SB 2 - This act modifies provisions of existing tax credit programs in a manner consistent with the recommendations of the Tax Credit Review Commission and establishes new tax incentive programs. TAX CREDITS TO ATTRACT SPORTING EVENTS
The act creates a refundable income and financial institutions tax credit which may be available for sports commissions, convention and visitors bureaus, certain nonprofit organizations, counties, and municipalities to offset expenses incurred in attracting sporting events to the state. Applicants for the tax credit must submit game support contracts to the department of economic development for approval. The tax credit will be equal to the lesser of five dollars for each admission ticket sold for the event or one hundred percent of eligible expenses incurred. No more than three million dollars in tax credits may be issued per fiscal year. The tax credits are fully transferrable, provided a notarized endorsement is filed with the Department of Economic Development. The Department of Economic Development is prohibited from certifying game support contracts after August 28, 2017, but may certify game support contracts prior to such date which pertain to games to be held after August 10, 2017.
The act also creates an income tax credit equal to fifty percent of the amount of an eligible donation made, on or after January 1, 2011, to a certified sponsor or local organizing committee for the purposes of attracting sporting events to the state. The tax credit may not be applied against withholding taxes. The tax credit is non-refundable, but may be carried forward four years. The tax credit is transferable. Certified sponsors and local organizing committees may apply to the department of economic development for the tax credits. Applications for tax credits must be accompanied by payment in an amount equal to the tax credits requested. The Department of Economic Development is prohibited from issuing more than ten million dollars in tax credits each fiscal year. The provisions of this act shall automatically sunset six years after the effective date of the act unless reauthorized.
DISTRESSED AREAS LAND ASSEMBLAGE TAX CREDITS
The definition of the term "acquisition costs" is modified to include any portion of reasonable demolition costs of vacant structures. The act removes the five year limitation on qualifying interest costs and allows applicants to apply for tax credits on a quarterly rather than annual basis. The issuance of tax credits will be made on a first-come first serve basis. The cap on annual issuances of tax credits is reduced from twenty million dollars to fifteen million dollars for all calendar years beginning January 1, 2012.
AEROTROPOLIS TRADE INCENTIVE AND TAX CREDIT ACT
The Aerotropolis Trade Incentive and Tax Credit Act is established, which authorizes the City of St. Louis or any county to designate certain areas as gateway zones. Any such municipality that designates an area as a gateway zone will be required to establish a board of supervisors that will annually levy special assessments on facilities located within the zone which receive benefits provided under the act. Revenues derived from the special assessments will be expended to promote and advertise the gateway zone.
For all taxable years beginning on or after January 1, 2011, the act authorizes air export tax credits for freight forwarders in an amount equal to thirty cents per chargeable kilo shipped on a qualifying outbound flight. In lieu of the previously mentioned tax credit, a freight forwarder will be entitled to an air export tax credit equal to thirty-five cents per chargeable kilo if the shipment contains perishable freight. The department of economic development is required to adjust the tax credit amounts based upon fluctuations in fuel costs for over-the-road transportation. In order to receive air export tax credits, freight forwarders must file an application with the department containing the master airway bill for the shipment. The act requires the department to establish procedures to allow freight forwarders to receive air export tax credits within ten business days of the departure of the qualifying flight.
The total amount of air export tax credits which may be authorized under the act cannot exceed sixty million dollars. The act establishes annual caps on issuance of air export tax credits, and to the extent that in any given year more tax credits are authorized than may be issued, the amount in excess of the cap on issuance will be carried forward for issuance in the following year. The authorization of air export tax credits is prohibited after August 28, 2019, but the act allows for the subsequent issuance of any tax credits which are authorized prior to such date.
For all taxable years beginning on or after January 1, 2013, any tenant operating within an eligible facility which satisfies the requirements of the act and employees of such tenant will be entitled to an exemption from local earnings taxes imposed by the City of St. Louis for a period of up to seven years.
For all taxable years beginning on or after January 1, 2013, owners of qualified facilities, in which at least twenty percent of the total cargo activity consists of international cargo, will be entitled to receive tax credits over a seven-year period equal to six percent of the eligible costs of such facility, provided such owner can demonstrate that at least ten new jobs are projected to be created at the facility by the end of the eligibility period. The total amount of tax credits issued to such an owner cannot exceed thirty percent of the facility's eligible costs. Owners of qualified facilities, in which at least ten percent of the total cargo activity consists of international cargo, as well as any qualifying assembly and manufacturing, or qualifying cold-chain facility will be entitled to receive tax credits over a seven-year period equal to four percent of the eligible costs of such facility, provided such owner can demonstrate that at least ten new jobs are projected to be created at the facility by the end of the eligibility period. The total amount of tax credits issued to such an owner cannot exceed twenty percent of the facility's eligible costs.
In order to receive tax incentives provided under the act, owners and tenants of qualifying facilities and entities operating within such facilities must file applications with the Department of Economic Development accompanied by a certificate of compliance. The act establishes limits on the amount of tax credits which may be issued annually to owners of qualifying facilities. No more than three hundred million dollars in tax credits, based upon the eligible costs of a qualifying facility, may be authorized for owners of qualified facilities under the act.
All tax credits provided under the act will be fully transferrable and non-refundable, but may be carried forward up to six years.
The provisions of the act establishing the aerotropolis trade incentive and tax credit act will automatically sunset sixteen years from the effective date of the act unless reauthorized.
DATA CENTERS
The act authorizes state and local sales and use tax exemptions for new and expanding data centers and permits donation lease agreements between municipalities and data center projects.
MOSIRA
The act establishes the Missouri Science and Reinvestment Act which, subject to appropriation, will provide funding for incentives to attract science and innovation companies to the state.
MO JOBS TRAINING PROGRAM
The act establishes the MO Jobs Training Program which will provide financial assistance for job training for new jobs created by qualified companies. Financial assistance will also be available to business and technology centers established by Missouri community colleges, or state-owned postsecondary technical colleges, to provide business and training services for growth industries. The act provides for the diversion of withholding taxes from new or retained jobs of qualified companies to pay costs incurred by new or retained jobs training projects administered by local educational agencies such as community and technical colleges.
The provisions of the act creating the MO Jobs Training Program will automatically sunset July 1, 2018, unless reauthorized.
MISSOURI QUALITY JOBS
Provisions of the Missouri Quality Jobs Act are modified to provide additional benefits for job retention projects. In lieu of all other job retention benefits currently available under the Quality Jobs Act, a qualified company may be eligible to retain one hundred percent of withholding taxes for all full-time employees for up to ten years, if such company retains at least one hundred and twenty-five jobs over a ten year period and within two years makes capital investment at the facility equal to no less than three times the amount of benefits received. The department of economic development is prohibited from authorizing the retention of withholdings taxes in excess of:
1) Three million dollars for FY 2012;
2) Four million dollars for FY 2013;
3) Five million dollars for FY 2014; and
4) Six million dollars for FY 2015 and each subsequent fiscal year.
In addition, a qualified company may receive refundable tax credits equal to eighty percent of withholdings taxes for full-time employees that such company could otherwise retain over a five-year period. Such tax credits will be subject to appropriation. The Department of Economic Development is prohibited from awarding an amount of job retention benefits to any project which would exceed the net state benefit of the project.
RETALIATORY TAXES
The act prohibits an insurance company claiming a state premium tax credit or deduction from be required to pay any additional retaliatory tax under Section 375.916 as a result of claiming the credit or deduction.
TAX CREDIT REFORM
This act also modifies provisions of Missouri tax credit programs in accordance with recommendations made by the Missouri Tax Credit Review Commission Report.
SPECIAL NEEDS ADOPTION TAX CREDITS
The act makes international adoptions ineligible for special needs adoption tax credits.
LOW-INCOME HOUSING TAX CREDITS
The act establishes a one hundred ten million dollar fiscal year cap for authorizations of 9% low-income housing tax credits. Authorizations of 4% low-income housing tax credits are capped at twenty million dollars each fiscal year from FY 2012 - FY 2015. The act prohibits the authorization of 4% low-income housing tax credits after June 30, 2015. The stacking of state 9% low-income housing tax credits with state historic preservation tax credits for the same project is prohibited. The carry-back for low-income housing tax credits is reduced from three years to two years.
WINE AND GRAPE PRODUCER TAX CREDITS
Beginning January 1, 2012, the authorization of wine and grape producer tax credits will be limited to no more than two hundred thousand dollars each year.
RESIDENTIAL TREATMENT AGENCY TAX CREDITS
Under current law, residential treatment agencies are prohibited from applying for residential treatment agency tax credits in an amount greater than forty percent of the payments received by the agency from the Department of Social Services. This act would allow residential treatment agencies to apply for such tax credits in an amount which does not exceed the amount of payments received by the agency from the Department of Social Services.
HISTORIC PRESERVATION TAX CREDITS
Under current law, the Department of Economic Development is prohibited from issuing more than one hundred forty million dollars in historic preservation tax credits in any fiscal year for projects which will receive more than two hundred and seventy-five thousand dollars in tax credits. Beginning fiscal year 2012, and each fiscal year thereafter, this act would prohibit the Department of Economic Development from approving more than eighty million dollars in historic preservation tax credits increased by the amount of any recisions of approved applications for tax such credits. Projects which would receive less than two hundred seventy-five thousand dollars in tax credits will be subject to a ten million dollar fiscal year cap.
The act prohibits the department from issuing more than one hundred twenty-five thousand dollars in historic preservation tax credits per project for non-income producing residential rehabilitation projects. Applicants for projects that, as of June 30, 2011, have: received approval from the Department of Economic Development; incurred certain levels of expenses; or received certification from the state historical preservation officer will not be subject to the new limitations on tax credit issuance, but will be subject to the current law limitations on tax credit issuance. The act also prohibits the stacking of state historic preservation tax credits with state 9% low-income housing tax credits. Historic preservation tax credits will now be capable of being carried back one year or forward five years.
The act requires historic preservation tax credit applications to include a cost certification performed by a licensed certified public accountant. Within forty-five days following receipt of a tax credit application and cost certification, the Department of Economic Development must issue the lesser of seventy-five percent of the amount of tax credits certified as eligible under the cost certification or the amount of tax credits the project was preliminarily approved to receive. Within one hundred fifty days following the receipt of the tax credit application and cost certification the department of economic development must determine the final amount of tax credits available for the project and, if applicable, issue any remaining credits. If the department determines more tax credits were issued during the preliminary issuance than the project is eligible to receive, the department will recapture the excess. Additional cost certification requirements and recapture provisions are created for projects which claim accrued developer fees as eligible costs for tax credits. The act creates a third party appeals process in which developers can challenge eligibility determinations made by the department.
BROWNFIELD REMEDIATION TAX CREDITS
The act prohibits the authorization of more than forty million dollars in Brownfield remediation tax credits in each fiscal year for FY 2012 - FY 2015. Beginning in FY 2016, no more than thirty-five million dollars in Brownfield remediation tax credits may be authorized in each fiscal year. The act prohibits the authorization of more than ten million dollars in Brownfield tax credits each fiscal year, for FY 2012 - FY 2015, for projects that receive benefits under the Distressed Areas Land Assemblage program. Beginning FY 2016, no more than five million dollars in Brownfield tax credits may be authorized each fiscal year for projects that receive benefits under the Distressed Areas Land Assemblage program.
SUNSET PROVISIONS FOR CERTAIN TAX CREDIT PROGRAMS
Due to the Tax Credit Review Commission's recommendation that reforms to programs be made on a prospective basis, rather than utilizing traditional sunset provisions, this act prohibits the authorization of tax credits under the following programs after the effective date of the act:
1) The Neighborhood Preservation Tax Credit;
2) The Development Tax Credit
3) The Brownfield Jobs and Investment Tax Credit;
4) The Small Business Incubator Tax Credit; and
5) The Rebuilding Communities Tax Credit.
The authorization of tax credits under the following programs will be prohibited after August 28, 2014:
1) The MDFB Bond Guarantee Tax Credit;
2) The MDFB Infrastructure Development Contribution Tax Credit;
3) The Family Farm Breeding Livestock Tax Credit;
4) The Agricultural Product Utilization Tax Credit;
5) The New Generation Cooperative Tax Credit;
6) The Qualified Beef Tax Credit; and
7) The Wine and Grape Producer Tax Credit.
The authorization of tax credits under the following programs will be prohibited after August 28, 2015:
1) The Domestic Violence Shelter Tax Credit;
2) The Maternity Home Tax Credit;
3) The Pregnancy Resource Center Tax Credit;
4) The Shared Care Tax Credit;
5) The Youth Opportunities Tax Credit;
6) The Disabled Access Tax Credit;
7) The Family Development Account Tax Credit;
8) The Residential Treatment Agency Tax Credit;
9) The Food Pantry Tax Credit;
10) The Neighborhood Assistance Program;
11) The Property Tax Credit (Circuit Breaker);
12) The Public Safety Officer Surviving Spouse Tax Credit;
13) The Affordable Housing Tax Credit;
14) The Special Needs Adoption Tax Credit;
15) The Children in Crisis Tax Credit; and
16) The Residential Dwelling Access Tax Credit.
The authorization of tax credits under the following programs will be prohibited after August 28, 2017:
1) The Quality Jobs Act;
2) The Enhanced Enterprise Zone Program;
3) The Business Facility Program; and
4) The Business Use Incentives for Large-Scale Development (BUILD) Program.
The authorization of tax credits under the following programs will be prohibited after August 28, 2018:
1) The Low-Income Housing Tax Credit;
2) The Historic Preservation Tax Credit; and
3) The Brownfield Remediation Tax Credit.
Where, under current law, a tax credit was subject to the sunset act, the sunset provision is modified to sunset such program on the date provided above.
The limitations on tax credit authorizations provided in the act will not impair an administering agencies ability to issue tax credits that were authorized prior to the date on which authorizations are prohibited, nor will they affect a taxpayer's ability to redeem such tax credits.
REPEAL OF CERTAIN TAX CREDIT PROGRAMS
This act repeals the following tax credit programs:
1) The Charcoal Producers Tax Credit;
2) The Self-Employed Health Insurance Tax Credit;
3) The Health Care Access Fund Tax Credit.
The act also repeals provisions of the Missouri property tax credit, commonly referred to as the circuit breaker tax credit, which allow renters to receive the property tax credit for rent constituting taxes paid.
Provisions contained in this act are similar to provisions contained in the SS/SCS/SB 280 (2011). This act contains an emergency clause.
JASON ZAMKUS