ECONOMIC DEVELOPMENT TAX BOARDS

(Section 67.1305)

This act allows a city that adopts or has already adopted a local option economic development sales tax to increase the number of members on the economic development tax board. The city will designate by order or ordinance whether the board has five or nine members. If the city designates a nine member board, the area school districts and the county will each appoint one new member to the board, and the city will appoint two new members to the board. The act also specifies how the board members terms are staggered.

This provision is identical to a provision of HCS/HB 1865(2012) and similar to a provision of SCS/HCS/HB 1623 (2012) and SB 845 (2012).

ALTERNATIVE FUEL DECAL

(Section 142.869)

This act adds vehicles powered by hydrogen to those vehicles that are not required to pay the motor fuel tax and instead pay for a alternative fuel decal. This act also increases the fee for the alternative fuel decal from $75 to $140 for a passenger motor vehicle, school bus, or a commercial vehicle with a gross weight of eighteen thousand pounds or less, from $100 to $185 for a licensed farm vehicle with a gross weight of eighteen thousand pounds but no more than thirty-six thousand pounds and for passenger-carrying commercial vehicles, from $250 to $470 for a licensed farm vehicle with a gross vehicle weight greater than thirty-six thousand pounds, and from $1,000 to $1,880 for a vehicle with a gross vehicle weight greater than thirty-six thousand pounds. The fee for a temporary decal for a nonresident's vehicle is increased from $8 to $12. These fees will no longer be deposited in the Motor Fuel Tax Fund. The alternative fuel decal fee for all new alternative fuel or hydrogen-powered vehicles assembled in Missouri will be one-half the fee amount.

This provision is similar to HB 1960 (2012).

START-UP COMPANIES

(Section 620.007)

Under this provision the Department of Economic Development is required to define what constitutes a "start up company." These companies will be required to provide verification of financial information when the company applies for economic development incentives, if the incentive is provided up-front.

This provision is identical to a provision of HCS/HB 1865 (2012) and HCS/HB 1710 (2012).

ADVERSE INFORMATION ABOUT COMPANIES SEEKING ECONOMIC DEVELOPMENT INCENTIVES

(Section 620.009)

This provision requires the Department of Economic Development to share electronic copies of all adverse information it has about any company seeking state and local economic development incentives with all local governments, economic development organizations and officials that are competing for the company's business. Local governments, economic development organizations and officials are also required to share adverse information about a company with the department. All adverse information the department receives shall be a closed record.

This provision is identical to a provision of HCS/HB 1865 (2012) and HCS/HB 1710 (2012).

THE DEPARTMENT OF ECONOMIC DEVELOPMENT'S OPINION ON ECONOMIC DEVELOPMENT INCENTIVES

(Section 620.019)

This provision requires the Department of Economic Development to develop a ratings system to share with local governments the department's opinion on proposals for discretionary economic development incentives that combine local and state resources.

This provision is identical to a provision of HCS/HB 1865 (2012) and HCS/HB 1710 (2012).

ECONOMIC INCENTIVES FOR CERTAIN AUTOMOTIVE SUPPLIERS

(Sections 620.478 and 620.1910)

This act modifies the Manufacturing Jobs program to expand the eligibility for this program to additional suppliers of automotive manufacturers and increase the benefits available to these suppliers under the program. The act also requires the Department of Economic Development to make efforts to prioritize the use of funding under the Missouri Job Development Fund to these suppliers.

Currently, companies that supply automotive manufacturers are eligible to retain withholding taxes under the Manufacturing Jobs program, if the company is a manufacturer that: 1)receives more than 10% of company annual sales from sales to automotive manufacturers with facilities in Missouri; 2)adds at least five new jobs with an average wage greater than the county average wage; and 3)provides health insurance for all full-time jobs. This act expands the requirements, so that companies that supply automotive manufacturers will also be eligible for the program, if the company: 1)adds at least two new jobs and makes an investment of at least one hundred thousand dollars in their manufacturing facilities; 2)receives more than 10% of company annual sales from sales of a product that is sold to someone other than a in-state automotive manufacturer, but the product is used by a manufacturer in an automobile; or 3)receives more than 50% of company annual sales from modifying vehicles for commercial or public use.

Under current law, the Manufacturing Jobs program allows eligible automotive manufacturer suppliers to retain withholding tax from the new jobs for three years, or for five years, if the wages for the new jobs are at least 120% of the county average wage. This act allows these suppliers to retain withholding taxes from the new jobs for five years, in an amount equal at the least to 5 1/2 % of new payroll and at the most to 6 1/2% of new payroll, depending on the average wages of the new jobs. If the amount of withholding taxes the supplier is allowed to retain is less than the amount of the benefit under the program, the Department of Economic Development shall issue the supplier a refundable tax credit. If the supplier is also participating in the New Jobs Training Program the supplier is prohibited from retaining withholding tax, but the department is required to issue a refundable tax credit for the amount of the benefit allowed under this program. The amount of withholding tax the supplier retains under the New Jobs Training program will be in addition to the maximum amount of tax credits that the supplier could otherwise be issued each year, unless the total amount of tax benefits under both programs exceeds the projected benefit to the state from the project.

These provisions are similar to SB 691 (2012).

MISSOURI QUALITY JOBS ACT

(Section 620.1878, 620.1881)

Currently, under the Quality Jobs program a company must make either seventy million dollars in new investment in two years or thirty million dollars in new investment in two years while maintaining at least a seventy million dollar annual payroll to be eligible for the tax credits for job retention. This act lowers the minimum required investment from seventy million dollars to fifty million dollars and increases the amount of time the company has to make this investment to five years.

Currently, no new tax credits for job retention projects may be issued for projects approved by the Department of Economic Development after August 30, 2013. This act extends this deadline until August 30, 2018.

This act also creates a new tax incentive for qualified companies for retaining jobs. The Department of Economic Development may allow qualified companies, that agree to retain at least one hundred and twenty-five existing jobs with an average wage equal to or in excess of ninety percent of the county average wage for at least ten years and agree to make a capital investment equal to one-half times the amount of state benefits provided within three years, to retain withholding taxes from the retained jobs for a period of ten years. The company may choose to receive up to eighty percent of the amount the company would be eligible to retain in the form of tax credits capable of being issued upon approval of the project. These tax credits may be issued immediately or over a three year period. In order to receive the job retention benefits, a qualified company must enter into a written agreement with the department providing detailed performance requirements and recapture provisions. The Department of Economic Development is required to notify the president pro tem of the Senate and the speaker of the House prior to allowing the retention of withholding taxes or awarding tax credits under this provision. The amount of tax credits authorized under this provision of the program is capped at six million dollars annually and cannot exceed the projected net state benefit.

As an alternative to all other benefits available under the program, for calendar years 2013 and 2014, the Department of Economic Development may provide up-front financing to qualified companies in the form of refundable tax credits capable of being issued upon approval of the project. To receive such benefits, a qualified company must enter into a written agreement with the department that provides performance requirements and clawback provisions. Qualified companies in targeted industries could receive tax credits equal to as much as nine percent of new payroll projected over a five year period. Non-targeted industry qualified companies could receive tax credits equal to as much as seven percent of new payroll projected over a five year period. The Department of Economic Development is required to notify the President Pro tem of the Senate and the speaker of the House prior to awarding tax credits under this provision. The amount of tax credits authorized under this provision of the program is capped at ten million dollars annually and cannot exceed the projected net state benefit.

This provision is similar to a provision of HCS/HB 1245 (2012), HCS/HB 1710 (2012) and SB 280 (2011).

LINKED DEPOSIT LOANS

(Section 1)

This provision provides that a company that is no longer eligible for a loan, loan guarantee, or grant under the Small Business Incubator program may apply for a loan under the linked deposit loan program if the company can demonstrate economic growth. If the company is accepted for a linked deposit loan package the company is eligible for a one half point discount of the charged interest rate.

CONSULTING CONTRACTS FOR TRADE OFFICES

(Section 2)

This provision requires the Department of Economic Development to include a conflict of interest policy in all new consulting contracts for trade offices in foreign countries.

This provision is identical to a provision of HCS/HB 1865 (2012) and HCS/HB 1710 (2012).

EMILY KALMER