CCS/HCS/SS/SCS/SB 165 - This act provides a wide range of economic development incentive programs.

The linked deposit program is expanded to include eligible rural single-family housing developers and builders.

The act expands the membership of the Jackson County Sports Complex Authority from five to seven members, and removes the current restriction that no elective or appointive official of any political subdivision can be a member of the authority. New commissioners replaced after August 28, 1997, are required to be residents of Jackson County outside of Kansas City. Another provision of the act requires the two additional commissioners to be the mayor of Kansas City (or the mayor's designee) and the chairman of the Jackson County Legislature (or the chairman's designee). The act requires that the annual report of the Jackson County Sports Complex Authority be sent to the director of the department of economic development as well as to the governor.

The act changes the appointment procedures for the Bi-State Metropolitan Development District and specifies that corporations formed to contract for the planning and development of the Kansas and Missouri Metropolitan Culture District must meet certain open meeting and open records requirements.

This act makes the following changes in the Tax Increment Financing (TIF) law:

1. The act defines "redevelopment area," "special allocation fund," "gambling establishment", and "economic activity taxes". TIF plans and projects are prohibited from including the development or redevelopment of gambling establishments. In addition, personal property taxes and certain sales and use taxes are excluded from being included as economic activity taxes for TIF projects.

2. Municipalities must be established for one year or longer before TIF projects may be approved on or after August 28, 1997.

3. The act requires a cost-benefit analysis as part of the redevelopment plan which enumerates the economic impact on taxing jurisdictions if the project is not built and if it is built using TIF. The analysis must also include a fiscal impact study on every affected political subdivision and information indicating the financial history and status of the developer.

4. Municipalities or TIF commissions are required to establish procedures for obtaining competitive bids and proposals for implementation of the redevelopment projects. For minor changes to the redevelopment plan, project, or area, additional public hearings are not required.

5. The substitute allows, beginning January 1, 1998, certain blighted TIF areas to be eligible for a rebate of up to 50% of "new state revenues", defined as either 1) state sales taxes, except those which are constitutionally dedicated, School District Trust Fund taxes, and sales and use taxes on motor vehicles, trailers, boats and outboard motors, or 2) state income tax withholding. Before the rebate of new state revenues is made, municipalities must satisfy the following conditions: 1) apply to the Department of Economic Development for the rebate, making the election between sales tax or income tax withholding; 2) have an affidavit signed by the developers specifying that the project would not be developed "but for" the rebate; 3) complete a cost-benefit analysis; and 4) have the rebate authorized by concurrent resolution of the general assembly. A new fund, the Missouri Tax Increment Financing Fund, is created in the Department of Revenue, for the rebate of new state revenues to municipalities.

The act makes changes to the Missouri Development Finance Board Act. The definition of "development agency" is expanded to include any governmental, quasi-governmental or quasi-public corporation. The definition of "project" is expanded to include office buildings, nursing or retirement facilities, recreational facilities, cultural facilities, public facilities, and job training or other vocational training facilities. The act removes the current requirement that two commercial lenders must deny a loan or bond issue request that exceeds one million dollars for infrastructure facilities projects before such a request may be approved and the loan or bond issued from the infrastructure development fund. The tax credit allowed to owners of defaulted revenue bonds for infrastructure facilities is authorized for any financial institution or guarantor which executes any credit facility as security for such bonds. The act also increases the limit on the total amount of revenue bonds or notes for certain large-scale development projects from thirty- five million dollars to fifty million dollars.

The act revises certain tax credits available to taxpayers operating new business facilities located within enterprise zones. Existing law prohibits certain new business facilities from qualifying for tax credits after the initial ten-year period, even if the business is expanded. This act would allow taxpayers eligible for enterprise zone tax credits to qualify for new business facility tax credits if otherwise eligible. The act specifies a thirty-day time limit on filing any court challenge to the designation or expansion of an enterprise zone. The act authorizes the department of economic development to create enterprise zones in the cities of St. Louis and Clinton.

A tax credit is authorized for one-half of the purchase price of environmental control equipment used in the production of charcoal in Missouri.

The act removes the current percentage restriction on Missouri low-income housing tax credits and permits the Missouri housing commission to allow an amount necessary to ensure the feasibility of any project up to the amount of the federal credit.

The act changes the definition of "community development corporation" in the Missouri small business investment tax credit program and caps the total amount of tax credits available for qualified investments in Missouri small businesses at five million dollars.

The act also revises existing law concerning tax credits for contributions to school and youth programs under the Youth Opportunities and Violence Prevention Act. Current law permits only individuals and certain classes of corporations to take the tax credits. The act permits individual proprietorships, partnerships, and S Corporations to take the credits and expands the taxes against which the credits may be taken to include corporation franchise tax, financial institutions tax, and bridge, express, and public utility tax.

The Missouri certified capital company law is amended to cap at ten million dollars the maximum amount of certified capital in one or more certified capital companies in any year for one investor or its affiliate.

The act provides a method for determining qualifying sales, for purposes of state corporate income tax, of an investment funds service corporation. Another provision of the act allows such a corporation to make an annual election to compute the portion of income derived from sources within this state under either the single factor formula or the three-part formula of the Multistate Tax Compact.

Current law specifies the order in which various tax credits may be taken against state income tax. The act repeals that requirement.

The act extends the Community College Job Training tax credit program for ten years.

The act authorizes the creation of museum districts, which may fund, promote, plan, design, construct, improve, maintain and operate one or more museum projects. A museum district sales tax of up to one percent may be imposed, and revenue bonds may be issued for the purpose of paying for the costs of any project.

The act allows an income tax credit for costs incurred in the rehabilitation of a historic building in a historic district. The credit is allowed in an amount equal to twenty-five percent of total rehabilitation costs if those costs exceed fifty percent of the total basis in the property and the rehabilitation meets the standards of the state historic preservation officer. The tax credit provisions are effective January 1, 1998, and expire on December 31, 2002.

The position of chair of the Board for Architects, Professional Engineers and Land Surveyors is allowed to rotate among members of the three professions.

The act permits the formation of housing cooperatives for the purpose of producing or furnishing housing.

The act also excludes a joint municipal utility commission from being considered a water corporation and adds provisions expanding the contractual authority of sewer districts.

Moneys from the repayment of loans and loan guarantees are to be placed in the Property Reuse Revolving Fund.

The Department of Economic Development is authorized to contract with the Missouri technology corporation, innovation centers, small business development centers, centers for advanced technology, and other entities for the provision of technology application, technology commercialization, and technology development services.

The tax credit for qualified research expenses is expanded to be allowed against financial institutions tax.

Diligent efforts are required to assure that at least thirty percent of the moneys in the Microenterprise Revolving Loan Fund are available to, and reserved for, female-owned microenterprises. The microenterprise loan program is changed to authorize challenge loans to eligible lenders.

The act establishes the International Economic Development Exchange Program for college students and the Task Force on Trade and Investment. The Task Force provisions expire on December 31, 2001.

The act specifies that an S Corporation that is also a banking institution shall pay an annual modified franchise tax.

The act also creates both the Kansas City Regional Sports Complex Authority and the St. Louis Regional Sports Complex Authority, each one composed of seven commissioners.

A person who holds a foreign license to practice architecture from a jurisdiction which is a party to an international licensing agreement consistent with the provisions of the North American Free Trade Agreement shall be licensed in this state if the person meets the other qualifications for licensure.

The Department of Economic Development is authorized to assist community development corporations in forming a Missouri community development corporation association and is required to establish a public-private partnership to be known as the Missouri Community Development Corporation Initiative.

Nonprofit sewer companies are authorized for the purpose of supplying waste water disposal and treatment services within the state.

An income tax credit is authorized for contributions for infrastructure improvements. The total amount of tax credits is limited to two million dollars in any fiscal year.

The Missouri housing commission is authorized to establish a two-year pilot project in St. Louis and Kansas City for the purpose of renovating inner city property for subsequent purchase.
RUSS HEMBREE