HCS HB 215 -- ECONOMIC DEVELOPMENT

SPONSOR:  Rizzo

COMMITTEE ACTION:  Voted "do pass" by the Committee on Commerce
and Economic Development by a vote of 18 to 0.

This substitute makes changes in laws relating to economic
development.  The substitute:

(1)  Allows Caldwell County to impose a sales tax on all retail
sales;

(2)  Allows the residents of Newton County to impose a
hotel/motel sales tax in addition to any transient guest tax
currently in effect;

(3)  Expands the definition of a "revenue-producing enterprise,"
as it relates to enterprise zones, to include hotel and motel
activities in the City of Salem;

(4)  Designates the following cities in St. Louis County to be
empowerment zones:  Berkeley, Cool Valley, Edmundson, Ferguson,
Jennings, Kinloch, Northwoods, and Pine Lawn;

(5)  Changes the definition of a community development
corporation to stress development of projects that benefit
low-income individuals and communities;

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

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

(8)  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;

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

(10)  Maintains the 5-year time period requirement for
investment in a small business 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;

(11)  Requires the Director of the Department of Economic
Development to reallocate very specific tax credits into other
related tax credit programs;

(12)  Expands the definition of a "distressed community" to
include specific areas of Kansas City;

(13)  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;

(14)  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 the equipment expense from
$75,000 to $150,000;

(15)  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;

(16)  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;

(17)  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;

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

(19)  Allows a demolition tax credit for up to 100% of the cost
if the demolition is part of a redevelopment plan approved by
the Director of the Department of Economic Development and by
the local government with jurisdiction in the area in which the
project is located and with the approval of the Department of
Natural Resources; and

(20)  Repeals the Missouri Individual Training Account Program
Act.

The substitute contains an emergency clause.

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that the bill is critical to
maintaining current investors while encouraging new investments
in Missouri businesses.  The bill will nurture smaller companies
as they establish themselves in Missouri and is critical to
their success.  The tax credits in the bill will help
entrepreneurs raise venture capital.  Missouri's shortage of
venture capital firms makes this program even more important.
The bill will work in urban and rural areas alike.

Testifying for the bill were Representative Bray; St. Louis
Regional Chamber and Growth Association; Metropolitan
Congregation of St. Louis; Blanc Plume; Missouri Innovation
Center; Center for Emerging Technologies; St. Louis Development
Corporation; and Espressa Foods, LLC.

OPPONENTS:  There was no opposition voiced to the committee.

Alice Hurley, Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:42 am