2/SCS/SB 649 (2022), and is substantially similar to HB 1901 (2022), HB 877 (2021), HB 2667 (2022), and to a provision in HCS/HB 2704 (2022), CCS/HCS/SB 226 (2021), and HCS/SS/SB 283 (2021).

SALT PARITY ACT

This amendment establishes the "SALT Parity Act".

Current law provides that, in lieu of a corporate income tax on a pass-through entity, shareholders of such pass-through entity shall pay income tax on the shareholder's pro rata share of the entity's income attributable to Missouri. For tax years ending on or after December 31, 2022, this amendment allows the pass-through entity to elect to pay the tax, as described in the amendment. The tax shall be equal to the sum of each member's income and loss items, as described in federal law, reduced by a deduction allowed for qualified business income, as described in federal law, and modified by current provisions of state law relating to the taxation of pass-through entities, with such sum multiplied by the highest rate of tax in effect for the state personal income tax.

A nonresident who is a member, as defined in the amendment, shall not be required to file a tax return for a tax year if, for such tax year, the only income derived from this state for such member is from one or more affected business entities, as defined in the amendment, that has elected to pay the tax imposed under this amendment.

Each partnership and S corporation shall report to each of its members, for each tax year, the member's pro rata share of the tax imposed by this amendment.

Each taxpayer, including part-year residents, that is subject to the state personal income tax shall be allowed a tax credit if such taxpayer is a member of an affected business entity that elects to pay the tax imposed by this amendment. The tax credit shall be equal to the taxpayer's pro rata share of the tax paid under this amendment. Such tax credit shall be nonrefundable, but may be carried forward to subsequent tax years, except that a tax credit authorized for taxes paid to other states shall not be carried forward.

Each corporation that is subject to the state corporate income tax shall be allowed a tax credit if such corporation is a member of an affected business entity that elects to pay the tax imposed by this amendment. The tax credit shall be equal to the corporation's pro rata share of the tax paid under this amendment. Such tax credit shall be nonrefundable, but may be carried forward to subsequent tax years.

Partnerships and S corporations may elect to pay the tax imposed under this amendment by submitting a form to be provided by the Department of Revenue. A separate election shall be made for each tax year. Such election shall be signed either by each member of the electing entity, or by any officer, manager, or member of the electing entity who is authorized to make such election and who attests to having such authorization under penalty of perjury.

An affected business entity shall designate an affected business entity representative for the tax year to amendment on behalf of the affected business entity in any action required or permitted to be taken by an affected business entity pursuant to this amendment, a proceeding to protest taxes, an appeal to the Administrative Hearing Commission, or review by the judiciary with respect to such action, and the affected business entity's members shall be bound by those actions. (Section 143.436)

This provision is identical to a provision in SS/SCS/SB 931 (2022) and SS#2/SCS/SB 968 (2022), and is substantially similar to SB 1154 (2022) and HB 2845 (2022), and to a provision in HCS/HB 2157 (2022) and HCS/HB 1803 (2022).

ELIMINATION OF YOUTH ENTERTAINMENT WORK PERMITS

The act additionally modifies current provisions of law regulating child employment. Specifically, the act repeals requirements that children under the age of 16 must obtain work permits prior to being employed in the entertainment industry, provided that children may still only be present at the place of employment for the entertainment industry if the parent, legal custodian, guardian, or designated guardian has consented and is present at all times.

Additionally, the act modifies the process for issuing work certificates to children under 18 years of age. Current law requires children under 18 years of age to be issued a work certificate in order to be employed during the regular school term. This act repeals that requirement and instead makes issuance of a work certificate as evidence of age of the child to be permissive, upon the request of the child or the employer seeking to employ the child. Such work certificates are to be issued by the Division of Labor Standards and shall be accepted as conclusive evidence of the age of the child.

The act furthermore provides that the Division of Labor Standards, Labor and Industrial Relations Commission, Department of Labor and Industrial Relations, and every other government entity in this state are prohibited from:

• Requiring that a child under the age of 18 be issued a work certificate of employment or entertainment work permit as a condition of employment; and

• Requiring an employer to obtain a work certificate of employment or entertainment work permit from a child under the age of 18 as a condition of employment. (Sections 294.022 to 294.090)

These provisions are identical to provisions in SCS/SB 809 (2022) and are substantially similar to HB 2824 (2022).

SUNSHINE LAW

The act modifies the definitions of "public business", "public meeting", and "public record" and adds a definition for "transitory records". "Transitory records" shall not be considered a public record. Currently, the definition of "public record" provides that personally identifiable student records maintained by a public educational institution may be viewed by parent or guardian of the student, or the student if over the age of 18. This act modifies this provision to apply to all public governmental bodies rather than just public educational institutions. Also, the definition of "public records" excludes any internal m emorandum received or prepared by a public body consisting of certain advisory material unless such record is retained by the public body. This act repeals the requirement that such record was retained by the public body. (Section 610.010)

Bases for closing records and meetings are modified to include certain records relating to nonjudicial mental or physical health proceedings. The act authorizes a public governmental body to close records and meetings relating to security measures, GPS data, and investigative and surveillance techniques of any law enforcement or public safety agency which, if disclosed, has the potential to endanger individual or public safety or health.

Currently, a public body may close records relating to operational guidelines, policies, and response plans for use in responding to a critical incident which is or appears to be terrorist in nature. This act repeals the requirement that incident be terrorist in nature. The act further authorizes the closure of existing and proposed security protocols of a public body.

A public governmental body is authorized to close records that are related to email addresses and telephone numbers submitted to a public governmental body by individuals or entities for the sole purpose of receiving electronic or other communications.

The public body may also close records of utility usage and bill records for customers of public utilities unless the customer requests them or authorizes their release.

This act authorizes the closure of public records that are retained by a public governmental body that are related to a constituent of the public body as well as records related to a dignitary or foreign leader. Medical and mental health records of a constituent may be closed in their entirety and other such records shall be redacted to remove individually identifiable information of the constituent. The act defines the term "constituent" to include any person who is a resident of, pays property taxes within, or owns a business entity within, the boundaries of the public body, but shall not include a lobbyist or lobbyist principal, a statewide elected official, or an elected official of a political subdivision, or an employee of such elected official.

The act authorizes the closure of inter-agency or intra-agency memoranda or letters that would not be available by state or federal law to a party other than an agency in litigation with the agency, provided that this exception shall not apply to records created twenty-five years or more before the date the records were requested or to records to or from a registered lobbyist or lobbyist principal.

Further, any record may be closed that is retained in the office of a member of the General Assembly, or employees of the General Assembly, that contain information regarding proposed legislation or the legislative process. These authorizations to close records shall not apply if the record has been offered in a public meeting of either house of the General Assembly or, for legislative records, to any record addressed to, or from, a lobbyist or lobbyist principal. (Section 610.021)

Currently, requests for records must be acted upon with three business days. This act changes this requirement to five business days. Access to and production of records may be conditioned upon the receipt of payment of fees. (Section 610.023)

Where a single record contains both open and closed records, the public body shall make a redacted version of such record available. Current law authorizes a public body to charge for research time required to fulfill records requests. This act authorizes the public body to also charge for the time needed to redact documents using employees of the body that result in the lowest charge. (Section 610.024)

Currently, payment of copying fees may be requested prior to the making of copies. This act modifies this provision so that payment of any fees may be requested prior to fulfilling the request. Except as provided in the amendment, a request for public records to a public governmental body shall be considered withdrawn if the requester fails to remit all fees within thirty days of a request for payment of the fees by the public governmental body. The public body shall include notice to the requester that the failure to remit the fees within thirty days shall result in the request being considered withdrawn. If a public body responds to a records request in order to seek clarification of the request and no response to the clarification request is received within thirty days, then such request shall be considered withdrawn. The request for clarification shall include notice to the requester that the request shall be considered withdrawn if there is no response within thirty days. If the same or a substantially similar request for records is made within six months of the expiration of the thirty day period and no fee was remitted for the original request or no response to the request for clarification was received, then the public body can request payment of fees made for the original request. (Section 610.026)

These provisions are identical to provisions in SS/SCS/SB 741 (2022), SB 1135 (2022), and are substantially similar to SCS/SB 930 (2022), SCS/HCS/HB 362 (2021), and SCS/SB 613 (2020).

OFFICE OF ENTREPRENEURSHIP

This act creates the Office of Entrepreneurship within the Department of Economic Development. The Office shall employ an individual to promote policies and initiatives to support the growth of entrepreneurship, including minority entrepreneurship, in this state. (Section 620.3800)

This provision is identical to a provision contained in HCS/HB 1590 (2022) and SS/HCS/HB 2587 (2022).

REGULATORY SANDBOX ACT

This act establishes the "Regulatory Sandbox Act", which creates the Regulatory Relief Office within the Department of Economic Development. The Regulatory Relief Office shall administer the provisions of the act with the purpose of identifying state laws or regulations that could potentially be waived or suspended for participating businesses during a two-year period in which the participating business demonstrates an innovative product offering to consumers.

The Regulatory Relief Office shall maintain a web page on the Department's website that invites residents and businesses to make suggestions regarding laws and regulations that could be modified or eliminated to reduce the regulatory burden of residents and businesses in the state. (Section 620.3905)

The Regulatory Relief Office shall be responsible for evaluating and approving or denying applications to participate in the Sandbox Program. An applicant shall submit an application along with a $300 application fee to the Regulatory Relief Office, which shall include contact information and a description of the innovative offering to be demonstrated, including statements regarding how the innovative offering is subject to licensing, legal prohibition, or other authorization requirements outside of the Sandbox Program; each law or regulation that the applicant seeks to have waived or suspended while participating in the Sandbox Program; how the innovative offering would benefit consumers; and what risks might exist for consumers who use or purchase the innovative offering, as described in the act.

No later than five business days after the day on which a completed application is received by the Regulatory Relief Office, the Office shall review the application and refer the application to each applicable agency, as defined in the act, that regulates the applicant's business. No later than thirty days after the day on which an applicable agency receives a completed application for review, the applicable agency shall provide a written report to the Sandbox Program director with the applicable agency's findings, including any identifiable, likely, and significant harm to the health, safety, or financial well-being of consumers that the relevant law or regulation protects against, and a recommendation to the Regulatory Relief Office that the applicant either be admitted or denied entrance into the Sandbox Program. An applicable agency may deny an application for reasons described in the act. The Regulatory Relief Office shall not approve any application denied by an applicable agency. (Section 620.3915)

Upon the receipt of a report from all applicable agencies, the Regulatory Relief Office shall provide the application and associated reports to the General Regulatory Sandbox Program Advisory Committee, which is created by the act. The Advisory Committee shall be composed of eight members, as described in the act. The Advisory Committee shall advise and make recommendations to the Regulatory Relief Office on whether to approve applications to the Sandbox Program, and may meet at its own discretion to override a decision of the Regulatory Relief Office on the admission or denial of an applicant to the Sandbox Program, provided such override is decided with a majority vote of the members of the Advisory Committee, and further provided that such vote shall be taken within ten business days of the Regulatory Relief Office's decision. Meetings of the Advisory Committee shall not be considered public meetings for the purposes of the Sunshine Law. (Section 620.3910)

Upon approval of an application, a sandbox participant shall have twenty-four months after the day on which its application was approved to demonstrate the innovative offering described in the sandbox participant's application. During such period, the sandbox participant shall be exempt from the laws and regulations outlined in an agreement entered into with the Regulatory Relief Office. Innovative offerings shall only be available to consumers who are residents of this state, and no law or regulation shall be waived or suspended if such waiver or suspension would prevent a consumer from seeking restitution in the event that the consumer is harmed. A sandbox participant shall not be subject to prosecution or administrative penalty for a violation of any law or regulation that is waived or suspended during the duration of the participant's demonstration period. (Section 620.3920)

Prior to demonstrating an innovative offering, a sandbox participant shall disclose certain information to consumers, as described in the act. (Section 620.3925)

At least thirty days prior to the end of a participant's demonstration period, the participant shall notify the Regulatory Relief Office that it either intends to exit the Sandbox Program or that it seeks an extension. The Regulatory Relief Office may grant an extension not to exceed twelve months, and a participant may seek multiple extensions. If a demonstration includes an innovative offering that requires ongoing services or duties beyond the two-year demonstration period, the participant may continue to demonstrate the offering, but shall be subject to all laws and regulations that were waived or suspended as part of the Sandbox Program.

A sandbox participant shall retain certain records for a period of two years after exiting the Sandbox Program.

The Regulatory Relief Office shall establish quarterly reporting requirements for each participant, and each participant shall notify the Regulatory Relief Office and each applicable agency of any incidents that result in harm to the health, safety, or financial well-being of a consumer.

No later than thirty days after a sandbox participant exits the Sandbox Program, such participant shall submit a written report describing an overview of the demonstration. No later than thirty days after receiving such report, an applicable agency shall provide a written report to the Regulatory Relief Office that describes any statutory or regulatory reform the applicable agency recommends. (Section 620.3930)

These provisions are identical to SB 1068 (2022) and to provisions in HCS/SS#2/SCS/SB 968 (2022), and are substantially similar to provisions in HCS/SS/SCS/SB 931 (2022) and SS/HCS/HB 2587 (2022).

MEDICAL MARIJUANA LICENSES

This act requires the Department of Health and Senior Services to issue medical marijuana licenses to applicants who qualify regardless of whether the number of licenses granted exceeds the aggregate license limit established by the Department. (Section 1)

JOSH NORBERG