HCS/SS/SCS/SB 931 - This act modifies provisions relating to businesses.MISSOURI DISASTER FUND
This act allows rural electric cooperatives, as defined in the act, to receive funds from the Missouri Disaster Fund. (Section 44.032)
This provision is identical to a provision in HCS/SS#2/SCS/SB 745 (2022), SS/SCS/SB 756 (2022), CCS/HCS/SB 820 (2022), HCS/SS#2/SCS/SB 968 (2022), SCS/HCS/HB 1734 (2022), and HCS/HB 2328 (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 or requires structural modifications to the home or accessory structure;
· 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 identical to provisions in SS/HCS/HB 1662 (2022), SCS/HB 2593 (2022), and SCS/SB 809 (2022), and are substantially similar to provisions in HCS/SS/SB 807 (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 substantially similar to a provision in SS/HCS/HB 1662 (2022), SCS/HB 2593 (2022), and HCS/SS/SB 807 (2022).
PERSONAL PRIVACY PROTECTION ACT
This act establishes the Personal Privacy Protection Act prohibiting public agencies, as defined in the act, from disclosing or requiring the disclosure of personal information, as defined in the act. Specifically, public agencies are prohibited from:
· Requiring any individual to provide the public agency with personal information or otherwise compel the release of such personal information;
· Requiring any entity exempt from federal income taxation under Section 501(c) of the Internal Revenue Code to provide the public agency with personal information or otherwise compel the release of personal information;
· Releasing, publicizing, or otherwise publicly disclosing personal information in possession of a public agency, unless otherwise consented to by a 501(c) organization; or
· Requesting or requiring a current or prospective contractor or grantee with the public agency to provide the public agency with a list of entities exempt from federal income tax under Section 501(c) of the Internal Revenue Code to which it has provided financial or nonfinancial support.
The act contains various exceptions to these prohibitions.
Any person or entity may bring a civil action for appropriate injunctive relief, damages, or both. Damages may be not less than $2,500 to compensate for injury or loss caused by each violation of this act and, for an intentional violation, a sum of money not to exceed three times the sum of damages assessed. A court may additionally award all or a portion of the costs of litigation, including reasonable attorney fees and witness fees, to the complainant in the action if the court determines that the award is appropriate. Furthermore, a person who knowingly violates this act is guilty of a Class B misdemeanor. (Section 105.1500)
This provision is substantially similar to a provision in SS/SCS/SB 741 (2022), SCS/HCS/HB 2120 (2022), SS/HB 2400 (2022), HCS/SS#2/SCS/SB 968 (2022), HCS/HB 1030 (2021), SB 464 (2021), and HCS/SS/SB 333 (2021).
LLC CAMPAIGN CONTRIBUTIONS
The act permits any limited liability company that has not elected to be classified as a corporation under federal law to make campaign contributions to any committee, provided such limited liability company has been in existence for at least one year prior to making such contribution and such entity submits a form to the Missouri Ethics Commission indicating that such LLC is a legitimate business with a legitimate business interest and is not created for the sole purpose of making campaign contributions. (Section 130.029)
This provision is substantially similar to a provision in HCS/SS#2/SCS/SB 968 (2022), HCS/HB 1803 (2022), HCS/HB 2157 (2022), and SS/HB 2400 (2022).
TAX CREDIT ACCOUNTABILITY ACT
This act modifies the definition of "domestic and social tax credits" by removing the health care access fund tax credit, which has expired, and by adding the previously authorized health, hunger, and hygiene tax credit.
This act also modifies the definition of "recipient" to provide that such term does not include the transferee of a tax credit. (Section 135.800)
This act requires an applicant for a tax credit, as a part of the application process, to sign a statement affirming that the applicant is aware of the reporting requirements and penalty provisions of the Tax Credit Accountability Act. (Section 135.802)
Current law requires the recipients of tax credits to file annual reports that includes either the estimated or actual project costs. This act requires such reports to include both the estimated and actual project costs.
Additionally, current law requires the administering agency of a tax credit to make available the names of each tax credit recipient. This act allows such information to be made available either on the Department of Economic Development's website or through the Missouri Accountability Portal.
This act modifies a provision providing that a person or entity shall not be required to submit an annual report until at least one year after the credit issuance date by making such time period one month. (Section 135.805)
Current law provides for penalties for a failure to submit required annual reports, with a penalty of 2% of the value of the tax credits for each month of delinquency of more than six months but less than one year, and a penalty of 10% of the value of the credits for each month of delinquency of more than one year. This act modifies such penalties. Failure to file the first annual report for more than three months shall result in a penalty of 1% of the value of the credits, not to exceed 10%. Failure to file the second or third annual report for more than three months shall result in a penalty of 1.5% of the value of the credits, not to exceed 20% per report.
Current law provides for a penalty equal to 100% of the value of the credits for fraud in the tax credit application process. This act increases such penalty to 200% for fraud in the application or reporting process. This act also provides that the Administrative Hearing Commission shall determine whether fraud has occurred. The Department of Revenue, the Department of Economic Development, or the administering agency may file a fraud complaint to the Administrative Hearing Commission, as described in the act.
Current law requires an administering agency to send a notice of delinquency ninety days after the annual report is due. This act changes such requirement to thirty days. This act also allows the Department of Revenue to enter into agreements to compromise or abate some or all of any penalties administered under the act. (Section 135.810)
Current law requires tax credit applicants to forfeit and repay tax credits if such applicant purposely and directly employs unauthorized aliens. This act changes such standard to an applicant knowingly employing unauthorized aliens. (Section 135.815)
These provisions are identical to provisions in SCS/SB 868 (2022), HCS/SS#2/SCS/SB 968 (2022), and SS/HB 2400 (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 act 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/SB 807 (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 INCOME TAX 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/SB 807 (2022).
HEALTH INSURANCE DEDUCTION TAX CREDIT
Current law authorizes a refundable tax credit for self-employed taxpayers who are ineligible for the federal health insurance deduction. This act modifies such tax credit by making it nonrefundable, nontransferable, and not eligible to be carried forward or backward to any other tax year. This act also requires a taxpayer to have a Missouri income tax liability of less than $3,000. A taxpayer shall not be able to claim such tax credit and the state health insurance deduction in current law for the same tax year.
This tax credit shall sunset on December 31, 2028, unless reauthorized by the General Assembly. (Section 143.119)
This provision is identical to a provision in SCS/SB 868 (2022), HCS/SS#2/SCS/SB 968 (2022), and SS/HB 2400 (2022).
SALT PARITY ACT
This act 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 act allows the pass-through entity to elect to pay the tax, as described in the act. 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 act, 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 act, that has elected to pay the tax imposed under this act.
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 act.
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 act. The tax credit shall be equal to the taxpayer's pro rata share of the tax paid under this act. 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 act. The tax credit shall be equal to the corporation's pro rata share of the tax paid under this act. 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 act 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 act on behalf of the affected business entity in any action required or permitted to be taken by an affected business entity pursuant to this act, 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 HCS/SS/SB 807 (2022), HCS/SS#2/SCS/SB 968 (2022), and SS/HB 2400 (2022), and is substantially similar to SB 1154 (2022) and HB 2845 (2022), and to a provision in HCS/HB 1803 (2022), HCS/HB 2157 (2022).
MISSOURI HOUSING DEVELOPMENT COMMISSION
Current law provides that the Missouri Housing Development Commission shall be composed of ten members. This act adds four additional members to the Commission. Two members shall be members of the Senate, one of which shall be from the majority party appointed by the President Pro Tempore and one of which shall be from the minority party appointed by the minority leader. The remaining two members shall be members of the House of Representatives, one of which shall be from the majority party appointed by the Speaker of the House and one of which shall be from the minority party appointed by the minority leader. (Section 215.020)
This provision is identical to a provision in SCS/SB 864 (2022) and SCS/SB 466 (2021).
NAMES OF LIMITED LIABILITY COMPANIES
The act prohibits the name of any dissolved or canceled LLC from being used by any other for a period of one year following the dissolution or cancellation. (Section 347.020)
This provision is identical to a provision in SCS/SB 877 (2022), HCS/HB 1803 (2022), HCS/HB 2157 (2022), SCS/SB 286 (2021), and SCS/HCS/HB 162 (2021).
LIMITED LIABILITY COMPANIES - INFORMATION STATEMENTS
Every limited liability company (LLC) and foreign limited liability company (foreign LLC) is required to file an information statement with the Secretary of State (SOS) once every 5 years, accompanied by a fee of $15, or $5 if filed electronically. The SOS is permitted to administratively cancel the articles of incorporation of an LLC or the registration of a foreign LLC for failure to timely file an information statement. The act provides procedures for allowing a foreign LLC to apply to the SOS to have its registration reinstated following such a cancellation. Procedures are also created allowing an LLC to apply for reinstatement following the erroneous or accidental filing of a notice of winding up or notice of termination. (Sections 347.044, 347.179, 347.183)
These provisions are identical to provisions in SCS/SB 877 (2022), HCS/HB 1803 (2022), and HCS/HB 2157 (2022), and are substantially similar to provisions in SCS/SB 286 (2021) and SCS/HCS/HB 162 (2021).
INVOLUNTARY DISSOLUTION OF LLCS
The modifies the procedure by which a court may decree dissolution of an LLC. Specifically, the court may issue such a decree if it determines:
It is not reasonably practicable to carry on the business in conformity with the operating agreement;
Dissolution is reasonably necessary for the protection of the rights or interests of the complaining members;
The business of the limited liability company has been abandoned;
The management of the limited liability company is deadlocked or subject to internal dissension; or
Those in control of the limited liability company have been found guilty of, or have knowingly countenanced, persistent and pervasive fraud, mismanagement, or abuse of authority. (Section 347.143)
This provision is identical to a provision in SCS/SB 877 (2022), HCS/HB 1803 (2022), and HCS/SS#2/SCS/SB 968 (2022).
FILING FEES
The act reduces various filing fees imposed on LLC's and partnerships for filing certain documents with the SOS and provides for reduced fees for filing certain documents in an electronic format. Additionally, the act creates the following new fees:
A fee of $95 for filing a withdrawal of an erroneously or accidentally filed notice of winding up or articles of termination;
A fee of $10 for a filing relating to a limited liability series an additional fee of ten dollars for each series effected or $5 if filing online in an electronic format prescribed by the secretary; and
A fee of $95 for filing an application for reinstatement or $45 for filing online in an electronic format prescribed by the secretary. (Sections 347.179, 347.183, 358.460, and 358.470)
These provisions are identical to provisions in SCS/SB 877 (2022), HCS/HB 1803 (2022), and HCS/HB 2157 (2022), and are substantially similar to provisions in SCS/SB 286 (2021) and SCS/HCS/HB 162 (2021).
SERIES LLCs
For purposes of Series LLCs, the maximum number of designated series that can be affected by a single filing made with the Secretary of State is 50. (Section 347.186)
This provision is identical to a provision in SCS/SB 877 (2022), HCS/HB 1803 (2022), HCS/HB 2157 (2022), and SCS/HCS/HB 162 (2021).
MEDICAL MARIJUANA FACILITIES
This act allows any entity that operates as a medical marijuana facility licensed or certified under Article XIV, Section 1 of the Constitution of Missouri to request in writing that a state or local licensing authority or agency, including but not limited to the Department of Health and Senior Services or Department of Revenue, share the entity's application, license, or other regulatory and financial information with a banking institution. Such written request must include a waiver giving authorization for the transfer of the individualized data, information, or records and waiving any confidentiality or privilege that applies to that individualized data, information, or records. A state or local licensing authority or agency is permitted to share the entity's information with the banking institution's state and federal supervisory agencies as well. (Section 362.034)
This provision is identical to SCS/SB 716 (2022) and SCS/SB 489 (2021).
CHARITABLE ORGANIZATIONS
Under this act, the state shall not impose any additional annual filing or reporting requirements on a charitable organization that are more stringent, restrictive, or expansive than the report already required to be submitted to the Attorney General's office unless such filing or report is specifically required by federal law.
This provision shall not apply to labor organizations, state grants or contracts, or investigations by the Attorney General of charitable organizations as set forth in state statute.
The restriction on additional annual filing or reporting requirements on a charitable organization shall not apply when such organization is providing any report or disclosure required by state law to be filed with the Secretary of State. (Section 407.475)
This provision is identical to a provision in HCS/SS#2/SCS/SB 968 (2022) and SS/HB 2400 (2022), and is substantially similar to HB 1490 (2022), HB 245 (2021), and to provisions in CCS/HCS/SS/SB 333 (2021).
RESTRICTIVE COVENANTS
This act provides that a reasonable covenant in writing promising not to solicit, induce, persuade, encourage, accept business from, or otherwise interfere with, directly or indirectly, a business entity's customers shall be enforceable if certain requirements are met.
If a covenant is overbroad, overlong, or otherwise not reasonably necessary to protect the protectable interests of the business entity seeking enforcement of the covenant, a court shall modify the covenant, enforce the covenant as modified, and grant only the relief reasonably necessary to protect such interests.
This provision shall not be construed to limit an owner's ability to seek or accept employment with another business entity as stated in the act. (Sections 431.201 and 431.204)
This provision is identical to a provision in HCS/SS#2/SCS/SB 968 (2022), and is substantially similar to SB 833 (2022) and HB 1688 (2022), and to provisions in SB 181 (2021), SCS/HCS/HB 1242 (2021), HB 1008 (2021), SCS/HCS/HB 1204 (2021), SB 922 (2020), and HB 2684 (2020).
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 ten 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 forty-five 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 eleven 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 two-thirds majority vote of the members of the Advisory Committee, and further provided that such vote shall be taken within fifteen 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 forty-five 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 forty-five 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 substantially similar to SB 1068 (2022) and to provisions in SS/HCS/HB 2587 (2022), HCS/SS/SB 807 (2022), and HCS/SS#2/SCS/SB 968 (2022).
JOSH NORBERG