SS SCS HCS HB 888 -- RURAL AGRICULTURAL DEVELOPMENT

This bill allows the Missouri Agricultural and Small Business
Development Authority to make grants, loans, or guarantee loans
for the creation, development, and operation of rural
agricultural businesses whose projects add value to agricultural
products and aid the economy of a rural community.

The authority may, upon receiving an appropriate fee and
reviewing the proposed agricultural business proposal, provide
for a feasibility study, market study, or legal assistance;
organize loans; provide for consulting services in the building
of the physical facilities of the business; and provide for
consulting services in the operation of the business.  Such
services are to be provided either by employees of the state or
by private contract.

The Department of Agriculture, the Department of Natural
Resources, the Department of Economic Development, and the
University of Missouri are to provide assistance, as necessary,
to aid the authority in carrying out the above listed duties.

The General Assembly may appropriate up to $3 million annually
to the Agricultural Product Utilization Grant Fund.  In any year
at least 10% of the grants are to be awarded to grant requests
of $25,000 or less and no agricultural business proposal is to
receive more than $200,000 in grants.

For the tax year 1999, a contributor who contributes funds to
the authority may receive a tax credit of up to 100% of such
contribution.  Tax credits issued are to be initially claimed
for the taxable year claimed.  Excess tax credits may be carried
forward 5 years.  Tax credits may be assigned, transferred, or
sold.

Funds derived from contributions are to be used to provide
financial or technical assistance to rural agricultural business
concepts.  The authority may provide or facilitate loans or
guaranteed loans for rural agricultural business concepts;
however, such financial aid may not exceed $2 million or the net
state economic impact, whichever is the greater.  At least 10%
of funds granted to rural agricultural business concepts are to
be awarded to grant requests of $25,000 or less and no single
business concept is to receive more than $200,000 in grant
awards.

Beginning in tax year 1999, the bill gives any member investing
in a new generation cooperative a tax credit equal to the lesser
of 50% of such person's investment or $15,000.  Such credit may
be carried back 3 years or forward 5 years.  It is refundable
and may be assigned, transferred, or sold.  The total of such
credits may not exceed $6 million.  At least 10% of such tax
credits are to be offered to members investing in projects with
a capital cost of less than $1 million.  Unused tax credits may
be offered to projects with a capital cost in excess of $1
million.

The aggregate of tax credits offered to contributors and members
may not exceed $6 million a year.  In fiscal year 1999, only
contributor tax credits are to be issued by the authority.  In
fiscal year 2000, up to $3 million in investor tax credits are
to be issued by the authority with the remaining tax credits to
be issued to contributors.  Beginning fiscal year 2001, the
authority is to determine the amount of tax credits issued to
contributors and investors.  Such tax credits are not to exceed
$6 million in the aggregate.  In no case is the balance of
authority funds to exceed $12 million.

The tax credit provisions of the bill are to expire December 31,
2010.

The Department of Agriculture, the Department of Economic
Development, and the Department of Natural Resources are to
provide eligible new generation cooperatives any technical
support necessary to assist in the operation of the facility or
marketing of its products.

The authority is to annually report to the Office of
Administration, the President Pro Tem of the Senate, the Speaker
of the House, and the Joint Committee on Economic Development
regarding the tax credits authorized by the bill.  The report is
to include the aggregate number and dollar amount of tax credits
issued by the authority, the number and dollar amount of tax
credits claimed by taxpayers, the number and dollar amount of
tax credits unclaimed by taxpayers, and the number of years for
claims to be made.  The report is to be delivered no later than
November of each year.

The bill has an emergency clause.

HCS HB 888 -- RURAL AGRICULTURAL BUSINESS (Leake)

This substitute allows the Missouri Agricultural and Small
Business Development Authority to make grants for the creation,
development, and operation of rural agricultural businesses
whose projects add value to agricultural products and aid the
economy of a rural community.

The authority may, upon receiving an appropriate fee and
reviewing the proposed agricultural business proposal, provide
for a feasibility study, market study and legal assistance,
organize loans, provide for consulting services in the building
of the physical facilities of the business, and provide for
consulting services in the operating of the business.  Such
services are to be provided either by employees of the state or
by contracting with private entities.

The Department of Agriculture, the Department of Natural
Resources, the Department of Economic Development, and the
University of Missouri are to provide assistance, as necessary,
to aid the authority in carrying out the above listed duties.

The General Assembly may appropriate up to $3 million annually
to the Agricultural Product Utilization Grant Fund.  In any year
at least 10% of the grants are to be awarded to grant requests
of $25,000 or less and no agricultural business proposal is to
receive more than $200,000 in grants.

Beginning January 1, 1999, the substitute gives any person
investing in a new generation cooperative a tax credit equal to
the lesser of 50% of such person's investment or $15,000.  Such
credit may be carried back 3 years or forward 5 years.  Tax
credits pursuant to this substitute are refundable and may be
assigned, transferred, or sold.  The total of such credits may
not exceed $6 million.

The Department of Agriculture is to use the AgriMissouri program
to promote products produced by development facilities and
renewable fuel production facilities.

The substitute has an emergency clause.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$6,421,745 to Unknown in FY 2000, $406,896 to Unknown in FY
2001, and $418,516 to Unknown in FY 2002.  Estimated Net
Increase to Agricultural Product Utilization Grant Fund of $0 to
$30,000 in FY 2000, FY 2001, and FY 2002.

HCS HB 888 -- RURAL AGRICULTURAL BUSINESSES

SPONSOR:  Leake

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Agriculture by a vote of 21 to 0.

This substitute allows the Missouri Agricultural and Small
Business Development Authority to make grants for the creation,
development, and operation of rural agricultural businesses
whose projects add value to agricultural products and aid the
economy of a rural community.

The authority may, upon receiving an appropriate fee and
reviewing the proposed agricultural business proposal, provide
for a feasibility study, market study and legal assistance,
organize loans, provide for consulting services in the building
of the physical facilities of the business, and provide for
consulting services in the operating of the business.  Such
services are to be provided either by employees of the state or
by contracting with private entities.

The Department of Agriculture, the Department of Natural
Resources, the Department of Economic Development, and the
University of Missouri are to provide assistance, as necessary,
to aid the authority in carrying out the above listed duties.

The General Assembly may appropriate up to $3 million annually
to the Agricultural Product Utilization Grant Fund.  In any year
at least 10% of the grants are to be awarded to grant requests
of $25,000 or less and no agricultural business proposal is to
receive more than $200,000 in grants.

Beginning January 1, 1999, the substitute gives any person
investing in a new generation cooperative a tax credit equal to
the lesser of 50% of such person's investment or $15,000.  Such
credit may be carried back 3 years or forward 5 years.  Tax
credits pursuant to this substitute are refundable and may be
assigned, transferred, or sold.  The total of such credits may
not exceed $6 million.

The Department of Agriculture is to use the AgriMissouri program
to promote products produced by development facilities and
renewable fuel production facilities.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$6,421,745 to Unknown in FY 2000, $406,896 to Unknown in FY
2001, and $418,516 to Unknown in FY 2002.  Estimated Net
Increase to Agricultural Product Utilization Grant Fund of $0 to
$30,000 in FY 2000, FY 2001, and FY 2002.

PROPONENTS:  Supporters say that Missouri producers, in order to
continue to exist, must band together and form value-added
cooperatives.  Due to the financial stress, state assistance is
necessary to make this possible.  This bill provides that
necessary assistance.

Testifying for the bill were Representative Leake; Missouri
Cattlemens Association; Missouri Farm Bureau; Missouri Corn
Growers Association; and Brian Munslinger.

OPPONENTS:  There was no opposition voiced to the committee.

Roland Tackett, Legislative Analyst

HB 888 -- Rural Agricultural Businesses

Co-Sponsors:  Leake, Gaw, Wiggins, Crump, Kreider, Backer,
Williams (159), Hampton, Kelly (27), Selby, Merideth

This bill allows the Missouri Agricultural and Small Business
Development Authority to make grants for the creation,
development, and operation of rural agricultural businesses
whose projects add value to agricultural products and aid the
economy of a rural community.

The authority may, upon receiving an appropriate fee and
reviewing the proposed agricultural business proposal, provide
for a feasibility study, market study and legal assistance,
organize loans, provide for consulting services in the building
of the physical facilities of the business, and provide for
consulting services in the operating of the business.  Such
services are to be provided either by employees of the state or
by contracting with private entities.

The Department of Agriculture, the Department of Natural
Resources, the Department of Economic Development, and the
University of Missouri are to provide assistance, as necessary,
to aid the authority in carrying out the above listed duties.

The General Assembly may appropriate up to $3,000,000 annually
to the Agricultural Product Utilization Grant Fund.  In any year
at least 10% of the grants are to be awarded to grant requests
of $25,000 or less and no grant is to exceed $300,000.

Beginning January 1, 1999, the bill gives any person purchasing
a share in a new generation cooperative a tax credit equal to
the lesser of 50% of such person's investment or $30,000.  Such
credit may be carried back 3 years or forward 5 years.  Tax
credits pursuant to this bill are refundable and may be
assigned, transferred, or sold.  The total of such credits may
not exceed $6,000,000.

The Department of Economic Development in consultation with the
Department of Agriculture is to establish a "Missouri First"
marketing program to market products produced by value-added
agricultural business.