- Truly Agreed To and Finally Passed -

CCS/HS/HCS/SB 827 - This act makes the following changes in the area of economic development tax credits and incentives.

Sections 32.110 and 32.115 - Increases by $6 million the aggregate amount of tax credits which may be authorized under the neighborhood assistance program;

Section 135.100 - Adds to the definition of "revenue producing enterprise", for purposes of the new business facility and enterprise zone tax credits, local exchange telecommunications services or training activities by a local exchange telecommunications company;

Section 135.110 - Clarifies that a refund of tax credits under the new business facility law is limited to employee-owned engineering firms, architectural firms or accounting firms;

Section 135.208 - Requires the Department of Economic Development to designate an enterprise zone in Independence and in Camden County;

Section 135.400 - Exempts cooperative marketing associations from compliance with certain revenue limits and ownership requirements for the Missouri small business tax credit program;

Section 137.115 - Reduces to 25% the personal property assessed valuation percentage for tools and equipment used for pollution control and for retooling by any company located in a state enterprise zone and identified by specific standard industrial classification numbers;

Sections 253.557 and 253.559 - Authorizes the historic building rehabilitation tax credit to be taken against financial institutions tax. Not-for-profit entities, including not-for-profit corporations, are not eligible for the credit. Taxpayers entitled to the credit may transfer or assign such credits;

Section 260.285 - Removes the current sunset of October 1, 2001, from the provision authorizing a tax credit for state sales and use taxes paid on recycled flexible cellulose casing;

Sections 447.700, 447.701, 447.702, 447.704, 447.706, 447.708 - Makes several changes to the "brownfields" program, which authorizes tax credits for remediation of abandoned property. Privately owned property is eligible for financial assistance under the brownfields program if the city or county approves the project. The act adds demolition as an allowable cost and clarifies that grants can only be made for public capital improvements. Parties who intentionally or negligently caused the release of hazardous substances are prohibited from remediation assistance. The Director of the Department of Economic Development may consider the direct and indirect economic benefits to be provided by the eligible project. The total amount of state funding, tax credits or tax exemptions is limited to the projected state economic benefit. Sales of any abandoned or underutilized property within 5 years of receiving remediation tax credits, grants, loans or loan guarantees will require repayment of a portion of the owner's investment.

Tax credits are allowed against corporation franchise tax and financial institutions tax. Any property tax abatement for an eligible project must be for at least fifty percent for ten to twenty five years. The Department of Economic Development is given discretion to provide tax credits of up to 100% of eligible remediation costs, but total state incentives are limited to the net state economic impact of the project or the least amount which enables the project to occur. The act allows the recipient of remediation tax credits, rather than the operator of an eligible project, to sell or transfer the tax credits;

Section 620.1023 - Allows the city of Pine Lawn to receive grants or loans from the business extension service team fund for qualified community development projects. Up to 5% of the funding may be used for administrative costs;

Section 620.1039 - Requires the director of the department of economic development to approve any tax credit for qualified research expenses. The total tax credits to be granted is limited to $10 million per taxable year;

Section 1 - Authorizes a strategic initiative investment income tax refund for automobile manufacturers or assemblers located within a state enterprise zone. The company must have invested a minimum of $100 million in new facilities or equipment and the tax credits for the company for years 1994-1997 must have exceeded the company's total state income tax for those years by at least $20 million. The maximum amount of refund per company is limited to $2 million per year;

Section 2 - Authorizes a credit against income tax and financial institutions tax for up to 50% of the amount of investment in production or production-related activities by a qualified film production company. Taxpayers claiming the credit must first apply to the department of economic development and document the economic impact from the production company's activities. The tax credit is limited to $500,000 per taxpayer; the total amount of the credit is capped at $1 million per year. The tax credits may be sold, assigned or transferred; and

Section 3 - Authorizes an income tax credit equal to 25% of the purchase price of all new equipment and materials used directly in growing grapes or producing wine within the state. Each grower and producer is required to apply to the department of economic development and specify the total amount of qualified expenditures for the calendar year. The credit is limited to five tax periods.

This section is similar to the provisions of SB 469 (1998).

RUSS HEMBREE