- Introduced -

SB 1117 - This act makes various changes to economic development programs relating to distressed communities and small business investment tax credits.

The act:

(1) Changes the definition of a community development corporation to stress industrial, economic, entrepreneurial, commercial and civic development of projects that benefit low-income individuals and communities;

(2) Lowers the investment requirement of principal owners of Missouri small businesses eligible for investment from 50% of the business to 35% of the business;

(3) Eliminates the designation of a "target area" for purposes of identifying areas of poverty by the Department of Social Services;

(4) Reduces the statewide limit on all tax credits for investments in a small business per year from $13 million to $5.5 million and reduces the minimum amount within distressed communities from $4 million to $2.75 million;

(5) Increases the maximum percentage of investment ownership allowed in a small business to qualify for a tax credit from 50% to 65%;

(6) Reduces the time period requirement for investment in a small business from 5 years to 3 years and excludes any sale, change of control, or the going public of a business from the minimum period of time for investment for purposes of the small business investment tax credit program;

(7) Reduces the percentage of employees required to be located at a business contained within distressed communities from 75% to 60% and increases the maximum number of employees at a business contained within a distressed community from 100 to 150 to qualify for the distressed communities tax credit program;

(8) Allows the leasing of certain technology equipment to qualify as an expense for purposes of obtaining a tax credit and increases the maximum tax credit for such equipment expense from $75,000 to $150,000;

(9) Increases the allowable tax credit percentage of the amount of qualified contribution to a qualified fund for purposes of tax credits for contributions to innovation centers from 50% to 75% and reduces the aggregate maximum statewide credits for contributions to innovation centers from $9 million to $4.5 million annually;

(10) Allows any unused credits for these tax credit programs from the previous year to be added to any statewide caps for these programs in future years;

(11) Expands the availability of follow-up capital to include businesses which have previously received follow-up capital within the last 3 years for purposes of tax credits for contributions to innovation centers;

(12) Requires the Department of Economic Development to pursue a revocation of the tax credits only from the original applicant for the tax credit.

This act contains an emergency clause. This act is similar to HB 215 (2001).

JEFF CRAVER