Missouri Senate

Senate Committee Substitute

The act requires municipalities to disclose to any land owner whose property is acquired that such land is being acquired for a TIF project. It also requires municipalities to disburse all surplus funds from the special allocation fund to each taxing district in the manner described in law, whether by statute or by contract. The provision providing for any municipality in a county under the authority of the East-West Gateway Council of Governments to create a TIF commission in the same manner as the creation of a TIF commission in St. Louis County is repealed. The provision requiring any city, town, or village under the authority of such Council to obtain permission of the county TIF commission is also repealed.

Beginning August 28, 2008, any city, town, or village in St. Louis County, St. Charles County, or Jefferson County shall, prior to adoption of an ordinance approving the designation of a redevelopment area or approving a redevelopment plan/project, create a commission of twelve people. Six members shall be appointed by the county executive or presiding commissioner, three members shall be appointed by the cities, towns, and villages in the county which have TIF districts, two members shall be appointed by the school boards in the county, and one member shall represent all other taxing districts in the proposed redevelopment area and be appointed in a manner agreed upon by all such districts. A city, town, or village that creates such a commission must send notice to the county executive or presiding commissioner, school districts, and other taxing districts.

Any commission created by a city, town, or village in such counties shall, within 15 days of receiving a redevelopment plan and a request by the applicable city, town, or village, fix a time and place for the required public hearing. The hearing shall be held no later than 75 days from the commission receiving the plan and request. The commission shall vote and make recommendations to the governing body of the city, town, or village requesting the hearing within 30 days after the hearing. If the commission fails to vote within 30 days, the plan will be deemed rejected.

Section 99.825 is currently doubly-enacted, so one version of the section is repealed. Any public hearing of a commission created by a city, town, or village in St. Louis County, St. Charles County, or Jefferson County shall not be continued for more than thirty days unless requested by the chief elected official of the municipality creating the commission and approved by the majority of the commission.

Changes may be made to the redevelopment plan without further hearing provided there is no enlargement of the boundaries of the redevelopment area, substantial effect on the general land use, change in the nature of the redevelopment project, or increase in the total redevelopment costs approved by the commission to be paid by TIF, excluding interest and finance costs, by more than 10% and notice of such changes is given to each affected taxing district by mail and publication in the newspaper.

After adoption of an ordinance approving a redevelopment plan, alterations to the plan may be made provided they do not: enlarge the boundaries of the redevelopment area, substantially affect the general land use, change the nature of the redevelopment project, or increase the total redevelopment costs approved by the commission to be paid by TIF, excluding interest and finance costs, by more than 10% may be adopted.

The act permits the Department of Economic Development to authorize up to five million dollars in tax credits per year to encourage equity investment in technology-based early stage Missouri companies, commonly referred to as angel investments. Investors who contribute the first five hundred thousand dollars in equity investment to a qualified Missouri business may be issued a tax credit equal to thirty percent of the investment or forty percent if the qualified business is in a rural area or distressed community. An investor can receive a credit of up to fifty thousand dollars for an investment in a single qualified business and up to one hundred thousand dollars for investments in more than one qualified business per year. Credits can be carried forward for up to three years or sold.

The aggregate cap on the amount of tax credits the department of economic development may authorize for the Small Business Incubators Program is increased from five hundred thousand dollars to two million dollars. The act places certain reporting requirements on small business incubators and the department of economic development. Currently, some demolition activities associated with Brownfield redevelopment are separate from remediation activities. The act specifies that all demolition activities are part of remediation and allows remediation tax credits to include up to one hundred percent of demolition costs that are not directly part of the remediation, but which are necessary to accomplish the planned use of the facility. Demolition may occur on adjacent property that independently qualifies as abandoned or underutilized and is located in a municipality with fewer than 20,000 residents.

The act allows community improvement districts (CID) to exist in special business districts within the City of St. Louis. Currently, any CID in St. Louis which is also in a special business district cannot levy a CID sales tax unless special assessments imposed on real property or businesses within the special business district are repealed. Sales by public utilities and providers of communications, cable, or video services will be exempt from the CID sales tax.

An existing headquarters may receive tax credits for new or expanded business facilities for expansions done before January 1, 2018. At least twenty-five new employees and at least one million dollars in new investment must be attributed to the expansion. Buildings on multiple, non-contiguous property will be considered one facility if the buildings are within five miles of each other.

The act creates an income tax credit equal to fifty percent of the amount a taxpayer paid to purchase and install idle reduction technology on a class 8 truck. The maximum amount of the tax credit is $3,500 per truck. The tax credit is nontransferable and nonrefundable, but may be carried forward up to three years until completely claimed. No more than ten million dollars in tax credits may be issued annually and no more than twenty million dollars in tax credits may be issued throughout the life of the program. The provisions of the act automatically sunset two years after August 28, 2008, unless reauthorized.

The director of the Department of Economic Development is authorized to issue letter rulings regarding the New Markets Tax Credit Program. The letter rulings are binding in a court of law and must be issued within sixty days of a request. The department can refuse to issue the letter ruling for good cause, but must explain the reason for refusal. Letter rulings are closed to the public, however information can be released as long as anything which would identify the applicant or is otherwise protected is redacted.

Any applicant for state tax credits who purposely and directly employs unauthorized aliens must forfeit any tax credits issued to such applicant which have not been redeemed, and any tax credits redeemed by such applicant will be recaptured for the period of time in which the applicant employed unauthorized aliens. Under current law, up to one hundred thousand dollars in tax credits from the Rebuilding Communities Tax Credit Program can be issued to taxpayers who modify their home to be accessible for a disabled individual who resides with the taxpayer. This act allows all unused tax credits from the Rebuilding Communities Tax Credit Program to be used by taxpayers who modify their homes for this purpose. The terms "disability" and "senior" are defined for purposes of the tax credit for home modification for disabled persons.

The act specifies that the true value in money for property tax assessment purposes of any possessor interest in real property located on or within the ultimate airport boundary shown by a federal airport layout plan of the Kansas City International Airport will be the true value in money of the possessor interest in the real property less the total costs paid toward any new construction or improvements completed on the property after January 1, 2008, if included in the possessor interest, unless paid by the political subdivision, regardless of the year the costs were incurred. The act authorizes a property tax credit, beginning January 1, 2009, for expenses incurred to manufacture, maintain, or improve a freight line company's qualified rolling stock up to the amount of its tax liability. The state will annually reimburse a political subdivision for any loss in revenue.

The act exempts from state and local sales and use tax sales of weather radios. Sales of certain utilities and machinery and equipment, which are used or consumed in a business facility located in a portion of an underground mine that contains at least one million square feet of space, provided such business has been approved as a qualified company under the Quality Jobs Program, are also exempted from state and local sales and use tax. An exemption from state and local sales and use tax is created for all tangible personal property included on the United States munitions list which is sold to or purchased by a foreign government for a governmental purpose. Currently, this exemption is granted by the Department of Revenue through a letter ruling.

The aggregate amount of tax credits that may be issued per fiscal year for the Agricultural Product Utilization Contributor tax credit and the New Generation Cooperative Incentive tax credit are increased from six million dollars to ten million dollars.

The Missouri Agricultural and Small Business Development Authority is allowed to issue up to one million dollars in Agricultural Product Utilization tax credits in any fiscal year to individuals contributing cash funds to the Authority. The Authority may issue additional Agricultural Product Utilization tax credits under certain circumstances. Currently, both tax credit programs are scheduled to expire on December 31, 2010. The act extends the expiration date until December 31, 2016.

For purposes of Urban Redevelopment Corporations Law, the makes any earnings limitation, imposed on any purchaser that is not an urban redevelopment corporation or life insurance company operating as an urban redevelopment corporation, void.

The act specifies that any use of travel club membership benefits during the three-day rescission period of the membership contract will not effectively waive the member's right to rescind the contract.

The act creates the entrepreneurial development council within the Department of Economic Development. The council will consist of seven board members from business and legal experts in the area of intellectual property. The council may impose a registration fee for entrepreneurs wishing to receive council benefits. The act creates the entrepreneurial development and intellectual property right protection fund to receive appropriations, grants, gifts and bequests. The council has the authority to allocate moneys from the fund to provide financial assistance for legal actions instituted by registered entrepreneurs alleging infringement of their intellectual property rights. The council may also allocate moneys from the fund to registered entrepreneurs for financial assistance for the development, manufacture and advertising of new products.

The Qualified Research Expense tax credit is limited to research expenses incurred in the research and development of agricultural/biotechnology and plant genome products, and prescription pharmaceuticals consumed by humans or animals. The act modifies the time-line for application and issuance of tax credits under the program. Under current law, no qualified research expense tax credits may be approved, awarded or issued after January 1, 2005. This act removes the prohibition on approval and issuance of tax credits and increases the annual tax credit cap from nine million seven hundred thousand to ten million dollars. In the event the amount of claims for tax credits exceed the annual cap, the act provides a method for pro rating issuance of tax credits.

Currently, the Department of Economic Development cannot issue more than forty million dollars in tax credits annually under the Quality Jobs Act. The act removes cap on the annual issuance of tax credits. Under current law, tax credits for job retention projects are only authorized through August 30, 2007. The act extends the authorization to August 30, 2013. Under the Quality Jobs Act, a project facility may include separate buildings if they are located within one mile of each other. The act allows a project facility to include separate buildings within the same county. Companies which lease or own facilities that produce electricity derived from qualified renewable energy sources, or which produce fuel for the generation of electricity from qualified renewable energy sources are allowed to participate in the quality jobs program as a technology business project if all other requirements of the program are met. Qualified renewable energy sources include open-looped biomass, close-looped biomass, solar, wind, geothermal, and hydropower but not ethanol distillation or production or biodiesel production.

The provisions of the act regarding the Small Business Incubators Program will become effective upon passage and approval.

JASON ZAMKUS